Wal-Mart has become a born again cost-cutter. And the timing of its return to the retail religion it helped to create looks lucky. After stumbling around for several quarters in an attempt to lure higher-paying customers, it has rededicated itself to keeping inventories tight and costs in the cellar. With the economy under pressure, Wal-Mart has moved to catch consumers who trade down to cheaper products if conditions worsen.

Wal-Mart’s stock jumped 6 per cent after it beat expectations with a third -quarter profit of $2.86bn on $92bn of revenues. A range of US retailers is struggling to shrink inventories after months of slow sales. But after overshooting in the past two quarters, Wal-Mart again hit its target of building inventory at less than half its rate of sales growth. Overhead costs stayed flat as it raised its gross margin slightly to 23.8 per cent.