Wal-Mart: Our shoppers are 'running out of money'

wal-mart, shopping, Mike DukeWal-Mart CEO Mike Duke (left) speaking to a gathering of industry watchers in New York on Wednesday. By Parija Kavilanz, senior writer


NEW YORK (CNNMoney) -- Wal-Mart's core shoppers are running out of money much faster than a year ago due to rising gasoline prices, and the retail giant is worried, CEO Mike Duke said Wednesday.

"We're seeing core consumers under a lot of pressure," Duke said at an event in New York. "There's no doubt that rising fuel prices are having an impact."

Wal-Mart shoppers, many of whom live paycheck to paycheck, typically shop in bulk at the beginning of the month when their paychecks come in.

Lately, they're "running out of money" at a faster clip, he said.

"Purchases are really dropping off by the end of the month even more than last year," Duke said. "This end-of-month [purchases] cycle is growing to be a concern.

Wal-Mart (WMT, Fortune 500), which averages 140 million shoppers weekly to its stores in the United States, is considered a barometer of the health of the consumer and the economy.

To that end, Duke said he's not seeing signs of a recovery yet.

With food prices rising, Duke said Wal-Mart is charging customers more for some fresh groceries while reducing prices on other merchandise such as electronics.

Wal-Mart has struggled with seven straight quarters of sales declines in its stores.

Addressing that challenge, Duke said the company made mistakes by shrinking product variety and not being more aggressive on prices compared to its competitors.

"What's made Wal-Mart great over the decades is 'every day low prices' and our [product] assortment," he said. "We got away from it."

Now, with its strategy of low prices all the time back in place, Duke said making Wal-Mart a "one-stop shopping stop" is a critical response to dealing with the rising price of fuel.

Americans don't have the luxury of driving all over town to do their shopping.

Other than competing on prices and products, Duke said Wal-Mart is focused on leveraging technology -- especially social networking -- more aggressively to drive sales.

"Social networking is much more a part of the purchasing decision," he said. "Consumers are communicating with each other on Facebook about how they spend their money and what they're buying."

Elsewhere, Duke said Wal-Mart is exploring a number of e-commerce initiatives to grow the business such as testing an online groceries delivery business in San Jose. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,417.65 226.28 1.32%
Nasdaq 4,684.28 46.29 1.00%
S&P 500 2,022.95 20.79 1.04%
Treasuries 1.75 0.03 1.57%
Data as of 3:44pm ET
Company Price Change % Change
Apple Inc 118.97 3.66 3.17%
Yahoo! Inc 43.67 -2.79 -6.01%
Bank of America Corp... 15.44 0.25 1.61%
Facebook Inc 77.20 0.96 1.26%
Microsoft Corp 42.08 0.90 2.17%
Data as of 3:32pm ET

Sections

The online retail giant reported earnings Thursday that beat Wall Street's expectations, sending shares higher after the closing bell. More

The Wednesday announcement that Don Thompson will retire as CEO of McDonald's leaves just two black CEOs in the elite Dow 30. More

Google reported a quarterly profit on Thursday that rose from a year ago, but the company fell short of Wall Street's expectations. More

On demand delivery startup WunWun is expecting its order volume to double by the time they close up shop on Monday. All thanks to a blizzard. More

The IRS said it has carried out thousands of audits of offshore schemes and pursued criminal charges that have resulted in "billions of dollars in criminal fines and restitutions." And it won't stop there. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2015 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2015. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2015 and/or its affiliates.