Walmart CFO: Stores Replace 400 Grocery Items Previously Cut

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June 17, 2010

Backpedaling on a previous initiative to rationalize SKUs, Walmart is replacing between 300 and 400 grocery items it decided in February to cut, according to Thomas W. Schoewe, executive vice president and CFO.

At a New York meeting with investors the CFO indicated additional SKUs outside of the grocery category might be replaced on a case-by-case review, according to a Supermarket News report.

"We've done our best to rationalize out the products that weren't rapid growers while still making sure we have the assortment that is important to somebody for a one-stop-shopping experience,” he said. “And on balance, I'd say that's gone quite well."

Walmart reduced its inventory by about $3 billion over the past several years, from $35 billion to $32 billion, which Schoewe said is “not necessarily sustainable."

He added that the company recently boosted inventory levels to $33.5 billion when sales grew by nearly $100 billion, "which is incredible inventory efficiency."

Schoewe admitted "there were some examples when we thought we could take a product out of the assortment and the consumer would substitute something [else], and we made a mistake. We thought there would be substitution, and there was not. So we've added that product back because we value that customer and the traffic that you would have with that trip.”

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