Wal-Mart is slowing its expansion by slashing its budget for new store openings.

The US retail giant, which owns Asda in the UK, said that its capital expenditure for the next financial year starting in February would increase by 2 to 4% - much less than the 15 to 20% forecast for the year to January 2007.

John Menzer, vice-chairman of Wal-Mart, said: “We are still very committed to growth, but our real estate projects are now being subjected to a more rigorous prioritisation process. It will enable the company to drive higher returns by focusing on locations that make the most efficient use of capital.”

He added that Wal-Mart expected to open 600 new stores in the US and internationally.

Although no specific plans were outlined for the UK, Menzer added that from February next year, it planned to open 320-330 stores internationally, covering a wide variety of units, from large hypermarkets to smaller retail locations.

“Our long-term goal is to continue to have our capital expenditures grow at a rate equal to or less than sales growth,” Menzer said.