Wal-Mart, the world’s largest retailer, said it will cut capital spending on its US stores by a third this year as it slows the pace of store openings.
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During an analyst presentation yesterday (27 October), the retailer said spending will drop to a range of US$5.8bn to $6.4bn for the year ending 31 January, from $9.1bn a year earlier.
In fiscal 2010, it plans to spend $6.3bn to $6.8bn, CEO Eduardo Castro-Wright said.
The retailer said the cuts are being made in a bid to boost sales by remodelling existing stores and improving its merchandise selection.
Wal-Mart said it plans to open 191 stores in the current fiscal year, which ends in early 2009, and 142 to 157 stores in the next fiscal year.
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By GlobalDataSpeaking at the company’s annual two-day analyst meeting in Bentonville, Arkansas, Castro-Wright said that the company is attracting a larger number of higher-income shoppers with discounts.
“We are capturing new customers,” said Castro-Wright. “Traffic at stores that serve households with incomes above $65,000 is growing much faster than the chain.
“We are seeing a lot of new customers that did not consider Wal Mart before but are considering it now. And hopefully when you see what we are doing with all our work, you will agree with us that those customers will stay with Wal-Mart because they will get the value and quality of product they demand. With that, I think we will win customers from the rest of the market.”
