Walmart is going small. Mostly.
In addition to releasing its fourth-quarter results (more about that in a bit), the company announced that it was doubling the number of openings of its smaller format stores this year. The company now plans to add approximately 270 to 300 small stores, which comprise its Neighborhood Markets and Walmart Express formats, up from 120 to 150 predicted just in October.
"Customers' needs and expectations are changing. They want to shop when they want and how they want, and we are transforming our business to meet their expectations," said Bill Simon, Walmart U.S. president and CEO, in the press release. "Customers appreciate the broad assortment of our supercenters for their stock-up trips as well as our small store formats for fill-in trips. By unlocking this growth opportunity and further combining our supercenters and small store formats with an unlimited selection available through ecommerce, we provide our customers with anytime, anywhere access to our brand."
That's a substantial increase over the 105 Neighborhood Markets opened last year. Unlike its supercenter siblings, the Neighborhood Markets are posting comp-store sales increases, of 4 percent for fiscal year 2014. Walmart currently operates 346 Neighborhood Markets and 20 Walmart Express stores.
Overall, the company reported, fourth quarter comp sales dropped 0.4 percent for the 14-week fourth quarter, while Neighborhood Market comps rose 5.0 percent (without fuel). Simon cited the weather (which closed 200 stores at various times, though why shoppers didn't stock up before or after storms wasn't addressed), a shortened holiday season, and reduced government benefits for the drop.
And expect the smaller formats to grow outside the United States, as well.
"Small formats represent a great growth opportunity for us in many of our markets, including the U.S., Mexico and the U.K.," said CFO Charles Holley at its fourth quarter call.
That's not to say that the company is abandoning supercenters, signing a lease for a new freestanding unit at Swansea (MA) Mall to replace an in-line unit. And Sam's Club will open between 17 and 22 clubs in the United States this year, up from the 12 opened in 2014.
And interestingly, the company made a point of saying this new expansion "exclude[s] the impact of future acquisitions." And the company acknowledged that strategic acquisitions are the second priority for capital expenditures. Hello, Family Dollar, Dollar Tree or Dollar General, as some analysts are proposing?
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
