Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

In inflation war, Wal-Mart has front row seat

At its annual shareholder meeting, Wal-Mart CEO Lee Scott said Americans are struggling with rising food and fuel prices.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By David Goldman, CNNMoney.com staff writer

Wal-Mart fared well in its same-store sales in May as cash-strapped consumers searched for bargains.

NEW YORK (CNNMoney.com) -- The high cost of food and record fuel prices are limiting consumers' budgets, Wal-Mart executives said Friday at the company's annual meeting with shareholders.

"I wonder if Sam Walton could ever imagine a day where oil was $130 a barrel or milk was $4 a gallon," said Wal-Mart chief executive Lee Scott at the meeting.

Scott said Wal-Mart customers were faced with difficult decisions about choosing how and where to spend their money, as soaring prices have created a difficult environment for the average consumer.

"The biggest problems out there today are the problems our customers face the most," said Scott. "Rising oil and gas prices are squeezing family budgets, and food inflation is making it more difficult for parents to put a good healthy meal on the tables for their children."

As a result of Americans' cramped budgets, the company's executives said consumers have flocked to Wal-Mart stores because the discount retailer offers competitive prices.

"At a time when everyday Americans are struggling with everyday needs, price matters, said Wal-Mart chief executive of U.S. stores, Eduardo Castro-Wright, at Friday's meeting.

Thursday, Wal-Mart reported a 3.9% same-store-sales gain for May, excluding the impact of fuel sales. Same-store sales are recorded from stores open at the same time a year ago.

"Customers continue to rely on Wal-Mart to stretch their dollars," said Castro-Wright in a statement released Thursday. He reported that grocery sales were strong, as well as sales for flatscreen TVs, computers and digital electronics.

Wal-Mart also got a big boost from consumers who spent their economic stimulus checks. Though Scott had said in May that there was potential for a short term impact from stimulus checks, he noted that the company was unsure how much it would benefit from the tax rebates in the long run.

Wal-Mart (WMT, Fortune 500) Chief Financial Officer Tom Schoewe said Thursday that $350 million worth of stimulus checks were cashed at Wal-Mart stores during the month of May, but it was unclear what products customers spent that money on. To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
Black Friday 2015 in pictures Shoppers around the country braved the crowds to get their hands on the best Black Friday deals. More
Driving the ultimate in '50s Mercedes-Benz style The SC was the car that re-introduced Mercedes-Benz as a global luxury car icon. More
Driving the world's first car Driving a replica of the 1886 Benz Patent Motorwagen, the first internal combustion automobile. More