Wal-Mart Q3 Profits Up

The world’s largest retail business Wal-Mart has today announced strong improvements in performance over the last quarter to the end of October despite threats to profit margins arising indirectly from the slowdown in the US housing market and the sub-prime mortgage sector crash.

The supermarket giant which also owns UK retail chain ASDA today announced net earnings over the period of $2.9 billion, up by over 8% since the same period last year, despite pressures on consumer spending as a result of the credit crunch and inflated interest rates leading to increased outgoings for the average US household.

The company has slashed prices across its major US outlets in order to attract retail customers in light of a tightening economic environment, which appears on the face of it to have been successful in boosting performance over the period.

The US retail industry has fallen on hard times in recent months as a result of falls in consumer spending derived from the sub-prime sector collapse and the significant slowdown in housing markets.

With interest rates increasing the cost of variable mortgage repayments and credit providers adopting a more hostile approach to lending, consumers have been more reluctant to spend on items outwith the essential consumer goods, which has had a natural adverse effect on the US retail industry.

The news comes in the wake of more rocky results from other major retailers, including Home Depot which reported a 27% fall in net profits over the period, again directly attributed to the fallout from the sub-prime mortgage sector.

Speaking today on the results, Wal-Mart chief executive Lee Scott said that the company’s policy of realigning its pricing strategy was the key to success in retaining its market share and sustainable sales growth over the period.

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