Wal-Mart Plans Faster Growth of Neighborhood Stores

Wal-Mart Plans Faster Growth of Neighborhood Stores

BENTONVILLE, Ark. — After opening 120 Neighborhood Market stores this year, Wal-Mart Stores [4] said last week it plans to open at least that many of the supermarket-sized stores again next year.

“We will accelerate growth of our Neighborhood Markets because of their strong returns, consistent comp-sales performance and double-digit net sales increases, and we will continue to build and leverage the supercenter format, which remains our primary format for growth,” said Bill Simon [5], president and chief executive officer of Walmart U.S.

Walmart U.S. CEO Bill Simon
Bill Simon [5]

The company said it plans to open between 120 to 150 Neighborhood Markets next year — fiscal 2015 — along with about 115 supercenters, down from 125 this year.

“The combination of our large- and small-store formats allows us to strengthen our market-share position and give customers convenient access to shop for food and general merchandise, as well as [have] access to our e-commerce offerings,” Simon said.

“We believe our multi-format portfolio will fuel the next generation of retail; enable the convergence of digital and physical store locations through e-commerce; and unlock value, giving our customers anytime, anywhere access to Wal-Mart.”

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The company said it plans to reduce capital spending in fiscal 2015 by approximately $200 million, to a range between $11.8 billion and $12.8 billion, compared with expectations of spending between $12 billion and $13 billion for the current fiscal year.

Wal-Mart CEO Mike Duke
Mike Duke [7]

“We’re spending in a disciplined manner by setting up a more streamlined real-estate process,” Mike Duke, president and CEO, Wal-Mart Stores, told an investors conference. “As we continue to improve our sales per square foot, Wal-Mart will continue to grow through new stores and e-commerce while expanding our logistics and fulfillment network in critical markets.”

Capital spending in the U.S. will fall in a range of $6 billion to $6.5 billion this year, up $500 million over the company’s originally projected forecast due to an acceleration of small-format openings and e-commerce initiatives.

Read more: Kroger, Wal-Mart Named 'Investment Heroes' [8]

Simon also said the company was “pleased” with its Walmart Express format, a convenience-store sized retail operation.

He said he envisions the small-format stores being part of the company’s site-to-store e-commerce system in which customers could order products from a supercenter via their phone or online, and have them shipped to their nearest Walmart Express for pickup on the way home from work, for example.

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