NEW YORK (CNN/Money) - Wal-Mart Stores Inc. CEO Lee Scott said Sunday the world's No. 1 retailer expects to see modest growth in its next fiscal year, and defended his company against criticism that its reliance on Chinese suppliers has led to a loss of U.S. jobs.

Scott, speaking on the opening day of the National Retail Federation's annual convention in New York, said the company did "modestly better" in 2003 than the previous year and he expects Wal-Mart will grow "modestly" again this year.

Scott said that with more of the Bush adminstration-backed tax cuts going into effect this year, the impact should be " very beneficial" to Wal-Mart's business.

He also said employment, which didn't improve in December as much as economists believed, will be important as well.

"The jobs picture is important for the psychology of our customer," Scott said. "The fact that jobs are growing and not being eliminated is very important to consumers."

Scott gave a nod to high-end retailers who fared better than his giant discounter in the holiday season just ended.

"Looking at the comparable sales this Christmas, maybe we should put a Wal-Mart-Tiffany's program out there, or a Wal-Mart-Nordstrom program based upon their sales," Scott joked.

Wal-Mart posted a 4.3 percent increase in December same-store sales this holiday season, below its past rate of growth but above the projection the company made shortly after Christmas, due in part to a late shopping rush.

For its fiscal year ending January 2005, Scott said Wal-Mart expects to open 220 supercenters, about 50 new discount stores, between 25 to 30 of its neighborhood markets and between 130 to 140 Wal-Mart stores internationally. Scott mentioned India and Russia as being potential targets for Wal-Mart stores, and added that China offers the possibility of the kind of fast growth that Wal-Mart has seen in the United States over the past decade.

"People read our plans and read a grand strategy in it. There isn't a grand strategy," he said. "There are a lot of people serving customers in different ways than we can. Can we emulate Nordstrom? Probably not. Would we like to sell more shoes? Sure."

"We'll continue to grow. I don't think we're going to rule the world," Scott added.

The CEO was defensive about criticism that Wal-Mart's trade with China has led to the loss of U.S. manufacturing jobs."

"We're not the only company in the United States that imports from China," Scott said. "Global business is here to stay. Wal-Mart does pay more for U.S.-made products, prices them competitively and puts them on the shelves. But it can't tell the customer what to buy."

"The world is changing," he added. "That, at times, will be uncomfortable for all of us."

The Wal-Mart chief also suggested that the makers of products use a little more imagination. "If [your product] doesn't do anything for the customer, he won't buy it," Scott said. "Consumers are responding to innovation. When they see an innovative product, they'll find the money to buy it."

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Scott also said he sees more industry consolidation among retailers and suppliers. And, contrary to the growth of supercenters that has marked his company over the past decade, he believes the retail landscape will be dotted with significantly more stores that are smaller in size for two reasons: they're more convenient, and neighborhood zoning laws won't let retailers develop large stores.

Scott's address to members of the retail industry on the opening day of "Big Show 2004" was the first-ever by a Wal-Mart (WMT: Research, Estimates) executive at the show. And judging by the packed auditorium, his afternoon speech, followed by a question and answer session, was a highly-anticipated event.