Wal-Mart reinstates items as shoppers turn to Lowe's, Walgreen

The company met with suppliers about reinstating items to keep customers from going to other stores, said Leon Nicholas, a director at consulting firm Kantar Retail who has spoken with manufacturers about the move. Wal-Mart, based in Bentonville, Arkansas, said it frequently assesses product assortment.

Wal-Mart is returning some health and beauty supplies, cereal, pet treats, soda and laundry detergent, Nicholas said. The retailer said last month its U.S. stores recorded a drop in sales and had a “slight decrease” in customer traffic in the quarter that ended in January.

“Wal-Mart cut too deep and now they're going back to manufacturers,” Michael Kantor, chief executive officer of the Promotion Optimization Institute, said in a telephone interview. The organization trains retailers and producers, including Wal- Mart suppliers, to work together on marketing and merchandising. Kantor is based in New York.

Last year, Wal-Mart reduced the number of merchandise varieties, known as stock keeping units, or SKUs, sold in the U.S. in categories such as laundry detergent and bedding. U.S. stores cut inventories by 7.6 percent while increasing sales by 1.1 percent. Gross margin, or the proportion of sales left after accounting for the cost of goods sold, advanced 73 basis points.

“In some instances, we are returning SKUs to the floor; it is evolutionary and ongoing,” said Linda Blakley, a Wal-Mart spokeswoman, in a telephone interview.

The decision to bring back items isn't tied to store- traffic issues in the fourth quarter, she said.

Nancy Powella, a pastor in Tucker, Georgia, started visiting Wal-Mart less after she couldn't find some merchandise. Since late last year, she's cut back shopping at Wal-Mart to once every two or three weeks, from two or three times a week previously, she said in a telephone interview.

Sales at Wal-Mart's U.S. stores open at least a year declined 1.6 percent in the fourth quarter, more than its forecast of a sales decline of no more than 1 percent. Declining store traffic reflected disruptions caused by store remodeling, Wal-Mart Chief Financial Officer Tom Schoewe said last month.

Eduardo Castro-Wright, vice chairman and U.S. stores chief, is leading efforts to refurbish and reduce clutter in U.S. stores to keep consumers Wal-Mart gained during the recession by offering discounts on groceries and consumer electronics.

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