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Challenging economic times in the U.S. are driving more customers to Wal-Mart’s namesake stores, Eduardo Castro-Wright, president and c.e.o. of Wal-Mart U.S., said during an analyst and investor presentation that was part of the company’s annual shareholders meeting on Friday.
“Looking at our store clusters, we’ve seen that traffic has grown in the past six months in the cluster of stores with the highest-income shoppers (earning $65,000 or higher annually),” Castro-Wright said. “This is a much faster growth rate than the rest of the chain. The only reasonable assessment we can make is that these consumers used to shop somewhere different, but they are trying us out and finding that it’s a rewarding experience -- not only rewarding for their pocket, but a rewarding experience overall.”
Castro-Wright also noted that by offering free check cashing for economic stimulus checks, the retailer saw a boost in its May comps. “Our customers cashed $350 million in economic stimulus checks during May,” he said.
The Bentonville, Ark.-based retailer has steadily made improvements in its people and structure and merchandising initiatives, Castro-Wright said. “Today we have a solid, best-in-class team … [and] chief merchandising officer John Fleming has helped lead a transformation in merchandising. Our stores look better, cleaner, and friendlier. Our customers are telling us they’re enjoying the shopping experience much more than they did before.”
While the retailer will continue to emphasize its tag line, “Save Money. Liver Better,” its focus on low prices will be supplemented by messages about specific products to create more demand, executives noted during the presentation.
Castro-Wright acknowledged that price inflation has been an issue, particularly in food, where the retailer has seen mid-single-digit increases in various categories.
Yet Wal-Mart is closely studying the issue of inflation and has a process in place to make sure it’s passing along costs or keeping costs down in specific categories, according to John T. Westling, e.v.p., replenishment, pricing and planning, Wal-Mart Stores division. “It’s a pretty complex process,” he said.
Lee Scott, president and c.e.o. of Wal-Mart Stores, Inc. told the audience of investors and analysts that the changes made by management during the transformation of the past three years, as well as a deeper understanding of the company's mission of saving people money so they can live better, are driving results for the business and helping Wal-Mart take on the toughest issues facing customers around the world.
"'Saving Money' has always been a part of who we are," said Scott. “'Living Better' is now a real part of our company too. That connection, and our understanding of its potential, is making the difference between the great company we have always been and the even better Wal-Mart we are today."
Scott also talked about Wal-Mart being better positioned than any other retailer to succeed both in today's current economic climate, and the retail environment taking shape for the future. He cited strengths such as the company's global footprint, its leadership in sustainability, and the appeal of its price leadership strategy among aging populations.
Scott also talked about the company's efforts to help solve some of the toughest challenges facing its customers, such as rising energy prices and high out-of-pocket health care costs. He said that American voters who will be the focus of the upcoming elections are Wal-Mart shoppers who are concerned about these very issues.
"We see it in our stores every day -- working men and women living paycheck to paycheck and making more and more difficult decisions," Scott said. "We serve millions of customers like this every week in the U.S. We understand them."
The company's chief executive added: "Regardless of who wins the election in November -- and what party they are from -- we stand ready to work with the new President and the next Congress. We believe we can be an effective partner, and leaders who want to get things done will seek Wal-Mart as a partner."