Wal-Mart's annual shareholders' meeting on Friday could offer clues as to how Doug McMillon, who became Wal-Mart's CEO in February, plans to deal with the biggest issues Wal-Mart faces:
In an interview with The Associated Press, Bill Simon, CEO and president of Wal-Mart's U.S. stores division, says the top concerns among its shoppers are lack of jobs and gas prices.
Wal-Mart's customers also still are struggling with a 2 percentage point increase in the Social Security payroll tax since Jan. 1, 2013. Additionally, they're facing reductions in government food stamp benefits.
As a result, Wal-Mart's customers have changed their shopping habits. They're switching to chicken from beef, and choosing lower-price brands or store labels on staples like detergent. But they do splurge for special holidays.
"It's been very choppy as to how they choose to spend," Simon says.
To combat this, Wal-Mart stocks up on small packages at the end of the month when money is tight for customers. It's also counting on a new money transfer service it says will cut fees for its low-income customers by up to 50 percent compared with similar services elsewhere.
But America's Research Group's C. Britt Beemer asks: "How do you get more money from shoppers whose disposable income is less?"
Since the economic recovery, more stores are offering low prices, which has always been a centerpiece of Wal-Mart's success. As a result, Wal-Mart has had to focus more on cutting its prices.
The move seems to be working. According to a Kantar Retail pricing survey conducted last October in the southern New Hampshire and northern Massachusetts area, Dollar General's basket of 21 categories across staples was 12 cents cheaper at $28.70 than at Wal-Mart. In the previous year, Dollar General was 18 percent cheaper.
And in a separate study conducted a year ago, Amazon's prices on a basket of 59 items was actually 7 percent more expensive than Walmart.com and 16 percent pricier than at its supercenters.
Analysts also praise Wal-Mart's Savings Catcher, an online tool that allows customers to compare Wal-Mart's prices on thousands of products with those of some competitors. If a lower price is found elsewhere, Wal-Mart refunds the difference in the form of a store credit. Wal-Mart plans to expand the tool nationwide after having tested it in seven markets since March.
Still, low prices hurt sales and margins. For the latest quarter that ended on May 2, for instance, sales at Wal-Mart's U.S. stores that were open at least a year fell 0.1 percent.