Wal-Mart sees share gain, not end of recession
February 25, 2002,
Bentonville, AR — While economic forecasters are beginning to call the recession a done deal, the economy still looks slack from Wal-Mart's perspective.
In remarks to investors last week following the release of fourth quarter and fiscal earnings results, executive vp and cfo Tom Schoewe noted that, although fiscal 2003 "began a lot better than last year" and consumer spending is not declining, the economy is still status quo.
The average transaction rate has not yet indicated acceleration, he added. "The evidence is not strong for us to believe the economy has turned a corner."
Though the company experienced record earnings and sales for the fourth quarter [see story page 16], the decline in gross margin by 24 basis points resulted in part from a shift in consumer spending toward opening-price-point merchandise and basic items, Schoewe said. And though sales have recently improved, he added, there is "no clear evidence that the opening-price-point phenomenon has abated."
Wal-Mart rolled back prices on approximately $9.3 billion in sales during the year, he said, slightly lower than the previous year. And in the last half of the year the retailer shifted more dollars toward competitive markdowns to adjust for the aggressive promotional environment. "We anticipate returning to more normal levels of rollbacks in the current fiscal year," he said.
Related Content By Author
Live From New York: Fashion Comes Across the Pond
Home & Textiles Today eDaily
Most Viewed Articles
See the September 2017 issue of Home & Textiles Today. In this issue, we look at the Attack of the Killer Third Tier: Monster off-pricers are climbing to the top of the food chain, plus New Products: 40 pages of new products debuting at the New York Home Fashions Market; Home Stores: TJX unveils first U.S. HomeSense store; Clicks to Bricks: Boll & Branch moves from digital to physical retailing; and much more...