Looking out for Number One

Wal-Mart didn't get to be number one by sitting on their hands. Here are couple of stories that highlight the fact that Wal-Mart is looking for inroads in health care and international markets, not to mentioning fending off would be rivals in the grocery business. What's more, not all stock analysts are bearish about Wal-Mart.

From The Salt Lake Tribune:
For Wal-Mart Stores Inc., the road to a higher share price is paved with chicken feet and Spam. The world's largest retailer, long the biggest importer of goods into the U.S., last year joined a list of the top 100 U.S. exporters for the first time. It sent 39 percent more shipping containers overseas than General Motors Corp., and surpassed cigarette maker Altria Group Inc. Although only a fraction of the $18 billion in goods it bought from China alone in 2005, exports will increase further as Wal-Mart targets a third of its sales growth from abroad amid the slowest gains at U.S. stores in at least 27 years. International sales will expand to 30 percent of Wal-Mart's total in 2010, up from 22 percent last year, estimates Citigroup Inc. analyst Deborah Weinswig. International markets ''could be like a savior for Wal-Mart,'' said David Abella, an analyst at Rochdale Investment Management in New York, with $2.4 billion in assets including Wal-Mart shares. The expansion may help end the seven-year stock slump for Wal-Mart. The shares will rise 29 percent in the next 12 months, says Weinswig. She is top-ranked by Institutional Investor and rates the stock ''buy.'' Since reaching a record $69.44 in December 1999, the per-share price has dropped by a third. Wal-Mart will report quarterly financial results Aug. 14. The stock trades in the $45 range.

From The Wall Street Journal, reprinted online at JournalNow:


Twelve years ago, Wal-Mart Stores Inc. executives welcomed Terry Leahy to the company’s headquarters in Bentonville, Ark.
Leahy, newly promoted at Tesco PLC and considering an overhaul of the British retailer, spent an afternoon discussing operations with Wal-Mart executives.
Today, Wal-Mart is doing everything it can to stop Leahy from crashing its last big growth business: groceries. It has a team of executives hunkered down far from Bentonville in the San Francisco Bay area devising two new small-footprint stores, including a response to the November launch of Tesco’s U.S. grocery stores, according to people familiar with the group.
Their brainchildren represent an unlikely step for staid Wal-Mart: One idea calls for urban convenience stores less than a tenth of the size of the company’s supercenters and stocked with groceries geared to more affluent tastes. Another plan calls for stand-alone stores offering a variety of health services and products. The new outlets are being prepared for introduction early next year.
David Wild, the Wal-Mart senior vice president of new business development, is leading the initiatives. He declined to comment. A Wal-Mart spokesman wouldn’t provide specifics but said, “Our business is constantly evolving, and we’re always looking for new and innovative ways to serve our customers.”
The company may have waited too long to develop successors to its big-box U.S. stores. Analysts now chopping their profit estimates for this and next year say that Wal-Mart has seemed tone-deaf to consumer trends. Failed pushes in women’s fashions and home decor continue to sap profits, and high gasoline prices are eating into supercenter visits. Recently, Wal-Mart has tried running ads promoting its low prices as worth the extra travel.
Nonetheless, the smaller stores could help Wal-Mart do more than fend off Tesco. The retailer has been largely shut out from upper-income and urban markets, including those in California and New York. High land costs and local opposition have limited the discounter to just 28 supercenters in California, a tenth of the number in Texas. Smaller stores are less likely to stir up opponents than the hulking 200,000-square-foot big-box stores.
In health care, Wal-Mart sees itself providing an array of services and home-health equipment along with the prescription eyeglasses and pharmaceuticals that it already sells, according to a person familiar with the effort. “In five years, Wal-Mart wants to be on its way to becoming the No. 1 health-care company in America,” that person said.