NEW YORK — Wal-Mart Stores has added back between 300 and 400 items in the grocery category alone that were eliminated as the company sought to reduce inventory and focus on growth categories, Thomas W. Schoewe, executive vice president and chief financial officer for the Bentonville, Ark.-based chain, told investors at a conference here sponsored by William Blair & Co.
"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 explained, "and on balance, I'd say that's gone quite well."
Over the last few years Wal-Mart reduced inventory from more than $35 billion to roughly $32 billion, Schoewe said — "an unusually low level that's not necessarily sustainable." In the last couple of years he said the company has let inventory levels increase to about $33.5 billion — an increase of about $1.5 billion during a period when sales grew by just under $100 billion, "which is incredible inventory efficiency," Schoewe pointed out.
"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," he acknowledged. "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. So within the last little while there would have been 300 or 400 items just in grocery alone that would have been added back to the assortment as we've done that evaluation."
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