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By Nicole Maestri
NEW YORK, Jan 12 (Reuters) - The chief executive of Wal-Mart Stores Inc said on Monday that he expects the U.S. economy to remain extraordinarily challenging in the first half of the year and he was not expecting a quick turnaround.
Lee Scott made the comments at the National Retail Federation's annual conference being held in New York. He described it as his last public speech as the head of the world's largest retailer before retiring on Feb. 1.
Scott said the U.S. government's efforts to stimulate the economy should have "some impact," but he added: "I don't see anything that tells me it's going to turn around quickly."
"The second half of the year, you would hope, would be better," he said. "We all hope by next Christmas it certainly isn't any worse."
Wal-Mart, the discount giant, has been gaining market share in the past year as consumers seek out its low prices on items such as food and medicine to stretch limited budgets.
But a year-long recession, mounting job losses and tighter access to credit combined to produce the worst holiday sales season in nearly four decades, according to the International Council of Shopping Centers.
Wal-Mart was not immune to the harsh climate and last week posted lower-than-expected December sales and cut its fourth-quarter profit forecast.
Scott said this downturn may fundamentally change people's spending habits.
"I'm not necessarily convinced that just when all this liquidity and things hit, if you're going to have the same immediate desire to go back to consumption and debt," he said, referring to a potential U.S. government stimulus plan.
"There are a lot of young people who have learned what it's like when you are living on the edge and the bad times come."
Consumers may not be as inclined to splurge or accumulate debt after having lived through such a difficult economic period, he said.
Wal-Mart shares rose 25 cents to $51.85 in morning trading, outperforming a 1 percent decline for the Standard & Poor's Retail Index. (Editing by Maureen Bavdek)