Wal-Mart seeks to reassure investors on growth

By Jessica Wohl

FAYETTEVILLE, Ark. (Reuters) – Wal-Mart Stores Inc is trying to reassure employees and investors Friday that the company can reach out to shoppers online, on their phones and in small and large stores to drive growth.

Looking for sales in all the places consumers shop, including international markets like Africa, is important as the world’s largest retailer has suffered two years of declining sales at existing U.S. stores.

Even executives acknowledge that fixing the business is taking too long. Walmart U.S. Chief Executive Bill Simon told reporters Thursday about his “impatience with the pace of change” at his stores, which have lost bargain-seeking customers to dollar stores.

The company’s shares have also remained relatively weak. Wal-Mart shares are up 6.3 percent since the 2010 annual meeting, well below the 23.3 percent increase in the Standard & Poor’s 500 index over the same period.

Friday’s jobs report is going to make Wal-Mart’s job in the United States even more difficult. The U.S. jobless rate rose to 9.1 percent from 9 percent, while the consensus was 8.9 pct.

While business at the smaller international and Sam’s Club units has largely hummed along, all eyes are on what Wal-Mart CEO Mike Duke and his team are doing to stem the tide at the U.S. discount chain started nearly 50 years ago.

“We recognize we still have work to do, and comp sales growth remains the greatest priority for me and the entire Walmart U.S. team,” Duke said in a recorded call when the company reported first-quarter earnings.

Wal-Mart’s annual meeting is attended by investors and Wall Street analysts but is largely a staged showcase to energize the company’s employees, known as associates.

Associates come from across the United States, Canada, China and several other countries to attend the meeting. They pack hotels and even stay in dormitories at the University of Arkansas.

Chinese associates lined up at the company’s home office nearby Bentonville this week just to take a picture with a wall mural that shows “Mr. Sam,” the company’s founder, Sam Walton.

Also joining the fray this year are some Massmart Holdings Ltd employees, now that Wal-Mart’s purchase of a majority stake in the South African chain has been approved.

Massmart Chairman Mark Lamberti and CEO Grant Pattison were introduced to the crowd packed into the Bud Walton arena on the university campus on Friday morning.

While vuvuzelas played from the South Africa part of the crowd, the biggest noise early in the morning came from thousands who cheered when movie star Will Smith was introduced as the emcee.

Still, the big question on most minds is whether U.S. strategies, including bringing back more merchandise and opening smaller Walmart Express stores, will work.

While Walmart Express has gotten a lot of attention, that format — modeled after several smaller stores operated outside the United States — is not expected to be the major growth engine for Wal-Mart.

Supercenters are still crucial. More than 100 are set to open this year, while just 15 to 20 Walmart Express stores will make their debut in northwest Arkansas, North Carolina and Chicago.

The first Walmart Express, opening in Gentry, Arkansas, this weekend, stocks everything from milk to pillows in a 15,000-square-foot space. (Reporting by Jessica Wohl; editing by John Wallace, Dave Zimmerman)