Wal-Mart weary despite record profits

Asda owner Wal-Mart today posted record first-half profits but warned higher fuel prices were taking their toll on customers.

The American retail giant said net sales rose 9.8% to $147.7bn (€119.9bn) in the six months to July 31, while net profits lifted 9.3% to $5.3bn (€4.3bn).

President and chief executive Lee Scott said results were “disappointing” earlier in the group’s second quarter, but July was stronger than expected.

He said: “Wal-Mart stores did miss their plan as our customer continues to be impacted by higher gas prices and it is difficult to improve our expense leverage in the current environment.”

His comments follow sharp rises in oil prices in recent months, with the cost of a barrel of crude oil hitting a new record above the $67 mark last week.

Wal-Mart gave no breakdown of Asda’s performance, but said its international operations increased operating profits by 8.1% in the first half.

The company also has operations in Argentina, Brazil, Canada, China, Germany, Japan, Mexico, Puerto Rico and South Korea.

Asda – the UK’s second biggest grocer – recently unveiled a radical shake-up that cost hundreds of management posts, allowing it to invest in more than 2,000 shop floor jobs.