Wal-Mart touts its U.S. growth potential
24 October 2007
(c) 2007 Reuters Limited
NEW YORK, Oct 23 (Reuters) - Wal-Mart Stores Inc should be seen as a "growth" business that still has numerous opportunities to boost sales results at existing U.S. stores, the head of the retailer's U.S. operations said on Tuesday.
"You will hopefully conclude that we are a growth business," Eduardo Castro-Wright said at the retailer's analyst meeting, which was broadcast over the Web.
The world's largest retailer is facing questions from investors about how much more it can grow in its home country. It has saturated many markets with more than 4,000 U.S. stores, and its sales at existing U.S. stores, or comparable stores sales, rose at their lowest pace on record last fiscal year.
The meeting also comes as Wal-Mart's core lower-income customers are being squeezed by higher fuel and food costs, and Castro-Wright said the "mortgage crisis" and credit crunch were affecting consumer's shopping behavior.
"We have a challenging economic environment out there," he said, adding that the retailer's comparable store performance "is not what we would like it to be."
But he touted the momentum the retailer has in its "health and wellness" business, which includes its pharmacies; its grocery business; and its electronics businesses. He said the three areas account for two-thirds of its business.
Wal-Mart plans to add more drugs to its $4 generic prescription drug program, he said, and would continue to emphasize the name brands it sells in its electronics area.
But it is still struggling in its home and apparel areas, which make up almost the remaining one-third of its business.
"In the case of apparel, we are not pleased with the performance of the business," he said. "It's only marginally better this year than it was last year."
To boost sales in its home area, which includes merchandise like bedding and bath accessories, it will introduce more brands.
Wal-Mart will launch the new Canopy line of home decor goods in stores nationwide in February. It also said it has a deal with Meredith Corp to launch a line of Better Homes and Gardens home products, such as bedding and decorative pillows, in its stores this fall.
"Home is improving," he said.
But investors did not seem satisfied by the plans. Wal-Mart shares fell 3 percent to $43.93 on the New York Stock Exchange despite its announcing plans at the meeting to trim capital spending and the number of new supercenters it will open.
On Wednesday, Wal-Mart will discuss its Sam's Club warehouse division and its international business, and Chief Executive Lee Scott will address the meeting.
(Reporting by Nicole Maestri)
Developments To Watch: -Will Companies Force The Pace On Plastic Bags?
29 October 2007
Main Report - Business Letter
(c) 2007 The Main Report Publications Ltd
Around the world plastic-bag bans are gaining momentum, but will companies be the ones to force the issue? In the US 380bn plastic shopping bags are used every year. Just 5.2% of them are recycled. The US plastic bag habit alone absorbs 4bn litres of oil a year. So far it's been city Govts which have fought the battle against the bag, but now companies are starting to join in to improve their own green credentials.
Downcycling. WalMart is collecting old bags for recycling. Last year it recycled about 20m kgs of plastic bags which are being recycled into useful products. But there's a downside. The recycled product can't then be recycled itself. It will eventually be sent to a landfill. It is known rather than recycling as "downcycling."
Incentives Or Disincentives. Target, another giant retail chain is asking customers to re-use the bags it gives them, but there's no customer incentive. The Wholefoods chain, which is the largest natural foods retailer in the US gives customers a small discount when they bring in a bag to reuse. Ikea, the Scandinavian furniture giant, encourages customers to use fewer bags by charging 5c for each one they do use. This has cut US bag consumption at its shops by 50%. In the UK the same policy cut bag use by 95%.
ALso Wal-Mart Increases Support to $1 Million to Assist With Wildfire Relief Efforts; Retailer contributes an additional $750,000 to the American Red Cross, continues to donate merchandise and collect customer contributions
UPDATE 3- Wal-Mart to acquire rest of Japan retailer Seiyu
By David Dolan and Nathan Layne
22 October 2007
(c) 2007 Reuters Limited
(Adds comments from industry analyst, company)
TOKYO, Oct 22 (Reuters) - Wal-Mart Stores Inc will spend up to 100 billion yen ($878 million) to buy out minority shareholders in Japanese supermarket unit Seiyu Ltd in an effort to turn around the money-losing chain.
The world's largest retailer has invested more than $1 billion in Seiyu since 2002, but has yet to see anything more than temporary upswings in sales amid tough competition with rivals such as Aeon Co.
Seiyu is headed for its sixth straight annual loss in 2007, which had led to speculation that Wal-Mart would either need to invest more in the unit or that it would pull out of Japan, as it did from South Korea and Germany last year.
"We have not necessarily provided as strong a value as our customers would like," Ed Kolodzieski, Seiyu's chief executive, told a news conference.
The buyout will put an end to rumours Wal-Mart may abandon Japan, making it easier to do business with local suppliers and lenders, Kolodzieski said.
"From a business partner and supplier standpoint, they too should also see this as very positive news, for Seiyu now has the full-backing of Wal-Mart," he said.
Wal-Mart, which currently owns 50.9 percent of Seiyu, said it would offer 140 yen per Seiyu common share in a tender offer from Tuesday through Dec. 4. The offer price marks a 61 percent premium to Friday's closing share price of 87 yen.
Trade of Seiyu's shares was suspended by the Tokyo Stock Exchange on Monday, following reports of the buyout.
"It really does give ( Wal-Mart) the opportunity to do whatever they want to do with Seiyu," said Roy Larke, editor of Japan Consuming, an industry newsletter.
"They still don't have a major share of the market but they do own the number three retailer in the country. They have a much solider base than they ever had in Korea and therefore something to build on," Larke said.
SIGNS OF PROGRESS
For the year to Dec. 31 2007, the company has forecast a net loss of 10.4 billion yen.
However, there may be signs of progress: same-store sales showed their first annual rise in 15 years in 2006, although they still fell short of the company's target.
Seiyu's Kolodzieski said there were no plans to shut down any of the supermarket's nearly 400 outlets in Japan and that it was looking to accelerate its renovation of existing stores.
Last month, Seiyu said it would offer early retirement to 450 of its employees, or about 7 percent of its work force. In 2004 the company eliminated about 1,600 jobs.
Cracking Japan's retail market, the world's second-largest, has proved a challenge for foreign companies, due to fickle shoppers and tough competition.
In recent years France's Carrefour and Britain's Alliance Boots have both pulled out of the market.
Shares of Seiyu have lost three-quarters of their value since the end of 2002, the year when Wal-Mart first bought into the supermarket.
During the same period, the Tokyo stock exchange index of retail stocks has gained about 25 percent.
All sourced from www.factiva.com
- but unless your college has access to that website you won't be able to log in.
I'm not really sure what your essay is on - i'm assuming its either enviromental issues, or walmart dominating the US retail industry, the argument being that its acting as a monopoly and impeding competition and trade..retailers can't compete with their prices due to the mass volume purchased by them, therefore being able to offer lower margins. Retailers also can't BUY the product from suppliers at the prices Walmart can.
Anyway hope those helped