Store openings bolster Wal-Mart

Wal-Mart attempted to shrug off ongoing concerns about its sluggish sales yesterday.

Wal-Mart attempted to shrug off ongoing concerns about its sluggish sales yesterday.

Unveiling a leap in fourth-quarter profits, the world's largest retailer said an ambitious programme of store openings and strong international growth boosted net income in the quarter by 16 per cent. The group's annual earnings exceeded $10bn (£5bn) for the first time.

Despite the good news, Lee Scott, the chief executive, said Wal-Mart could have done better, especially on discounting goods during sales. "I am pleased with our results but not satisfied. We would have been better off if we had traded lower markdowns for sales," he said.

Wal-Mart opened 389 stores last year in the US and abroad. Foreign sales, including the UK supermarket chain Asda, proved a key driver of profits in 2004, with revenue at its international operations climbing 17 per cent to $16.8bn. Asda said in a separate announcement it would create 6,000 jobs this year through new stores and revamping existing outlets.

Sales at its US stores continued to disappoint Wall Street, rising 10 per cent to $82bn during the quarter ending 31 January. Critics of Wal-Mart focused on its performance in US stores open at least a year, which rose 1.4 per cent. For the year as a whole, like-for-like US sales rose 3.3 per cent, the smallest rise in more than a decade. The performance was outshone by Target, Wal-Mart's biggest rival and the US's second-biggest discount retailer, which reported yesterday a 5.3 per cent like-for-like increase in 2004.

But Mr Scott remained upbeat about 2005, saying he expected oil prices to stabilise and the US economy to improve. Recovery in the employment market should translate to stronger sales at Wal-Mart, he said.