Wal-Mart Expects 0.1% Decline In Same-Store Sales for November By KRIS HUDSON November 26, 2006 12:32 a.m. DALLAS -- Wal-Mart Stores Inc. reported a decline in same-store sales of 0.1% for November, which covers the four-week period ending at the close of business Friday, slightly below its prediction for the month of "flat" sales amounting to no gain from those of November 2005. Wal-Mart's paltry showing for November represents only the second time in 27 years that the retailer has posted a decline in monthly same-store sales. The first was a relatively unavoidable anomaly in April 1996, when Easter fell in a different month than in the previous year and spurred a 0.6% decline for Wal-Mart. Same-store sales, or sales at stores open for at least a year, are a key measure indicating a retailer's ability to generate profitable growth. The November result is the latest of several anemic monthly sales tallies for Wal-Mart, including a 0.5% gain last month when the retailer initially expected growth of 2% to 4%. Wal-Mart, Bentonville, Ark., has struggled as its effort this year to broaden its appeal to more affluent, trendy shoppers by remodeling its stores, improving its fashion apparel and offering big-ticket consumer electronics has sputtered in its early stages. As well, Wal-Mart, with nearly 4,000 U.S. stores and $312 billion in sales last year, has reached such unprecedented size that big percentage gains are more difficult to achieve. Wal-Mart's November decline also indicates that one of the Wal-Mart U.S. divisions that contributes to the overall figure – either the 3,200 supercenters, discount stores and Neighborhood Markets under its Wal-Mart U.S. division or its smaller, more volatile Sam's Club membership-warehouse – posted a decline in same-store sales for November. While Sam's Club has done so many times over the years, the larger Wal-Mart U.S. division has not posted a sales loss since Wal-Mart began reporting the figures in 1979. J.P. Morgan Securities analyst Charles Grom noted that Wal-Mart's latest difficulty is all the more puzzling considering that the retailer has launched a ballyhooed program offering certain generic drugs for as low as $4 per prescription in 38 states. "While the [November] result came more or less inline with expectations, we continue to scratch our heads as to why the results are not improving provided the precipitous drop in energy prices and stable consumer confidence levels," Mr. Grom wrote in an email on Saturday. Contrasting the lack of sales growth with the onset of the $4-prescription program, "we are beginning to question the success … of this initiative," he wrote. Wal-Mart will divulge its results for each of its divisions on Thursday, when most publicly traded U.S. retailers announce their monthly sales results. Increasingly, analysts maintain that Wal-Mart's results are no longer indicative of retailers' performance as a whole. For example, Retail Metrics LLC, a retail-analysis firm in Swampscott, Mass., predicts the 56 U.S. retailers it tracks will post an average gain of 2.8% for November. Factoring out Wal-Mart, the average jumps to 4.9%. Among those anticipated to outpace Wal-Mart this month is archrival Target Corp., of Minneapolis. Target predicts posting a gain of 4% to 7%. Even more troubling for Wal-Mart, the anticipated 0.1% sales decline came in a month in which the retailer traditionally posts strong sales with doorbuster specials and rollbacks – or permanent price reductions – in the buildup for the holiday shopping season. This year, as Wal-Mart stumbled in its early efforts to broaden its appeal, it opted in recent weeks to return to its roots by trumpeting hundreds of rollbacks in toys, electronics and home appliances. However, some analysts say the rollback announcements represent an increase in publicity rather than quantity. "The company has stated that they plan to have the same number of rollbacks as they did holiday 2005," Citigroup analyst Deborah Weinswig wrote in a Nov. 14 research note distributed to her firm's clients. "But they plan to communicate them better as evidenced by the numerous press releases on the rollback program this holiday season." Many Wal-Mart stores drew large crowds on the morning after Thanksgiving with doorbuster specials such as a 42-inch Viore plasma high-definition television for $988, a JVC digital camcorder for $199 and a 24-inch Bratz doll for $20. The day after Thanksgiving is often known as Black Friday for its historical significance as the day when many retailers turned a profit -- or "went into the black." In the Dallas suburb of Cedar Hill, Texas, shoppers began lining up at 7 p.m. Thursday night inside the 24-hour Wal-Mart in anticipation of claiming one of the flat-panel TVs among the retailer's doorbuster specials. When Wal-Mart unveiled its doorbuster fare at 5 a.m. Friday, the Cedar Hill store's toy department was a bustle of activity, with parents stacking carts full of $20 remote-control Humvees and the 24-inch Bratz dolls. The scene was even more hectic in the electronics department, which was impassable due to a logjam of shopping carts and agitated bargain hunters. Among the quarry they sought: a $190 Kodak digital camera and photo printer as well as a $248 20-inch LCD television. Victoria Massey, a 60-year-old "semiretired" travel-agency owner, left the Cedar Hill store at 5:30 a.m. with two 20-inch televisions priced at $69 each and two crock-pot cookers at $19 each. An avid Black Friday shopper, she arrived at the store much earlier in the morning angling for a $500 flat-panel TV, but the supply was exhausted before her turn came. The question for Wal-Mart is how many of its customers are similar to Ms. Massey, who despite her Black Friday zeal does not anticipate spending more on Christmas gifts than she did last year due to the relatively fixed income she shares with her retired husband. "I'll probably spend the same" as last year, she said. Complicating matters for Wal-Mart on Friday was a failure of its walmart.com Web site. Wal-Mart compensated by extending the doorbuster deals on its site beyond the previous 11 a.m. deadline to midnight. Other sites such as Amazon.com suffered similar troubles due to heavy patronage. "Due to a higher than anticipated traffic surge, Walmart.com experienced an issue with site availability early [Friday] morning," spokeswoman Amy Colella said. "We apologize for any inconvenience this may have caused our customers, and have since resolved the matter to ensure a positive shopping experience."