FAYETTEVILLE, Ark. (AP) — Wal-Mart Stores Inc. unveiled a $15 billion share buyback program Friday as it hammered home its message to shareholders at its annual meeting that the world's largest retailer will keep growing.
At a packed basketball arena at the University of Arkansas, CEO Mike Duke said Wal-Mart would add sales wherever it can: overseas, online, and in small towns and big cities.
"We are right in the sweet spot of the 'next-generation' customer...They're connected to the world through smart phones and social media. ... They're in charge of when they shop and how they shop. They know who has the lowest prices. But to succeed, we must also be the best at how we run our business," Duke said.
With Wal-Mart's U.S. namesake business in a two-year slump, Duke assured shareholders that the "greatest priority" is to get its revenue at stores open at least a year — a key measure of a retailer's health — to rise again.
But he said Wal-Mart continues to look for new customers around the globe — online and at its stores from China and the blue-collar suburbs of Sao Paolo, Brazil, to neighborhoods in Chicago. It's testing new services like its grocery delivery service in San Jose, Calif.
Duke's said the company has five priorities:
— Growth by adding customers, opening new stores and acquiring other retailers.
— Keeping costs low and passing the savings to customers.
— Building a global Internet business.
— Developing talent, including a greater focus on women and minorities.
— Expanding the company sustainability effort.
Wal-Mart is operating in a more difficult environment than a year ago on all fronts. Dollar stores, which have expanded their assortments, are blanketing the country, and Amazon.com's vast selection and low prices are stealing Wal-Mart's key advantages.
Meanwhile, rising gas prices and other household costs are squeezing shoppers' budgets and making it tougher to stretch their remaining dollars to the next payday. Shoppers are focusing on groceries and little else, said Bill Simon, president and CEO of its U.S. namesake business.
He noted to reporters that it's seeing the widest swing ever in spending around when shoppers get their paychecks. That's making Wal-Mart scramble harder to offer smaller packages for shoppers at the end of the month and alter its staff scheduling.
"Customers are struggling," he said.
Rising costs in commodities are also putting more pressure on Wal-Mart, which can't pass big price increases along to its already-stressed shoppers.
With revenue hitting $419 billion last year, Wal-Mart's worries matter, because it is a key barometer of consumer spending.
Wal-Mart's flagship business is still smarting from the mistakes it made on pricing and selection more than two years ago. The company has been racing to restock thousands of items, like different flavors of Cheerios, it culled as part of its overzealous bid to clean up its stores two years ago.
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