If Wal-Mart is right, Americans will be inundated with undergarments this holiday season.
The new president and CEO of the world's largest retailer's U.S. business says prices and practical thinking will drive shoppers as they look for gifts. And he plans to be prepared.
"Our customers remain challenged," the executive, Bill Simon, said Wednesday at a Goldman Sachs retail industry conference. "So for all you adults, you should plan for socks and underwear."
For children, the chain is focusing on hot toys and electronics, he said.
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Simon aims to reverse five straight quarters of declining revenue at stores open at least a year.
It could be an especially challenging holiday season, given that Wal-Mart shoppers facing tight budgets delayed their back-to-school purchases even longer than last year — many waiting to spend until after school started, Simon told analysts in the webcast address.
"We expect a very, very competitive and aggressive Christmas and holiday selling season," he added.
Wal-Mart benefited during the recession as more affluent shoppers traded down to cheaper stores. But stubbornly high unemployment and tight credit are still squeezing its main U.S. customers, lower-income workers who are having even more trouble stretching their dollars.
But the discounter's own merchandising gaffes have contributed to the revenue figure's decline.
Simon, who was appointed in June, has accelerated Wal-Mart's effort to restore items it cut last year, and he's leading a move away from steep rollbacks after they failed to excite frugal shoppers last spring. He told analysts he has been spending time with suppliers and Wal-Mart board members to "understand where we can be better."
And then there are the underwear and socks.
"We are moving forward building on what worked," Simon said.
But he told analysts it will take a while to fix merchandise assortments.
"We are in the process of reviewing billions of items," said Simon, noting that even recent remodels that reflected the lean inventory strategy must be rethought.
Wal-Mart will offer a capital spending plan at its annual analysts' meeting next month.