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Wal-Mart U.S. Focusing on Smaller Stores, Online

Focus is expected to lead the retailer to see flat square footage growth.

Bill Simon, president and chief executive officer of Wal-Mart Stores Inc.’s U.S. division — the epitome of the big-box retail chain — was out touting the virtues of the retailer’s smaller stores and its Web business Tuesday.

And that focus is expected to lead Wal-Mart U.S. to flat square footage growth.

“What we’re trying to do is to do more with less,” Simon told investors at the 34th annual Raymond James Institutional Investors Conference in Orlando, Fla. “We’re trying to become more efficient in the use of capital. So the square footage will roughly stay the same, but you’ll see more doors open, because we’re going to be opening smaller stores instead of Supercenters.”

It’s not that Wal-Mart is hurting for growth. The U.S. unit added $10 billion in sales last year for a total take of $275 billion, with a comparable-store sales increase of 1.8 percent.

But the Supercenter, the giant store that’s propelled the company’s growth in recent years, will over time become a smaller part of the mix.

About 90 percent of the company’s 4,000-plus U.S. stores are Supercenters.

The retailer plans to add about 125 Supercenters this year, but also as many as 115 small formats stores with square footage of below 60,000 square feet.

Simon said the smaller stores are endowed with “dot-com capabilities” allowing shoppers, for instance, to pick up online orders in certain cases.

The company sees the give-and-take between its online business and its brick-and-mortar presence as an advantage.

“We’re able to stay in stock and in business through walmart.com, really all the way up ’til Christmas Eve, when most traditional e-commerce players are out of business because of the shipping deadlines,” Simon said. “Because of the 4,000 stores, we can fulfill the orders from our business on the ground, either through a ship, a fulfillment from store or a pick-up-in-store opportunity that others might not be able to do.”

On Black Friday, the company’s stores sold about 600,000 32-inch TVs for $148 in about an hour. An additional 100,000 TVs were sold and later fulfilled through walmart.com.

And even though Wall Street hit a new high Tuesday, shoppers are still feeling the pinch of the economy and looking for the value that Wal-Mart sees as its bread and butter.

“The customer continues to be pressured by jobs,” Simon said. “Jobs, jobs, jobs. Unemployment insecurity they tell us is top of mind.”