CHICAGO — Wal-Mart Stores is shifting resources it devoted to remodels back into its new-store pipeline, saying a slowdown in new-store builds in recent years has contributed in part to its declining same-store sales.
In a presentation here Wednesday, Bill Simon, president and chief executive officer of Walmart U.S., said moderated supercenter growth since 2007 has negatively affected comp sales since those stores tend to perform best in their second, third and fourth years.
The company, since fiscal 2007, reduced new square footage growth from around 8% to 1.5% last year as it focused more on remodels. However, Simon said Wal-Mart would look to open as many as 200 new stores next year — its most since building 277 in fiscal 2007 and up from 135 in 2010 and a projected 152 this year.
Plans call for 90 to 100 Walmart Markets, the retooled traditional Neighborhood Market supermarket, he added, saying that format is now generating the same returns as its supercenters.
Wal-Mart, Bentonville, Ark., currently operates 155 Neighborhood Markets but the company's real estate committee has approved 180 new such locations already. It expects to operate as many as 300 Market stores in fiscal 2013.
"As we started to shift capital out of new stores and into pretty expensive remodels of the fleet, we declined the new store openings down to 135 units. And that had an adverse impact on comp sales," Simon said.
Simon added the company had 15 to 20 of its small-box Walmart Express stores in the development pipeline, including one that opened Wednesday in Richfield, N.C.