Wal-Mart whittles merchandise to boost sales

By Nicole Maestri and Alexandria Sage

ROGERS, Ark (Reuters) - Wal-Mart Stores Inc is scaling back its assortment of products to ensure its customers can more easily navigate its aisles -- and make it to the cash register with a full shopping cart.

On a tour of a Wal-Mart supercenter in Rogers, Arkansas on Thursday, Wal-Mart executives talked about paring down its cluttered clothing department, getting rid of poorly selling home items and clearing out its hardlines department, which includes automotive merchandise and sporting goods, to get shoppers to spend more during their visits to the stores.

"We've made incredible progress" in improving our store experience, said Eduardo Castro-Wright, head of its U.S division.

Wal-Mart built itself into the world's largest retailer by following a strategy of "stack it high and sell it cheap."

But in recent years, its U.S. sales growth slowed, and it faced complaints that its more than 4,100 U.S. stores had become dingy and overcrowded, while other rivals, like Target Corp, lured shoppers with bright, open stores.

LOWER FIXTURES, FEWER ITEMS

To boost sales, it has cut its plans for adding U.S. stores and has been remodeling its aging store base.

At a store tour for the media on Thursday, a day ahead of its annual shareholders meeting, Wal-Mart executives made an effort to point out the open, wider aisles in the stores.

Executives also talked about using lower display fixtures in its stores so customers' vision is not blocked by walls of racks towering over their heads.

For its home department, Wal-Mart has developed a new design that features these lower fixtures, so a customer can survey the entire department while standing in the aisle.

"She buys more when it's easier to shop," said Linda Hefner, general manager of its home department.

In its apparel department, the retailer is reducing the number of styles it offers, part of a wider plan to clean up the look of its stores and make shopping easier, while expanding key growing programs.

Besides its focus on what Dottie Mattison, general manager of apparel, called "win" category basics like socks and underwear, the company is investing in key items for less than $10 -- "Express for Less" clothing like T-shirts that feature popular images like Hannah Montana or team sports, and activewear.

'SECRET SAUCE'

One department where Wal-Mart has found success is in its electronics department. It has been adding brand names to its lineup, like Samsung TVs and Nintendo video game consoles.

This week, Wal-Mart said it had completed the nationwide redesign of its consumer electronics departments.

The redesigned departments include more space for consumers to test video games, an expanded selection of GPS navigation products, a new display center for computers and a bigger selection of high-definition TVs.

During the store tour, Stephen Quinn, chief marketing officer, said that in the electronics department, the retailer has found the "secret sauce" for success that it would like to replicate throughout its stores.

"I think you're going to see more of what's going on in electronics -- because we're further ahead here -- happen in other parts of the store where we haven't done as well," he said.

He said the retailer is working on improving signs in its stores to help customers find what they are looking for, and it is also trying to better integrate its marketing with its merchandise.

(Editing by Gary Hill)