Well, Wal-Mart (WMT) missed its own ultra-low projection for February same-store sales. The figure rose .9% compared to a projected 1% to 2%. While the company’s Sam’s Club did fine, sales at the flagship Wal-Mart branded stores were up only .4%.
Wal-Mart has now tried everything to fix its US growth problem, but the company is now getting it real move up in revenue from markets like Mexico and China. The huge retailer has changed the look of its stores. It has put in more up-scale merchandise. It has moved around management in its retail and marketing operations.
Wal-Mart has even begun a program to offer free shipping to Wal-Mart stores for customers who buy products online. Perhaps those customers will buy something else when the hit the store for their delivery.
The bottom line is this. Wal-Mart has too many stores in the US market. Target (TGT) is still projecting sales of 4% to 6% per month, and more niche operations like CostCo (COST) are also seeing same store figures increase 3% to 6% most months.
Wal-Mart is now large enough so that it competes with itself. With 1,100 discount stores and 1,900 supercenters across the US the opportunity for grow at the store unit level is gone.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities at companies that he writes about.
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