PHILADELPHIA — Wal-Mart Stores will increase its focus on building supercenters in the Northeast in the near future, with 20 units planned for 2008, including 10 this month.
Shoppers in this part of the country want supercenters, which also provide the best return on investment for shareholders, according to Hank Mullany, senior vice president and president of Wal-Mart's Northeast Division, which encompasses 13 states.
“Currently, in the Northeast about 50% of our stores are supercenters and 50% are discount stores. Nationally, only 17% of the stores are discount stores. Our consumers in the Northeast — and frankly, nationwide — want to be able to go to Wal-Mart and get all of their food needs met. Our strategy is to provide our customers with more and more opportunities to do that,” he said.
Mullany outlined Wal-Mart's strategy in the Northeast as part of a larger presentation here last week at the second annual Food Industry Summit, hosted by the Food Marketing Department of St. Joseph's University.
His talk added regional detail to national plans that Wal-Mart announced recently regarding its expansion, which includes opening 81 new stores and clubs in 30 states in March. The retailer projects opening 170 supercenters in the current fiscal year, ending Jan. 31, 2009, and opening 140 more supercenters in the fiscal year ending Jan. 31, 2010.
Wal-Mart plans to open 22 stores in the Northeast in total this year, including one discount store in New Jersey, one Neighborhood Market in Virginia and the 20 supercenters. This month it is scheduled to open three supercenters in Pennsylvania, three in New York, two in West Virginia, one in Maryland and one in New Hampshire. There are currently 575 stores in the Northeast Division.
Wal-Mart has five divisions across the country, but the Northeast is the only one that has all of the three regional vice presidents located in the field. This decentralized, cross-functional business structure leads to quicker and better decision making for the end customer, according to Mullany.
“The benefit of this structure is to have decision makers closer to end customers, be more responsive to customer trends, and be closer to our associates so we can be more responsive to their needs,” he said. “Our job is to make sure that we provide the shopping experience and the local products that our customers want.
“In the past, people would fly from Bentonville, Ark., to the field to visit stores, fly back and then discuss what they saw in a Saturday morning meeting,” he continued. The structure in the Northeast “has led to faster and better decision making and is absolutely the right strategy. You'll see that continue throughout other divisions.”