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Wal-Mart Ramps Up New Stores

CHICAGOWal-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 last week, 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.

“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.

He said Bentonville, Ark.-based Walmart U.S. 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, Simon added, saying that format is now generating the same returns as its supercenters. The format posted comparable-store sales of 4% in the first quarter, he noted.

Wal-Mart currently operates 155 Neighborhood Markets in the U.S. (and another 30 in Puerto Rico under the Amigo banner), but the company's real estate committee has approved 180 new such locations already. It expects to operate as many as 300 Walmart Market stores in fiscal 2013.

Simon added that the company has 15 to 20 of its small-box (15,000 square feet) Walmart Express stores in the development pipeline, including one that opened last week in Richfield, N.C. — its third such store overall, after opening two in rural Arkansas towns in the preceding week.

Sales at the first two Arkansas stores “have been very, very good,” Simon said, although he noted that the greater test would come from the opening of a more urban version of the Walmart Express format next month in Chicago.

“That's going to be spectacular,” Simon predicted.

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