WASHINGTON/NEW YORK (Reuters) – The head of Wal-Mart Stores Inc (WMT.N), the world’s biggest retailer, said on Wednesday there remained a “lot of stress” in the economy and he did not anticipate a quick end to the recession.
“There’s still a lot of stress,” Wal-Mart CEO Mike Duke said on a taped interview on NBC’s “Today Show.”
“It’s not a ‘V’ recession, where we’re just going to bounce out and come back,” he said.
Duke’s comments aired a day after a government report showed that sales at U.S. retailers unexpectedly fell 1.1 percent in March and after Wal-Mart last week reported a lower-than-expected rise in March sales at U.S. stores open at least a year.
Also on Wednesday, Burger King Holdings Inc (BKC.N) said it faced an “unanticipated traffic slowdown” in March across most company-owned hamburger restaurants, while the government said U.S. consumer prices fell unexpectedly last month, recording their first annual drop since 1955, as slumping demand pushed down energy and food costs.
The reports have dimmed hopes that the U.S. recession is close to hitting bottom, and show consumers are keeping a tight grip on their wallets. In early trading, Wal-Mart shares gained 10 cents to $51.22.
Duke said that by the end of the month, just before traditional paydays, customers are left with only a few dollars to spend.
He said the downturn will lead to a “sustained change” in the way that families live. But he added that customers are buying electronics, like flat screen TVs or video game systems, as they cut back on entertainment outside of the home or scrap vacation plans.
Separately, Wal-Mart’s China unit said it will eliminate one management layer of its stores in China to improve efficiency, affecting up to 1,400 people.
The retailer, which has 147 outlets in China and employs more than 50,000, will offer affected employees the option to move to new stores or take other positions with lower salaries.
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Filed under: Chain Stores, Discount Stores, News & Articles, Retail Formats | Tagged: Berger King, Chain Stores, Consumer, electronics, Entertainment, Flat Screen, Recession, Retail, Slowdown, Spending, TV, Video Game, Wal-Mart China |