Published on: October 28, 2008Walmart said yesterday at an analysts meeting that it plans to slow down its pace of new store openings – it will open 191 new stores in the current fiscal year and between 142 and 157 in the next fiscal year, down from 218 in the previous year.
According to the Wall Street Journal story, Walmart’s plans “include fewer 190,000 square-foot supercenters and place a greater priority on smaller stores, notably its Marketside neighborhood grocery, an about 15,000 square foot.”
And, the Journal writes, “While Wal-Mart reduces new store openings, it is embarking on a more ambitious plan to remodel existing stores. That plan is expected to touch all existing U.S. locations by 2014. The company said it expects to spend $1.6 billion to $1.7 billion on remodeling next year, up from $800 million to $1 billion in the current fiscal year, and $700 million the year before.”
At the same time, the retailer has reduced its plans for capital expenditures, and will spend $5.8 billion to $6.4 billion this fiscal year for its U.S. division, down from $9.1 billion last year. In fiscal year 2010, it plans to spend $6.3 billion to $6.8 billion.
In addition, the company’s US president/CEO, Eduardo Castro-Wright, said that Walmart is attracting more higher-income shoppers, with “traffic at stores serving households with income above $65,000 has been growing much faster than at the chain as a whole.”
Walmart CEO Lee Scott told the meeting that he expects fuel price declines to help the company, since it will give consumers more money to spend…presumably some of it at Walmart.
- KC's View:
- This doesn’t seem to be so much panicky or reactive as it does a matter of Walmart moving its pieces around the board…the strategy is locked into place, which give sit the luxury of making tactical decisions that serve the strategic goals.