Walmart PL Sales Rise, Overall Revenues Decline Again

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May 24, 2011

Walmart reported its eighth consecutive quarterly sales decline for the U.S., as surging gasoline prices and high unemployment pushed consumers to discounted items and cheaper private label products.

However, first quarter net income rose 10 percent as the world's largest retailer benefited from cost-cutting, robust growth in its international business and higher margins on its growing private label business, according to financial news reports.

A key driver of Walmart’s declining revenues is declining customer counts in U.S. stores for the fourth consecutive quarter. Executives offered Wall Street a muted outlook for the current quarter as shoppers worry about jobs and their finances.

"Our customers, particularly in the United States, are still concerned about their personal finances and unemployment, as well as higher fuel prices," said Mike Duke, Walmart’s president and CEO.

Over the past year Walmart has offered fewer brands as part of a campaign to declutter its stores, and this has hurt sales, company officials acknowledged during a prerecorded conference call.

IHOP Brand at Walmart
In other Walmart news, more than 3,000 of the retailer’s U.S. locations launched IHOP’s new line of premium frozen breakfast items.

IHOP plans to expand the line and distribution to additional retail and grocery outlets in the coming months, however, until then Walmart retains the exclusive distribution rights. The new IHOP at HOME products include French Toast Stuffed Pastries, Omelet Crispers and Griddle 'n Sausage Wraps.

Nearly 84 percent of all breakfasts originate in the home, according to NPD Group's National Eating Trends. IHOP said it recognized that today's consumers want convenient, quality breakfast items and responded by entering into a licensing agreement to produce and distribute IHOP-inspired retail frozen breakfast items.

"When our guests don't have the time to visit an IHOP Restaurant but don't want to settle for their at home breakfast, IHOP at HOME provides a delicious new option," said Jean Birch, IHOP president. "IHOP has long been loved for its unique breakfast dishes that can't be found elsewhere, and IHOP at HOME offers busy, on the go consumers delicious new choices for the most important meal of the day."

IHOP at HOME products are not available at IHOP restaurants.

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