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BENTONVILLE, Ark. -- Grocery continues to play a leading growth role at Wal-Mart Stores, Inc., as U.S. Supercenter food sales grew by more than 13 percent in the quarter ended Oct. 31. Supercenter food comps were up 5.3 percent, helping to drive total U.S. comps up 1.5 percent compared to the same period last year, said U.S. chief Eduardo Castro-Wright during a pre-recorded call yesterday.
Castro-Wright said grocery, health and wellness, and entertainment are currently the three key drivers of the Wal-Mart's U.S. business, accounting for two-thirds of total sales. Grocery makes up more than 40 percent of that two thirds, he added.
He also noted the larger role fresh food is playing at the company's newest Supercenter, which opened last week in Highland Village, Texas. The 203,000-square-foot store demonstrates a "major commitment to fresh," featuring a pastry shop, open-hearth bakery, and circular deli department with "many meal solutions," said Castro-Wright.
At the same time, low prices continue to be a major appeal of Supercenters, he said. "During the third quarter, we further increased price spreads between us and three of the top grocery competitors with a spread ranging from 14 percent to 28 percent."
For the third quarter, net sales at the Wal-Mart Stores division were $57.65 billion -- a 6.2 percent jump from last year. Sam's Club rung up $10.826 billion in sales -- a 6.1 percent increase. Comps at Wal-Mart Stores increased 1 percent, while Sam's Club's comps were up 3.9 percent, excluding fuel.
An increase in average ticket drove U.S. comps, although customer traffic declined, said Castro-Wright.
Total net sales for Wal-Mart Stores, Sam's Club, and the International division were approximately $90.9 billion, an increase of 8.8 percent over the third quarter of fiscal year 2007. Income from continuing operations for the quarter was $2.86 billion, an 8 percent rise that beat Wall Street expectations.
"We expect to report at least $100 billion in sales in the fourth quarter, which would be our first $100 billion quarter," noted Wal-Mart Inc. president and c.e.o. H. Lee Scott, Jr. during the call.
"Our results for the third quarter reflect the improved performance of our U.S. operations," said Scott in a statement. "Both Wal-Mart Stores U.S. and Sam's Club increased profits faster than sales."
Scott also noted that the company's focus on managing inventory during the quarter was very positive.
For the fourth quarter, the company estimates the comparable store sales increase in the U.S. to be between flat and 2 percent, according to Tom Schoewe, Wal-Mart Stores, Inc. e.v.p. and c.f.o.
Still, holiday promotions should help boost business, he noted. The retailer will also be rolling out its $4 generic prescription plan nationwide.
-- Jenny McTaggart