Wal-Mart: Friday Was Year's Top Shopping Day

CHICAGO – Wal-Mart Stores Inc. (WMT) recorded its biggest shopping day of the year Friday, not Saturday as it had expected, the vice chairman of the world's largest retailer said Tuesday.

John Menzer, who heads Wal-Mart's U.S. division, said more people than expected took Friday off from work and headed to stores to pick up last-minute gifts.

Demand for gift cards was particularly strong, and stores raced to display new merchandise by Monday morning to take advantage of customers redeeming those cards.

"We were expecting to have huge gift card sales," he said in a telephone interview. "It has even exceeded our expectations."

That bodes well for after-Christmas sales because retailers record revenues when gift cards are redeemed, not when they are sold. Wal-Mart has said that strong gift card demand will probably shift some demand into January from December.

The increasing popularity of gift cards has put even more pressure on the retailer to get fresh merchandise into stores quickly to tempt shoppers with higher-margin goods instead of clearance items that generate smaller profits.

"We literally have to reset and transition our stores immediately, the morning after Christmas," he said. "Before, you'd spend a couple of days to clear out seasonal (merchandise) and reset."

Menzer said customers appeared to be using the cards to buy newer merchandise rather than clearance items, and were "buying themselves the gift they didn't get."

Wal-Mart got off to a strong start this holiday season, launching its earliest-ever advertising campaign and aggressively lowering prices to lure consumers.

The strategy seemed to pay off as the retailer reported strong November sales and huge crowds over Thanksgiving weekend.

Wal-Mart will not release its December sales until next week, but has said it is on track to meet its forecast.

Still, Menzer said he was "nervous all the way until we closed at 6 o'clock on Saturday" as shoppers waited until the last minute to pick up gifts.

Wal-Mart has reported strong demand for electronics and apparel, but Menzer said the surprise hit of the season was a rocking video game chair. Perfume gift sets were a big last-minute item as well, he said.

Analysts said Wal-Mart was clearly among the winners this holiday season, having learned its lesson last year when it was slow to mark down prices and early sales results proved disappointing.

Wall Street will be watching for a sales update from Target Corp. (TGT) later Tuesday to see whether Wal-Mart's success came at the expense of its biggest rival.

Mall-based specialty retailers have also felt the pinch as Wal-Mart stepped up its advertising and discounts.

Most major retailers will release December sales results Jan. 5.