Wal-Mart expects to be in heavy investment mode for the next 18 to 24 months as the company improves the way it handles inventory and outfits more locations, with in-store pickup for online orders.
The Bentonville, Arkansas-based company also is working to make pricing more competitive in private-label products and bolstering its grocery business, Wal-Mart executives said Wednesday in a presentation to analysts.
“We have as a top priority to grow sales and market share,” Greg Foran, head of Wal-Mart’s U.S. operations, said at the event. “And that starts with improving the core and concurrently investing for the future.”
The world’s largest retailer is in the midst of a costly turnaround plan under chief executive officer Doug McMillon, who took the reins a little more than a year ago. As part of the effort, Wal-Mart is raising wages this month, aiming to retain workers in an increasingly tight labor market. Half a million of its employees will see a bump in pay, with hourly rates going to $9 an hour now and $10 by next year.
Investors have had a tepid reaction to the boost in spending. When Wal-Mart announced the pay hike in February, it said the move would weigh on earnings. The shares fell 3.2 per cent that day, the biggest one-day decline in four months.
Bloomberg News, edited by ESM
