Wal-Mart: Gas Price Drop Helping Store Traffic

Customers are coming in to Wal-Mart's stores more frequently now that gas prices have fallen, the head of its U.S. operation said on Tuesday, and the retailer is cutting prices on food to win sales ahead of the Thanksgiving holiday.

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Eduardo Castro-Wright, speaking at a Morgan Stanley conference that was broadcast over the Internet, said that as gas prices rose this year, shoppers cut down on trips to its rural stores.

But as gas prices fell in October, Wal-Mart saw an increase in traffic to both its rural and urban stores, he said.

While customers are coming into its stores more frequently, they are not necessarily spending less during their visits, a trend that should favor the retailer, he added.

Earlier this month, Wal-Mart reported a nearly 10 percent rise in quarterly profit as shoppers scoured its stores for discounts on food, toiletries and medicine.

To gain market share in what is forecast to be a difficult holiday sales season, Wal-Mart has said it will introduce a new round of price cuts every week until Christmas.

On Tuesday, as part of that strategy, it announced price reductions on food, hoping to draw shoppers into its stores ahead of the Thanksgiving holiday.

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Wal-Mart also said it will give its 1.4 million U.S. employees a 10 percent discount on all food items through Jan 1.

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