The Wal-Mart/Sam's Club superblock project, near Ala Moana Center, is seen under construction in February. Scheduled to open next year, it is one of nearly 200 stores planned by the giant discount retailer to begin operations nationwide in 2004.

Wal-Mart tells analysts
growth rate can continue

LITTLE ROCK >> The chief executive officer of Wal-Mart Stores Inc., the world's largest retailer, told industry analysts yesterday 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," CEO Lee Scott said.

"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."

The company plans to open as many as 195 new stores and replace or expand another 160 in the United States next year. That would add 50 million square feet of retail space, the equivalent of the entire Wal-Mart chain in 1985, Scott said.

The majority of the new stores or renovations will be Supercenters, the high-volume stores that average $100 million in sales in their first year. Mike Duke of Wal-Mart's domestic division said the company was pleasantly surprised to discover that it was better off opening several Supercenters in the same area, as close as three miles apart, rather than supplementing one with Neighborhood Market groceries and its other smaller units.

Beginning in February, Wal-Mart plans to open 50 to 55 new discount stores, 80 to 90 new Supercenters, 25 to 30 new Neighborhood Market groceries and 15 to 20 new Sam's Clubs in the United States. (On Oahu, Wal-Mart is building a massive combined Wal-Mart/Sam's Club next door to Ala Moana Center, scheduled to open next year.)

The company said an additional 140 Supercenters and 20 Sam's Clubs will expand or replace existing stores.

Wal-Mart maintains that it will post earnings per share from continuing operations during the third quarter of 45 cents to 47 cents. 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 International, meanwhile, plans to open 100 to 110 new stores in existing markets and replace or expand 30 stores.

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

But Menzer said he sees opportunity for acquisitions and sales growth for the $40.8 billion division, driven by the George specialty stores and Mary-Kate and Ashley brand teen apparel, named after the teenage TV celebrity Olsen twins.

Wal-Mart has 1,494 discount stores, 1,386 Supercenters, 532 Sam's Clubs and 56 Neighborhood Markets in the United States. The company has about 1.1 million employees in the United States and about 300,000 in other countries.


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