Wal-Mart Stores Inc. (Bentonville, Ark.) reported its lowest quarterly sales growth in more than two years. Blaming high gas prices, which reduced the number of trips consumers made to Wal-Mart Supercenters, the world’s biggest retailer said sales increased 9.5 percent in its first quarter ended April 30, 2005, the smallest sales growth in nine quarters.
Though net sales and income reached record levels, the overall feeling was one of disappointment and concern. “We achieved record results in the quarter,” said president and ceo Lee Scott. “Yet with higher gasoline prices and a cooler and wetter spring than normal, we missed our plan. We are making the necessary adjustments and I anticipate better results in the second half of the year.”
Target Corp. (Minneapolis) fared better, announcing a 15 percent jump in profits and a 6.2 percent jump in same-store sales. Wal-Mart’s same-store sales, by comparison, were up only 2.9 percent. “The performance was not up to our standards,” said a Wal-Mart spokesman.
“We are pleased with our first quarter results,” said Target chairman and ceo Bob Ulrich. “Our performance reflects our discipline in executing our strategy and our success in delighting our guests with the right combination of innovation, design and value. We are optimistic about our ability to sustain our competitive advantage and remain confident that we will continue to enjoy profitable market share growth throughout 2005 and beyond.”
Overall, high gas prices did not seem to keep consumers from shopping. The U.S. Commerce Department reported that sales climbed 1.4 percent in April, double the median forecast of economists, after a rise of only 0.4 percent in March. Excluding auto purchases, which were bolstered by big discounts, spending grew 1.1 percent in April, the most in six months and far better than a 0.2 percent increase in March.