Wal-Mart Plans to Reduce Space for Electronics in Stores

Wal-Mart Stores Inc. (WMT), the world's biggest retailer, plans to cut back on space for electronics as sales in that category have declined, contributing to the company's two-year U.S. sales slump. The company, which is based in Bentonville, Arkansas, will reduce the floor space devoted to items like flat-screen televisions and give some of that space to apparel, according to Rosalind Brewer, who runs the Wal-Mart East division. Brewer spoke at a retail conference in Atlanta today. The reduction is a reversal of Wal-Mart's 2009 move to allocate 21 percent more floor space to entertainment gadgets and comes after electronics contributed to a 1.8 percent decline in sales at U.S. stores open at least a year in the fourth quarter, its seventh consecutive drop. "It's something Wal-Mart has needed to do for a year," said Craig Johnson, president of Customer Growth Partners, a New Canaan, Connecticut-based consulting firm, in an interview. "You don't need as much space in that area with products shrinking and purchases going online, and electronics has narrow profit margins. Floor space is a scarce commodity."

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