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Monday, 30 September, 2002, 14:59 GMT 15:59 UK
Wal-Mart cuts sales forecast
Inside a Wal-Mart store
Wal-Mart says its earlier sales predictions were "too optimistic".
The world's biggest retailer, Wal-Mart, has compounded fears of a dip in consumer spending by cutting its sales forecast for the second month in a row.

The US group said its previous expectations for September sales growth had been "too optimistic" following the slump in business after September 11.

Wal-Mart's subdued outlook came as the US Commerce Department reported lower-than-hoped consumer spending figures for August.

Analysts said the figures showed investors continued to be wary of a recovery, preferring to save rather than spend.

Stock market hits back

Wal-Mart runs over 3,000 stores in the US as well as the Asda supermarket chain in the UK.

The retailer cut its expected sales growth for September from between 4-6% at the start of the month, to between 3-4%.


I see no reason for the market to turn around

James Volk, DA Davidson

The poor outlook was echoed by other retailers, including Federated Stores which said it expected flat sales in September against previous expectations of between 3% and 5%.

The news sent Wal-Mart shares down by $1.73 to $49.51, a fall of 3.3%.

Saving not spending

The cut in sales forecasts came as US data showed consumer spending had fallen to 0.3% in August, compared with 1% in July.

At the same time, the US Commerce Department said personal incomes grew by 0.4% in August, while saving was up from 3.5% in July to 3.6%.

Analysts said the spending figures were below expectations and highlighted investors cautiousness over the future.

"I see no reason for the market to turn around," said James Volk, managing director of institutional trading at DA Davidson.

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