Budget shoppers boosting Wal-Mart

Posted by admin on 14 August, 2008 under Business news | Be the First to Comment

The world’s largest retailer, Wal-Mart, has reported a 17% rose in quarterly profits after US shoppers heading to its stores in search of cheap goods.

Wal-Mart said net income in the three months to 31 July rose to $3.45bn (£1.8bn), up from $2.95bn last year.

It also upped its full-year earnings outlook, with shoppers expected to seek low prices on food and other items in the face of inflation worries.

Wal-Mart’s UK arm, Asda, said like-for-like sales excluding fuel were up 5.5%.

The UK’s second-largest supermarket said its market share rose 0.6% to 12.3% in the 12 weeks to 13 July against the same period a year ago.

Handily placed

US prices rose by 5.6% in the year to July, the fastest inflation rate for more than 17 years, according to figures released on Thursday.

A number of large retail brands suffered a drop in sales during July, but observers have suggested that Wal-Mart is better-placed than many retailers to ride out the tough times.

Wal-Mart said food, health-care and electronic products are in demand at its stores.

“What we see, as do many around the world, is a global economy that is difficult,” said Wal-Mart chief executive Lee Scott.

“When energy and oil prices go up on top of inflation and health care and core food items, there’s a great deal of pressure on the customer,” he added.

News reported by The BBC