Stephens: Wal-Mart is focused on improving customer experience

Stephens issued a research brief on Wal-Mart Stores, Inc.
after an investor meeting with members of the executive team including CEO Greg Foran. Currently Stephens rates Wal-Mart as Overweight with a $97 price target. John Lawrence, an analyst at Stephens, wrote, "The overarching premise of the meeting centered on strategic areas of focus for improving the U.S. business, namely, refocusing on in-store customer experience, improving assortment, sharpening pricing and improving inventory flows. Management believes that refocusing on these issues can help to improve traffic and ticket while still maintaining Every Day Low Cost (EDLC) disciplines." Based on unannounced store visits by upper level management and an extensive review process, Wal-Mart has discovered that in an effort to offer the lowest prices on everyday products they have neglected customer service. Managers have started to reduce the price of products as they near expiration, reducing shrinkage. This initiative alone is delivering a retail run rate of $500 million in savings annually. Going forward lower gasoline prices will continue to give customers more disposable income to shop at retail stores including Wal-Mart. The retail conglomerate will continue to prioritize low prices by using its size for leverage with vendors. Currently Wal-Mart is trading at $81.11, up 0.15 percent.
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