Less could prove to be more for Wal-Mart, which broke an 18-month streak of flat and decreasing same-store sales in the U.S. in the third quarter with the help of strong performance from its smaller format stores.
Seeking to boost sales further, Wal-Mart is now allowing store managers to match the prices of online retailers, Greg Foran, president and CEO of U.S. operations, said during a Nov. 13 pre-recorded call on the third-quarter results.
Comparable sales for U.S. stores increased half a percent for the quarter ending Oct. 31, according to the quarterly report. Sales at small format Neighborhood Market stores jumped 5.5%, though, contributing to a 3.4% growth in net sales for the quarter. That translates to about $70 billion in net sales in U.S. stores for the quarter.
Corporate officials did not discuss a memo recently leaked by a U.S. store manager regarding corporate mandates to do a better job rotating and culling fresh produce and other fresh food products.
Foran, who has been leading the U.S. operations since July, said online sales are an increasingly important piece of the revenue pie.
“In our e-commerce business, we’re being thoughtful about sustainable growth. E-commerce, including store-fulfilled sales, contributed approximately 20 basis points to our overall comp,” Foran said in the recorded call.
But the smaller format stores are the stars in the U.S. right now and expected to be in the near future.
To start the fourth quarter, Wal-Mart marked the opening of its 5,000th store in the U.S. with a Neighborhood Market in Greenbriar, Ark., the first week of November, said Carol Schumacher, investor relations director.
The corporation is rebranding its smallest formats — Wal-Mart Express stores — to the Neighborhood Market banner, Schumacher said during the pre-recorded call.
Previously the Neighborhood Market locations averaged 43,000 square feet and included a pharmacy. The Express locations were 12,000 to 15,000 square feet, Schumacher said.
Foran said the chain opened 28 of the larger Neighborhood Market locations in the third quarter and 33 new supercenters in the U.S.
“In Q4, we’ll shift to a heavier mix of small formats, opening over 100 traditional Neighborhood Markets and 70 smaller ones,” Foran said in the pre-recorded call.