Wal-Mart U.S. CEO Says Cutting U.S. Store Openings

Wal-Mart Stores Inc. is throttling back on U.S. store openings and cutting back on overall capital spending, instead seeking to boost sales at existing locations by remodeling stores and improving selection. That was the message at the retailer's yearly analysts' meeting on Monday.

Eduardo Castro-Wright, president and c.e.o. of Wal-Mart U.S., said the division plans to open 191 stores in the current fiscal year, which ends in early 2009; and 142 to 157 stores in fiscal year 2010, compared to 218 U.S. stores in fiscal 2008.

Wal-Mart also plans $5.8 billion to $6.4 billion in capital expenditures this fiscal year for its U.S. division, down from $9.1 billion last year.

In fiscal year 2010, it plans to spend $6.3 billion to $6.8 billion, Castro-Wright said.

Wal-Mart's efforts to manage its balance sheet and capital spending more conservatively in recent years are now paying off with low interest rates in the tight market for short-term corporate credits, the company said. Wal-Mart has borrowed several hundred million dollars in the last several weeks in the commercial paper market as it readies for the holiday season at an interest rate of "substantially less" than 2 percent, Lee Scott, Wal-Mart Stores Inc.'s c.e.o., said.

The giant retailer said it is attracting more higher-income shoppers thanks to the stressed economy. Traffic at stores serving households with incomes above $65,000 has been growing much faster than at the chain as a whole.

Scott stressed that "Christmas will come on Dec. 25" in spite of the economy and said Wal-Mart will have the best prices in the market for the holiday season. He also said that in tough economic times, shoppers want to "treat their families right" when they can, and that this was evident in sales of children's apparel and Halloween costumes.
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