Walmart Scales Back Small-Format Store Plans
BENTONVILLE, Ark. — As other retail channels continue to downsize their store formats, Walmart has revealed plans to pull back on new store growth, instead choosing to ramp up its e-commerce platform.
According to Walmart's projected capital expenditures and unit growth for the next few years, the retailer's total unit growth for small-format stores — a mix of new, expanded and relocated units — will be 161 in fiscal year 2016, a projected 70 in fiscal year 2017 and a projected 20 in fiscal year 2018.
Walmart is also slated to dial back its superstore growth: 69 in fiscal year 2016, a projected 60 in fiscal year 2017 and a projected 35 in fiscal year 2018.
Speaking at the Wal-Mart Stores Inc. 2016 Investment Community Meeting on Oct. 6, Walmart Chief Financial Officer Brett Biggs outlined the company's financial framework to deliver strong, efficient growth, operate with discipline and allocate capital strategically to drive long-term shareholder value.
The company will rely more on comp sales and e-commerce growth to drive the top line and plans to slow new-store openings, while increasing investments in e-commerce, technology, store remodels and other customer initiatives, Biggs said.
In addition, Walmart President and CEO Doug McMillon outlined four key areas of focus to drive continued success:
- Make every day easier for busy families;
- Operate with discipline, including a continued focus on expense management;
- Be the most trusted retailer; and
- Deliver results and position the company to win.
McMillon noted ongoing success will be driven by a number of factors. These include continued momentum in the U.S. business; solid growth in key international markets, including Mexico and Canada; a sharpened focus in China; and e-commerce investments.
"We are a company that must become more of an e-commerce and technology company. There's no doubt that e-commerce is going to become a much more important part of our business. So as we run stronger stores and build a bigger e-commerce business, we will continue to link them together in exciting ways," said Walmart President CEO Doug McMillon.
"Today, more of our customers are shopping with us in stores and online or using our apps. Our ongoing investments in online grocery, Walmart.com and Samsclub.com as well as new investments in Jet.com are just a few examples of how we will evolve to offer customers the flexibility and convenience to shop when, where and how they want," he added.
Bentonville-based Walmart has more 11,539 stores under 63 banners in 28 countries and e-commerce websites in 11 countries.