Private Label Buyer

Walmart Sales Up, Grocery Driving U.S. Traffic

February 26, 2013

Walmart reported sales gains of 5 percent in fiscal 2013 from a year earlier, with U.S. President Bill Simon saying the company was seeing more traffic from customers visiting the grocery aisles.

“Our grocery business continues to be a key traffic driver,” Simon said on a prepared call to announce earnings, according to transcripts from Seeking Alpha. “Customers have responded to the increased quality of our assortment, including various launches of innovative products.

“In addition, the investments we’ve made over the past two years to improve the quality and assortment in our fresh meat department resulted in mid single-digit positive comps for the year. We also saw a strong comp improvement in our produce area. We believe we’ve converted many customers to these areas of the store and will continue to generate loyalty in the important traffic-driving areas.”

Sales companywide rose to$466 billion in fiscal 2013, with earnings up 10.6 percent. The U.S. division saw same-store sales climb 1.2 percent in the fourth quarter from a year earlier and 1.8 percent for the year. Walmart International posted sales increases of 6.9 percent in the fourth quarter from a year ago and 7.4 percent for the year. International business now accounts for 30 percent of all Walmart’s sales.

Sam’s Club showed same-store sales growth of 2.3 percent for the quarter, excluding fuel, and 5.4 percent for the year.

The company mentioned little specifically about its private label programs. Walmart International President Doug McMillon said the company’s Asda unit in the U.K. was using a combination of strong private brands and everyday low pricing to help meet the needs of budget-conscious consumers.

“(It) gives us a point of differentiation in the marketplace and will help us grow share,” he said, according to the Seeking Alpha transcripts.

In addition, McMillon said Asda would expand its private label website in Europe this year, going fully operational to 24 countries by the end of the third quarter.

Back home, Simon talked about the continued rollout of small format stores, Neighborhood Markets and Walmart Express.

“ In fiscal 2014, we plan to add approximately 100 small stores,” Simon said. “We remain encouraged about the performance of our Neighborhood Markets, opening an additional 17 units across the country in the fourth quarter alone. The format maintained its consistent performance driving mid single-digit comps and positive traffic for the year.”