Stocks of Retail Companies Soar in Arkansas

by Mark Friedman  on Monday, Oct. 29, 2012 12:00 am  

Wal-Mart found its way back to its core value, which is low prices, said Davidowitz.

In the late 2000s, Wal-Mart overhauled its stores by trying to make them look nicer. It even ditched its “Action Alley,” the place where promotional items were pulled off the shelves and displayed.

The moves failed. For the first time in Wal-Mart’s history, Wal-Mart’s U.S. same-store sales were down 0.2 percent for the fiscal year that ended January 2010. A year later, they were down 1.6 percent.

In February 2011, Wal-Mart CEO Mike Duke announced a return to the “Every Day Low Price Strategy.” Wal-Mart focused on having the lowest prices on food items, and the strategy is working, Davidowitz said. He said the average food customer goes to the store several times a week. And if grocery store customers are already in a Wal-Mart Supercenter, they can buy other items they need, he said.

Wal-Mart’s U.S. same-store sales were up 1.6 percent for the fiscal year that ended Jan. 31.

“Wal-Mart has repositioned themselves to be in a better place,” Davidowitz said.

And Wal-Mart’s stock surge reflects that, Davidowitz said. Wal-Mart has outperformed FinancialContent’s discount, variety store sector index, which it is a part of, between January and Oct. 12. The sector improved 19.6 percent compared with 26.4 percent for Wal-Mart during that period.

“They’ve really gone back to their tradition of [offering] the lowest price,” Davidowitz said. “They’ve now gotten back to that, and I think that’s helped them tremendously.”



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