Walmart dropped a bomb earlier this year when the company announced that it is closing all of its 102 Walmart Express stores. The Walmart Express concept, which was much smaller than the retailer's traditional stores, averaging about 12,000 square feet, was intended to compete with convenience, drug and dollar stores that have edged more and more into the grocery business over the last decade.
Critics say the concept, launched in 2014, didn't work largely because Walmart placed the Express concept in rural areas, mainly in the South and Midwest, in close proximity to its existing Supercenters. The problem is, those areas are where convenience and dollar stores generally perform the strongest. Some argue that the plan would have worked better if Walmart had placed the Express units in urban areas, where it does not yet have a very dominant foothold, and would cater to an audience of many underserved customers.
Walmart is also closing a handful of Supercenters and Neighborhood Markets, its grocery concept. But the good news for landlords is that, despite the doors that are shutting, several are on schedule to open this year. The world's largest retailer reportedly has 50 to 60 new Supercenters on tap, as well as 85 to 95 Neighborhood Markets.
Meanwhile, Walmart will start opening, developing and operating its own gas stations at its stores. Murphy USA had been the operator of gas stations at several locations (and will continue to run the pumps at the ones it currently oversees), but going forward, Walmart is making a push to build more gas stations at Supercenters and Sam's Clubs across the country.
This is favorable for the shopping-center and net-lease owners of nearby buildings because Walmart will likely garner more traffic at its gas locations, where the retail giant will probably be able to negotiate favorable fuel-distribution deals. This will translate to lower prices at the pump, bringing more consumers not only to Walmart, but also to centers and pads surrounding its stores.
Despite lower fourth quarter earnings and sales from the previous year, analysts are bullish on Walmart now, and many think the company is undervalued.
Even though Walmart's store-closings announcements initially had a lot of real estate owners pretty concerned, it's not all bad news.
So far, there have been a lot of 2016 store closings announced by big names, such as Macy's and Office Depot/OfficeMax. Though Walmart is among that group, it's refreshing to see that the retailer's future plans could make up for some of that vacant space.
Walmart dropped a bomb earlier this year when the company announced that it is closing all of its 102 Walmart Express stores. The Walmart Express concept, which was much smaller than the retailer's traditional stores, averaging about 12,000 square feet, was intended to compete with convenience, drug and dollar stores that have edged more and more into the grocery business over the last decade.
Critics say the concept, launched in 2014, didn't work largely because Walmart placed the Express concept in rural areas, mainly in the South and Midwest, in close proximity to its existing Supercenters. The problem is, those areas are where convenience and dollar stores generally perform the strongest. Some argue that the plan would have worked better if Walmart had placed the Express units in urban areas, where it does not yet have a very dominant foothold, and would cater to an audience of many underserved customers.
Walmart is also closing a handful of Supercenters and Neighborhood Markets, its grocery concept. But the good news for landlords is that, despite the doors that are shutting, several are on schedule to open this year. The world's largest retailer reportedly has 50 to 60 new Supercenters on tap, as well as 85 to 95 Neighborhood Markets.
Meanwhile, Walmart will start opening, developing and operating its own gas stations at its stores. Murphy USA had been the operator of gas stations at several locations (and will continue to run the pumps at the ones it currently oversees), but going forward, Walmart is making a push to build more gas stations at Supercenters and Sam's Clubs across the country.
This is favorable for the shopping-center and net-lease owners of nearby buildings because Walmart will likely garner more traffic at its gas locations, where the retail giant will probably be able to negotiate favorable fuel-distribution deals. This will translate to lower prices at the pump, bringing more consumers not only to Walmart, but also to centers and pads surrounding its stores.
Despite lower fourth quarter earnings and sales from the previous year, analysts are bullish on Walmart now, and many think the company is undervalued.
Even though Walmart's store-closings announcements initially had a lot of real estate owners pretty concerned, it's not all bad news.
So far, there have been a lot of 2016 store closings announced by big names, such as Macy's and
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Jonathan Hipp
Jonathan Hipp began his career in real estate over 25 years ago. In his early years as a broker, he ventured into the net lease industry and quickly began leading the US net lease market, closing over $3 billion in transactions. In 2005, Jon founded Calkain Companies, a company focused solely on net lease investment services. As President and CEO, he has been instrumental in building the firm into one of the leading Net Lease real estate companies, transacting over $12 billion of net lease deal volume over the past 13 years. He has expanded Calkain’s services to include brokerage, advisory, asset management, capital markets, and industry research. He has become a well-known resource, panelist, and speaker at various Net Lease and Industry conferences and is a regular contributor to GlobeSt.com on real estate trends. In June 2015, Jon’s passion for the real estate business was again recognized as he was nominated for the Top Real Estate Player in the DC area by SmartCEO magazine.
