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• The Arkansas Democrat Gazette reports that Walmart plans to cut back on its opening plans for Neighborhood Market format stores by as much as 20 percent, arguing that it needs to focus more on quality than quantity.

"We have a better understanding of what customers value most, from the choice of location, to the size of the box, to the product offerings," Wal-Mart U.S. CEO Greg Foran said last week. "Based on these learnings, we've decided not to pursue a number of potential locations, as they would not provide the type of quality experience customers expect from a Neighborhood Market. We are thoughtfully evaluating every decision and use of company resources as we go through the back half of the year. But we are confident in the direction we are headed."

However, the story quotes Edward Jones retail analyst Brian Yarbrough as saying that "I think there's an argument to be made that Neighborhood Markets are cannibalizing supercenters ... I think they were nervous about some of the markets they were getting into, how it could affect other stores and they're wanting to take a look at how to grow long-term. Can you afford to have one format performing so well at the expense of another?"


Fortune reports that Walmart CEO Doug McMillon announced via his personal Instagram account on Friday that the company and its charitable foundation will donate $25 million to support global disaster response efforts. The donation was keyed to the upcoming 10th anniversary of Hurricane Katrina, which devastated the New Orleans area. At the time, Walmart was on the front lines of the private sector response to the natural disaster.

Beyond the the donation, Fortune writes, "McMillon’s decision to use Instagram to announce the philanthropic gift reflects his growing closeness to the social media company, which is owned by Facebook. Last September, Instagram co-founder Kevin Systrom joined Walmart’s board, and McMillon began posting photos to his personal Instagram account in June."
KC's View:
If Walmart is cutting back on Neighborhood Market stores because it is worried about cannibalization of supercenter sales, the question is whether it will have the discipline to continue to invest in e-commerce if it cannibalizes bricks-and-mortar sales. I think it will, but it will require vigilance to make sure that competing interests within the company don't distract from the broader goal.