Wal-Mart halts sales slump through grocery business

Wal-Mart Stores Inc. had its first quarterly sales increase in more than two years, saying efforts to avoid passing rising food costs to consumers fueled ongoing strength in the grocery department.

The retailer’s grocery business continued its positive trend during the past quarter, Bill Simon, chief executive of Wal-Mart’s U.S. operations, said during a recorded conference call released Nov. 15 along with quarterly financial results.

Rising food costs continue to be a major concern for customers, Simon said. Wal-Mart is absorbing some of the cost increases in fresh produce, meat and other products as the company aims to “ensure price leadership” in the retail food market, he said.

Wal-Mart’s comparable-store grocery sales rose by low single-digits in percentage terms during the quarter, compared with the same period a year earlier, Simon said. The retailer’s food costs rose 4%, in line with inflation across the industry, Simon said. “But given our price investment, the impact to our customers was substantially less,” he said.

The results illustrate Wal-Mart’s continued emphasis on fruits, vegetables and other fresh foods after the world’s biggest retailer added grocery departments to most of its approximately 3,800 U.S. stores over the past few years. More recently, Wal-Mart expanded in large cities such as Chicago with smaller stores that also offer fresh foods.