Wal-Mart Single-day Sales Rise

Wal-Mart Stores Inc. reported record single-day sales for Friday, Nov. 23, of more than $1.25 billion at the company’s domestic Wal-Mart stores, Supercenters and Neighborhood Markets. That compares to $1.1 billion in sales for the day after Thanksgiving a year ago.

Tom Williams, a company spokesman, said same-store sales for the Wal-Mart division (which excludes Sam’s Club discount stores) were “up in the mid single-digit range” over the comparable day in 2000.

Wal-Mart’s “holiday blitz,” an annual five-hour day-after-Thanksgiving event, drew heavy traffic to its stores, Williams said. Top-selling items throughout the blitz included home electronics, toys and small appliances.

“Yesterday’s record sales and heavy traffic into our stores demonstrated that consumers are looking for the kind of value, selection and customer service that Wal-Mart delivers every day,” said Tom Schoewe, Wal-Mart’s executive vice president and chief financial officer.

Williams said the Wal-Mart division was above plan in same-store sales for the entire week that included Thanksgiving, and Sam’s Club was slightly below plan. Wal-Mart told analysts the company expected stores to see a 4 to 6 percent increase in sales over last year for Thanksgiving week.

Williams said “unusually warm weather” may have dampened sales for the week.

• Chuck Conaway, CEO of Kmart Corp., Wal-Mart’s chief rival, said he will restore part of the drastic cut he made in advertising costs as he struggles to invigorate limp sales at the nation’s second-largest discounter.

“There’s no doubt we made a mistake by cutting too much advertising while the competition increased theirs,” Conaway said during a third-quarter conference call with analysts and investors on Nov. 27. “Clearly, we’ve learned where the threshold of pain is in advertising.”

This year, Conaway slashed 50 percent in costs relating primarily to advertising circulars. As a result, his Sunday sales, particularly on TVs and VCRs went south.

However, “encouraging” results from newspaper inserts used nationwide on Sunday, Nov. 25, are fueling plans to increase advertising by about 30 percent in December and 20 percent in January.

During the Thanksgiving weekend, Kmart’s sales jumped 8.4 percent over the same period last year. But that could be because Conaway initiated a store-a-thon by keeping the doors open for 66 consecutive hours.

Conaway’s actions come during a restructuring of Kmart. Earlier on Nov. 27, Kmart reported a loss of 25 cents a share, minus charges. It was considerably deeper than last year’s loss of 14 cents a year, but he still managed to eke out a better-than-expected performance.

The Thomson Financial/First Call consensus of analysts’ expectations was at 27 cents-a-share loss for the quarter, excluding $94 million in charges used mostly to cover the costs of implementing a new supply-chain strategy.

Conaway admitted on the call that getting rid of 25 percent of the company’s suppliers and moving to an inventory position goal that is 40 percent vendor-financed had caused problems.

“Clearly there were some miscommunications,” he said. “There was a lot of noise from a small group of suppliers. Remember, we cut a quarter — one quarter — of our suppliers. Most people aren’t happy with us.”

Conaway conceded that Kmart was still far behind No. 1 rival Wal-Mart in pricing, but he bragged about his stores’ position against traditional drug and grocery store operators. Kmart’s prices are 15 percent to 20 percent lower than traditional drug stores, and 5 percent to 15 percent below supermarkets, he said.

For the third quarter, Kmart reported sales of $8.02 billion, a decline of 2.2 percent from $8.19 billion a year ago. Same-store sales fell 1.5 percent.