Wal-Mart scales back new stores
Wal-Mart Stores Inc. said Tuesday the global economic meltdown and predictions of reduced consumer spending will require the retail giant to scale back store growth and capital expenditures next year.
The Bentonville, Ark.-based firm said in addition to opening 212 stores next year, down from 243 new stores last year, current plans for 2009 call for focusing on remodeling existing locations and the creation of smaller stores. Wal-Mart also plans to open 157 to 177 stores in 2010.
Wal-Mart officials said the plan would allow the firm to maintain its cash flow for reinvestment in the business while still being able to deliver returns to shareholder through dividends and share buybacks.
Wal-Mart officials said it believes total sales growth will drop to 8 percent in fiscal 2009, down 8.6 percent from this year. Wal-Mart predicts that total sales growth for fiscal 2010 will fall between 5 percent and 7 percent.
Additional plans for 2009 call for the firm to scale back building of new supercenters from 191 to 166. The firm is also cutting back 2010 store openings to 125 to 150 stores.
The cuts also will see new supercenters, the name for Wal-Mart stores that carry groceries as well as other retail goods, shrink in size.
'At a time of great economic uncertainty, this company is well positioned to succeed in the future and in the short term, and we believe that we, as a company, will emerge as a tougher competitor,' said Lee Scott, Wal-Mart’s president and chief executive officer. However, the firm would not be 'defensive' or 'passive,' he added.