Walmart Accelerates Opening of Smaller Format Stores

Walmart CFO sees an opportunity for “hundreds, if not thousands” of Express and Neighborhood Market stores.

March 13, 2014

NEW YORK – Speaking at the Bank of America Merrill Lynch Consumer and Retail Conference here earlier this week, Charles Holley, CFO of Walmart, said while the company’s Express format is still in pilot phase, Walmart will open up to 120 new stores this year, Supermarket News reports.

Walmart currently operates just 20 Express format stores, so the expansion plan is an aggressive one for the retailer.

"We like the sales of the Express stores a lot, but we’re still figuring out the P&L part of it, and we don’t have enough [locations] out there to figure out the expense part and how to make it work to feel comfortable saying it’s not a pilot anymore. We want to get more mass, to cluster them and to get the most efficient supply chain we can,” he said.

Holley also said Walmart will open up to 180 new Neighborhood Markets for the current fiscal year. “The sales per square foot are as good as any top food retailer in the U.S., and the returns are extremely good, with the new ones as good as new supercenters,” he noted.

“The convenience factor for Express stores and Neighborhood Markets is extremely important. I would think there could be [opportunities for] hundreds, if not thousands, of these formats,” Holley said. “Something like 11,000 new small stores have been added in the U.S. in the last three years, which is one reason we’ve decided it’s time to go ahead and increase these Neighborhood Markets and Expresses. We think they will be very powerful vehicles for a customer experience with convenience.”

Holley also commented on Walmart’s digital growth, noting the retailer is “committed to winning at the intersection of digital and physical. It’s a long-term proposition, but we believe it’s extremely important for our customer, and combining and merging these two will create a huge competitive advantage.

“And I would expect us to continue to make acquisitions, even small ones, that would help enable our e-commerce efforts to add additional sales,” he said.

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