Wal-Mart warns on June sales
US consumers shift to cautious mode
Wal-Mart has cut its sales growth forecasts for June as a mood shift among US consumers reduced spending.
The world’s biggest retailer, which has been sounding a cautious note on sales for the past few weeks, said it now expects sales growth in June to be in the 2 to 4 per cent range. Its previous forecasts were for 4 to 6 per cent growth.
Unseasonally bad weather is the main culprit, along with disappointing Father’s Day sales, which saw key categories flat with last year.
While good weather in the same week last year boosted sales of summer lines, this year saw soup, hot cereal, and hot chocolate in demand. Sales of seasonal lines such as garden products and pool toys were very weak.
The strongest categories in the US included food, paper goods, and pet supplies, with electronics also strong.
Wal-Mart said that both customer traffic and average spend were up, but three-quarters of the growth came from increased footfall, suggesting that overall, US consumers are spending less.
