Company stays tight-lipped on new strategies, projects

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KANSAS CITY, Mo. - When Wal-Mart Stores Inc. filled the Kansas City convention center with its store managers and suppliers this past week, the world's largest retailer kept the discussions about its merchandise and strategies for the coming year a strictly internal matter.

Wal-Mart executives met with managers and suppliers last week to discuss the company's new objectives and products, which will have a ripple effect throughout the retail sector. Analysts say Wal-Mart is at a crossroads after poor holiday sales.  AP / File
AP / File
Wal-Mart executives met with managers and suppliers last week to discuss the company's new objectives and products, which will have a ripple effect throughout the retail sector. Analysts say Wal-Mart is at a crossroads after poor holiday sales.

The annual gathering was particularly important this year because Wal-Mart is struggling to rekindle sales growth. But the company made no announcements from the meeting and didn't allow the media to attend, which means that whatever plans its executives laid out for the new year will be publicly gleaned only as Wal-Mart implements them.

"I don't think we'll see any major announcements or dramatic overhauling," said Richard Hastings, the vice president and senior retail sector analyst at Bernard Sands.

That might be hard for the millions of Wal-Mart watchers around the world. Because of its sheer size, the decisions it makes on what to sell and how to sell it can have a broad impact; Wal-Mart's annual sales are greater than those of its next six competitors combined, including Target Corp., Sears Holdings Corp. and Kroger Co. By the company's reckoning, 84 percent of American households shop there at least once a year.

"What Wal-Mart does has an impact on everybody in this country, because even if you don't shop there, the place you do shop competes with Wal-Mart," said Charles Fishman, the author of The Wal-Mart Effect: How the World's Most Powerful Company Really Works and How It's Transforming the American Economy.

For many manufacturers, Wal-Mart is their biggest customer. Ms. Fishman said Wal-Mart's decisions on what 140,000 or so products go into its Supercenters affect inventory and pricing across the retail sector.

The four-day Kansas City meeting of 7,000 store managers and hundreds of suppliers is where the retailer lays out objectives and merchandise for the year ahead and gets its people and vendors motivated. The convention center's rooms feature mock-ups of store aisles and displays that will be in its nearly 4,000 stores.

This year's meeting came as analysts said the company is at a strategic crossroads after reporting its worst holiday season ever, as measured by sales growth at stores open at least a year.

"They're under pressure to become a lot more like Target," Mr. Hastings said, explaining that Wal-Mart will have to offer trendier styling at Wal-Mart prices to keep up with the faster-growing Target.

Wal-Mart has had mixed results from a strategy launched in 2005 that aimed at doing just that. Its attempts to improve its image by selling more stylish clothing and home furnishings have fallen flat, though its push for higher-price electronics such as flat-panel TVs has done well.

The company is still drawing customers purchasing food, household products and other staples, but lower-income shoppers cut back their purchases when the price of gasoline hovered near $3 a gallon, and many more affluent consumers have been lured away by competitors.

Some of the problem is likely because of the fact that many older Wal-Mart discount stores look their age; the company is in the midst of remodeling them.

Wal-Mart's struggles - and the difficulty it's having in resolving them - are reflected in its same-store sales figures. These sales, which show business at stores open at least a year, are considered the industry standard for assessing a retailer's strength.

For the first 11 months of the fiscal year, which ended in late January, Wal-Mart's same-store sales were up 2 percent, compared with 3.5 percent gains in the same periods of 2005 and 2004. The company, which had more than $312 billion in sales in its last fiscal year, will release its full-year figures next Thursday.

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uscfan
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uscfan 02/03/07 - 09:47 am
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As a former Walmart asociate

As a former Walmart asociate ( employee) I know the way they treat employees. Every negative think you have read about them is true. The company changed dramaticely when Sam Walton died. Noted financial analysis Jim Cramer recently called them one of the worst managed companies in the world

patriciathomas
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patriciathomas 02/03/07 - 12:04 pm
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Wal-Mart understands the

Wal-Mart understands the American economic system and takes advantage of the American Dream. As a company they realize that they either grow or begin to decline. They'll adjust to the marketplace and continue to do well. Even if 100% of their employees aren't 100% happy.

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