Wal-Mart Stores Inc on Tuesday named Bill Simon to run its U.S. discount stores, which have struggled with sluggish sales as their core customer continues to be pressured by high unemployment.

The move allows Eduardo Castro-Wright, who had headed the U.S. unit, to move to California and be with his wife, who is recovering from a heart transplant, Castro-Wright said in a memo to employees.

Castro-Wright, 55, will continue as vice chairman of the world's largest retailer and as head of the company's global e-commerce initiatives and global sourcing, two key areas for the company as it looks online and overseas for growth.

Simon, 50, had been chief operating officer of Walmart U.S. He takes over a business that has seen sales at stores open at least a year fall in each of the last four quarters.

That business has been hurt both by the economy and by Wal-Mart's own missteps, including a move to pare the number of items carried in Walmart stores. That cost the company sales as shoppers who could not find their favorite items, even if they were not big sellers, did all their shopping elsewhere, Wal-Mart has said. The company has been restoring some items and has announced price cuts on thousands of items in a bid to boost U.S. traffic.

They have lacked direction recently in the U.S. stores and we hope that Bill brings clarity to U.S. strategy, Janney Montgomery Scott retail analyst David Strasser said. They have upgraded stores, instituted aggressive rollbacks but still are struggling for traffic. We think some of the weakness is (due to the economy), but a cohesive strategy would help give the customer a consistent message.

Analysts do not expect much change at the company's more than 3,700 U.S. discount stores, at least early on, as Simon on Tuesday stressed the need to build traffic and make sure the stores had the right product assortment, initiatives that were already under way.

It's still all about them managing expenses and trying to leverage expenses and that's all about getting the topline (sales) going again, Edward Jones analyst Matt Arnold said.

But some also noted that Simon has already had an impact on the business as chief operating officer.

Simon has worked to improve the overall shopping experience, leading to faster service, a friendlier shopping environment and cleaner stores, Bernstein analyst Colin McGranahan, said. We view him as capable of stepping into the role quickly while bringing his own strategic imprint.

Simon came to Walmart from restaurant chain operator Brinker International Inc , where he was senior vice president for global business development. He also served as secretary of the Florida Department of Management Services, appointed by then-Governor Jeb Bush.

Walmart shares were down 1.7 percent at $48.73 in trading on the New York Stock Exchange.

(Reporting by Brad Dorfman, editing by Gerald E. McCormick, Dave Zimmerman, Phil Berlowitz)

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