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Thu, Oct 02, 2003 - Page 12 News List

Wal-Mart won't stop expanding, executive says


The chief executive officer of Wal-Mart Stores Inc, the world's largest retailer, told industry analysts not to expect the company's phenomenal growth to slow anytime soon.

"People ask me, `Can Wal-Mart continue to grow? Can it continue to add 8 percent new square feet of stores per year?' Well, we don't see a change in being able to accomplish those kinds of numbers," chief executive Lee Scott said Tuesday.

"Wal-Mart stores only have 3 percent of the formal market share, so there's no short-or mid-term limit on Wal-Mart's growth," Scott said.

The company plans to open as many as 195 new stores and replace or expand another 160 in the US next year.

Wal-Mart International, meanwhile, plans to open 100 to 110 new stores in existing markets and replace or expand 30 stores.

Wal-Mart maintains that it will post earnings per share from continuing operations during the third quarter of US$0.45 to US$0.47. Earnings are currently tracking in the middle of that range.

In his opening comments for Wal-Mart's analysts' meeting, Scott addressed concerns that the company, which started as a neighborhood five-and-dime, would become an unmanageable behemoth.

"We've learned that the disadvantages of size come without any work at all, but the advantages come with a great deal of work and coordination," Scott said.

Wal-Mart has long prided itself on being immune to nationwide economic downturns, but Scott said the deflationary retail environment will be a challenge.

"This bagless vacuum cleaner went from US$98.88 to US$68.82 in two years," he said. "But the cost of moving the product is absolutely more expensive than it was two years ago. That puts a tremendous amount of pressure on us to increase productivity at the store level."

John Menzer, president of the international division, said deflation in Asia "continues to be a threat," while German and Japa-nese consumer confidence is suffering from price increases.

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