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BENTONVILLE, AR-On the first day of its two-day meeting with analysts and investors, Wal-Mart Inc.’s executive staff focused on its price leadership position in a down market. The gist of yesterday’s call is that the company plans to reinforce its position by investing up to $1 billion in 2009 to remodel stores and limit new store openings.

Eduardo Castro-Wright, president and CEO with Bentonville, AR-based Walmart USA, said the decision was made in 2007 to cut down on capital expenditures by boosting capital efficiencies. He pointed out the route to those efficiencies was a serious investment in store remodels. The goal is to clean up the stores so customers can see merchandise and prices more clearly in hopes of generating more sales. In addition, he said “we’re reducing the number of new stores we’re planning to open next year.”

Wal-Mart’s figures showed new store investment to date this year totals $6.8 billion. In 2009, the company estimates it will invest $3.8 billion to $4.8 billion for new locations. In addition, the stores to be built will be smaller, ranging from 140,000 sf to 170,000 sf. The typical Walmart store for the past two or three years ago has been well above 200,000 sf, Castro-Wright told analysts and shareholders.

Castro-Wright said the remodel budget will go from $0.7 billion this year to nearly $1 billion in 2009. Castro-Wright pointed out the remodel and redesigns are aimed at attracting a new breed of customer. “Customers with household incomes of more than $65,000 is a fast-growing segment,” he said. “It’s growing much faster than the segment below $65,000.”

John Fleming, Wal-Mart’s chief marketing officer, said the interior changes are geared at stimulating more effective space allocation so shoppers can better see prices and merchandise set-ups. Space reallocations will impact the stock rooms in the back to the front end, where people pay for goods. From a retail perspective, he said it will result in wider, cleaner aisles and a more efficient product display although the customer won’t necessarily notice.

“What they’ll see is clearer assortments, price leadership and exaggeration of the growth categories,” Fleming explained. “This is part of our platform to drive product sales and price leadership.”

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