Bill Simon, Wal-Mart's president and CEO of its U.S. operations, said on Wednesday that the world's largest retailer plans to have 500 of the smaller stores open within the next 18 months, up from a current 290. Simon spoke at a luncheon presentation at the Goldman Sachs Annual Global Retailing Conference.
In an effort to reach more customers in urban settings and geographies that can't support a traditional "Supercenter", the Bentonville, Ark.-based company is focusing on two small-store concepts: its "Neighborhood Market" and "Walmart Express," that are meant to compete directly with grocery stores, discount/dollar stores and drug stores.
Wal-Mart's Neighborhood Market stores are sized on average at 38,000 square feet, considerably smaller than its traditional "Supercenter," which average around 182,000 square feet. The number of Wal-Mart U.S. stores, including "Supercenters," Sam's Clubs and others total 4,713, according to the company's web site. (Including international stores, the number of stores climbs to 10,955.)Additionally, "Walmart Express," its smallest concept with store sizes, on average, around 15,000 square feet, has 19 units. Simon says the pilot phase for Walmart Express is "performing very well" with double-digit comparable sales. However, as Wal-Mart builds more small stores, it's learning that large-store efficiency isn't necessarily compatible with a small store. Simon said the returns from its "Neighborhood Market" stores are approaching 'Supercenter' returns, however he acknowledged the company had to refine its business model for the smaller stores to create operating efficiency. That included smaller assortments, changes to delivery frequency, even changes to its point-of-sale system and adding a district supervisor specifically for the smaller stores, among other things, he noted. We're "learning a lot about servicing and constructing
Follow TheStreet on Twitter and become a fan on Facebook.