Wal-Mart aims for even lower prices
Wal-Mart CEO says the retail giant is 're-energizing' its discount programs to offset gas prices, boost traffic.
NEW YORK (CNNMoney.com) -- Wal-Mart is preparing to go deeper with discounts in a bid to boost customer traffic and offset lost sales as higher gas prices force its core low-income shoppers to cut back, Wal-Mart CEO Eduardo Castro-Wright told an industry gathering Thursday.
"We've reenergized our rollback program to convince consumers that the smart thing is to go to Wal-Mart and save more," Castro-Wright announced during his presentation to analysts at the Goldman Sachs retail conference in New York.
Castro-Wright said the company was gearing up to develop media and in-store advertising efforts to communicate this latest initiative to its consumers.
He added that the move was in response to Wal-Mart's (Charts) own market research, which evaluated its customers' exposure to gas prices and asked what "we could do to help make it worthwhile for shoppers to make the additional two to three mile trip to our stores."
He said the recent run-up in fuel prices was changing the way Wal-Mart customers shopped. "They're cutting down on the number of trips to Wal-Mart stores and stocking up on weekends."
Wal-Mart spokesperson Sarah Clark stressed that Wal-Mart was constantly evaluating its "rollback" discount program. "We want to ensure that it continues to provide significant savings at a time when every penny counts to our customers."
Castro-Wright's presentation was monitored via webcast in New York.
Wal-Mart, the world's largest retailer, recently reported August sales at its stores open at least a year - a key measure of retail performance known as same-store sales - that were at the high end of its moderate forecast.
At the same time, the sales growth was fueled mostly by purchases of food, drinks and other consumables rather than by other discretionary items such as apparel, footwear and electronics.
But higher energy costs also hurt these big-box operators on the back end of their business .The risk to Wal-Mart, which operates more than 3,000 namesake stores in the United States, is in the higher utility and transportation costs embedded in running its vast trucking fleet, according to Castro-Wright.