NEW YORK (AP) — Wal-Mart’s effort to reverse a two-year sales slump at its U.S. namesake business is beginning to work.Company officials told analysts gathered a few miles away from its headquarters in Bentonville, Ark., on Wednesday that it has had three consecutive months of gains in revenue at stores opened at least a year, a critical yardstick in measuring a retailer’s health. Wal-Mart had been aiming to reverse nine straight quarters of declines in revenue at stores opened at least a year by the end of this year, but it’s too early to tell if it will report a sales gain in the current quarter.
The weak U.S. job market and other economic woes have hurt Wal-Mart’s business, straining its core low-income shoppers. But the world’s largest retailer has also stumbled because of mistakes it made in merchandising and pricing.
Wal-Mart since has restocked thousands of products it scrapped in an overzealous bid to clean up its stores. It also stopped using gimmicks like slashing prices temporarily on select item and instead returned to its “everyday low price” strategy, the bedrock philosophy of founder Sam Walton.
Analysts have been closely watching when the company will be able to stop the sales declines at its Wal-Mart’s U.S. namesake stores, which account for 62 per cent of its total revenue. On Nov. 15, Wal-Mart will report its results for the third quarter, a three-month period that ends on Oct. 28.
“The progress is now visible in our business,” said Bill Simon, president of Wal-Mart’s U.S. business. “We have confidence in our plan.”
Wal-Mart still has a critical benchmark coming up: the holiday shopping season, which is typically the biggest shopping period of the year.
Company officials told analysts that it has doubled its spending on TV advertising for the holiday season from last year and has dedicated a committee to monitor the holiday business on a daily basis on such areas as sales and customer satisfaction. The company, which ditched layaway in 2006, is rolling out a holiday layaway plan. It also is offering more toys for $5 to $10.
Shares rose more than 2 per cent, or $1.32 per share , or $56.04 per share.