Wal-Mart Scales Back Growth

Wall Street Reacts Enthusiastically To Shift in Focus

FAYETTEVILLE, Ark., June 1 -- Wal-Mart gave investors something Friday that they haven't seen in some time: a reason to pour money into its shares.

The retailer, under pressure by investors to improve its sales, said at its annual shareholders meeting that it is trimming store growth as it balances its traditional focus on low prices with a push to be a force for change in such areas as health care and the environment. Its shares rose almost 4 percent on the news.

Wal-Mart added that its new mantra is to help customers live better by saving money.

Wal-Mart said it would scale back the number of planned U.S. supercenter store openings this year by more than 25 percent, a move that will drop its capital expenditures by $1.5 billion in the current fiscal year and help improve store sales.

"The priority for a potential store is selecting a location that makes the most efficient use of capital resources and aligns with market growth priorities," said John Menzer, Wal-Mart's vice chairman and chief administrative officer. "We also have been focused this year on reducing cannibalization of existing stores via our more strategic selection of U.S. real estate projects."

Wal-Mart said it will open 190 to 200 supercenters in the United States this fiscal year, with an average of 170 supercenters each year for the next three years.

Wal-Mart's carefully staged gathering displayed no signs of doubt about its business. Its executives dismissed its union-backed critics, who have attacked the company on a variety of issues, including health care, wages and buying from China.

Instead, Wal-Mart spent much of the morning praising its employees as heroes and itself as a provider of a better life for customers and opportunities for workers. The company promoted a host of recent initiatives, calling its $4 generic-drug program and the expansion of its in-store health clinics ways to help solve the health care crisis.

Executives also trumpeted Wal-Mart's environmental programs, including its pushes to sell energy-efficient light bulbs and for suppliers to reduce packaging.

"Your company makes a difference in the lives of real people," said chief executive H. Lee Scott Jr. in an address to thousands of cheering employees from around the world.

Proposals from activist shareholders, whose ranks included religious orders, unions and a free-market think tank, were rejected by wide margins, in line with recent years. The 11 proposals included calls for Wal-Mart to report on the gap in pay and benefits between its top executives and lowest-paid workers, the percentage of stock awards to employees based on gender and race, and the grounds for its charitable giving.

The four-hour event, which mixed music and celebrities with serious business, featured performances from actress Jennifer Lopez, "American Idol" winner Jordin Sparks and the comedian Sinbad.

Shares closed at $49.47, gaining $1.87, or 3.9 percent. It was their best one-day showing since Oct. 23, 2006, when the shares rose 3.9 percent, according to Thomson Financial.