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Wal-Mart says U.S. shoppers resilient, small businesses strapped
June 6, 2013 / 11:46 PM / 4 years ago

Wal-Mart says U.S. shoppers resilient, small businesses strapped

ROGERS, Ark., June 6 (Reuters) - Wal-Mart Stores Inc is optimistic that sales at its U.S. stores will recover from a recent slow patch and grow in the second half of the year, in part because shoppers are getting more confident, company executives said on Thursday.

Walmart U.S., the biggest unit of the world’s largest retailer, last month posted an unexpected dip in sales at stores open at least a year. It expects an improvement in these same-store sales as the year continues and says shoppers are figuring out how to budget and also to splurge.

“The U.S. consumer, I think, is becoming resilient,” Walmart U.S. CEO Bill Simon told reporters on Thursday afternoon, a day before the company’s annual shareholder meeting.

“The paycheck cycle has changed a little bit. Some of the money that comes from state and local governments has been paced throughout the month,” he said, adding that that evened out what three or four years ago would have been a sales burst around the first of the month.

RESILIENCE AT WALMART

Walmart’s shoppers are spending on special events, such as Mother’s Day, but in the interim “they hunker down a little bit,” and make choices such as buying lower-priced chicken or pork when beef prices go up, Simon said.

First-quarter same-store sales at Walmart U.S., which accounted for 59 percent of total sales last year, fell 1.4 percent. They were expected to be about flat from the previous year. For the second quarter, Walmart expects such sales to be flat to up 2 percent.

Simon’s optimism about the full fiscal year, which ends on Jan. 31, arises from comparisons from the prior year, when same-store sales at Walmart U.S. were stronger in the first half of the fiscal than the second half.

LUNCH MONEY

Wal-Mart’s Sam’s Club warehouse chain said restaurant owners that buy their supplies at Sam’s Club are tapped out.

At a small barbecue restaurant in Texas cash was so tight, the staff would bring the money earned from sales at lunch to Sam’s Club in the afternoon and restock for the dinner, recounted to Todd Harbaugh, executive vice president of operations at Sam’s Club.

“Our business members are under so much pressure that in some cases they are actually living meal to meal,” Harbaugh said.

Convenience stores, which often buy their tobacco products from warehouse chains such as Sam’s Club, have taken a hit as shoppers go to dollar stores instead.

Also, some independent convenience store operators have joined groups that have direct sales, which cuts into Sam’s Clubs sales, said Rosalind Brewer, the CEO of Sam’s Club,.

For the current second quarter, Wal-Mart expects Sam’s Club’s same-store sales to increase by 1 percent to 3 percent.

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