'Everyday growth' for Wal-Mart
David Perry -- Furniture Today, June 11, 2001
While the economy is slowing, Wal-Mart keeps growing, both here and abroad. As the total company sales reached over $191 billion, a 16 percent increase from fiscal 2000, the number of stores across all divisions increased almost 5 percent to 4,189 locations.
Net income hit $2 billion for the fourth quarter and almost $6.3 billion for the year, making this the discounter's first $2 billion-income quarter and its first $6 billion-income year, commented Lee Scott, president and ceo, in Wal-Mart's annual report.
The company has increased its commitment to home textiles with its exclusive Springmaid towel and sheet program from Springs Industries to complement its private-label Jubilee collection. The company is also preparing the rollout of its Mary-Kate and Ashley Olson licensed brand of juvenile bedding and bath to be produced by WestPoint Stevens.
Wal-Mart Stores had $121.9 million in sales, almost 64 percent of the retailer's total. Sam's Club grew to $26.8 million in sales, about 14 percent of total sales, and the division's earnings growth outpaced sales growth for the year and membership renewals reached record levels.
In the United States, the company expanded its store base with 167 additional Supercenters (104 of which were converted from existing Wal-Mart stores), 12 more Sam's Club stores, and 12 more Neighborhood Markets. The number of Wal-Mart stores decreased 3.7 percent from the year before to 1,736 locations.
For Fiscal Year 2002, Wal-Mart plans to open approximately 40 new Wal-Mart stores and 170 to 180 new Supercenters, 100 to 110 of which will be existing discount stores. The Neighborhood Market concept will grow with 15 to 20 new locations. Sam's Club will add about 40 to 50 units, of which about half will be relocations or expansions of existing clubs.
The international division, which held 17 percent of Wal-Mart's total sales last year, is an area where Wal-Mart sees tremendous opportunity, as it strives to bring "Every Day Low Price" to a worldwide audience.
The division had almost $32 billion of sales in Fiscal Year 2001, an increase of more than 41 percent over the previous year. Almost one-fourth of Wal-Mart's stores are located outside the U. S., and more than 25 percent of the current year's store growth will be in one of the nine countries that comprise the international division.
Mexico has the most stores of the nine countries, with 499 units by yearend, featuring six different retail formats and the country's largest sit-down restaurant chain. The company also changed its name from Cifra to Wal-Mart de Mexico in fiscal 2001. The chain experienced extensive growth last year, as a result of Wal-Mart's implementation of its Every Day Low Price program.
Last year Dave Ferguson was named to head Wal-Mart Europe, which presently comprises Germany and the United Kingdom, as president and ceo, from his post of director of Wal-Mart's Canadian operations.
In addition, Wal-Mart completed renovation of 23 of its 94 stores in Germany, as well as introducing its Smart Price® and Great Value® private-label items in select stores. Now more than 250 Great Value® items and more than 120 Smart Price® products are available in Germany.
In the United Kingdom, Wal-Mart is beginning to add its ASDA/Wal-Mart Supercentre format to the retail mix. ASDA, which Wal-Mart purchased in 1999, is primarily a food retailer. Wal-Mart now has three ASDA/Wal-Mart Supercentres in the country and more will follow.
In Brazil, Wal-Mart entered Rio de Janiero with two Sam's Clubs and one Supercenter, as well as opening two additional Supercenters and one Sam's Club in Brazil, and began construction of a distribution center, which opened this April.
In Puerto Rico, Wal-Mart opened its first distribution center and remodeled two of the company's highest volume Sam's Clubs. Out of the six clubs on the island, the 106,000-square-foot Sam's Club at Bayamon, is consistently ranked as the top-producing club internationally since it opened in 1993, and another club at Carolina is ranked second internationally in sales.
The other four countries include an additional eight more stores in Canada for a total of 174 locations, and a new Supercenter in Argentina last year, for a total of 11 discount stores in that country. An underground store in Dalian opened in China during the past year. Wal-Mart also plans to grow its presence this year in South Korea, which now has six Supercenters.
Early in 2000, Wal-Mart formed a new company with Accel Partners, Palo Alto, CA, called Wal-Mart.com Inc, to accelerate the development of Wal-Mart's Internet retail site, wal-mart.com, and to further attract new customers. Jeanne Jackson was then named ceo in March 2000.
Earlier this year, Wal-Mart's merchandise mix also underwent some changes, as the discounter climbed to a new level with its 250-count sheet program. The Metro Living collection, manufactured by Keeco, South San Francisco, includes 100 percent cotton sheets with embroidery. Springmaid also has 250-count sheets at the retailer, made of cotton/polyester, and which include luxury bed in a bags, which debuted at Wal-Mart on the first of the year.
Wal-Mart has also initiated a new program called its Store of the Community, which takes individualized assortment to a new level. "The one-size-fits-all concept simply doesn't work anymore in the retail industry," Tom Coughlin, president and ceo of the Wal-Mart Stores division, said in the annual report. "Customers tell us what they want and it is our responsibility to meet those needs."
Under the new concept, the Store of the Community is stocked based on a combination of consumer purchasing data, area demographics, customer preferences and input from store associates. Customers' buying patterns are studied so that Wal-Mart buyers can better determine what does well at which store.
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