CHICAGO (Reuters) - Wal-Mart Stores Inc is awarding approximately $2 billion to its U.S. hourly employees through financial incentives, including handing out $933.6 million in bonuses on Thursday, after the world’s largest retailer gained market share amid a recession.
In a memo to Wal-Mart employees obtained by Reuters, Wal-Mart CEO Mike Duke said the retailer is awarding roughly $2 billion to U.S. hourly employees, which includes $933.6 million in bonuses, $788.8 million in profit sharing and 401(k) contributions, millions of dollars in merchandise discounts, and contributions to its employee stock purchase plan.
“While economic challenges forced others to step back, we moved forward,” Duke stated in the memo.
Duke said Wal-Mart now needs to “accelerate and broaden all of our efforts.”
As consumers seek to stretch limited budgets, they are increasingly heading to Wal-Mart’s U.S. stores for discounts on everything from food to televisions. Wal-Mart is also aggressively touting its low prices to attract shoppers, and the retailer said on Thursday that it is cutting prices on contact lenses and children’s glasses.
The efforts are helping Wal-Mart gain market share while other U.S. retailers see sales fall as shoppers avoid splurging on nice-to-have items, like sweaters or jewelry.
For its fiscal year ending January 31, 2009, Wal-Mart’s total sales rose 7.2 percent to $401.24 billion. Sales at its U.S. stores open at least a year, or same-store sales, rose 3.3 percent, excluding fuel, in its recently completed fiscal year, up from a 1.4 percent gain in the previous fiscal year.
A year ago, Wal-Mart said it awarded almost $1.2 billion in financial incentives to its U.S. hourly employees, including more than $636.4 million in bonuses, which are based on store performance.
Wal-Mart shares declined 0.7 percent to $50.07 around midday on the New York Stock Exchange.
Reporting by Nicole Maestri, editing by Matthew Lewis.