UPDATE 1-Wal-Mart CEO says US business gaining momentum

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GOLETA, Calif., March 13 (Reuters) - Wal-Mart Stores Inc's (WMT.N) U.S. business is gaining momentum because consumers faced with rising gasoline and food costs are taking advantage of the discounter's low prices, Chief Executive Lee Scott said on Thursday.

"The discretionary dollars that (consumers) have are just simply less," Scott told reporters at the Wall Street Journal ECO:nomics conference in Goleta, California. "We are gaining momentum because people need us more than ever."

The slowing U.S. economy has made consumers more conscious of their spending as they grapple with declining home values, resetting mortgage payments and higher food and fuel costs.

Scott said Wal-Mart's U.S. business was also getting a boost from better products in certain areas, such as apparel.

Specifically, Scott said Wal-Mart was seeing growth in its store-brand food items and said customers were trading down to smaller package sizes.

"The customer is buying right at the point of need," Scott said. (Reporting by Nichola Groom; Editing by Tim Dobbyn)