Between 30 and 40 small format Walmart stores are slated to open next year, Walmart US president and CEO Bill Simon told investors at the company’s 17th annual analysts’ meeting on Wednesday.
Simon’s presentation at the meeting was highly anticipated as it was his first appearance at the event in the capacity of president and CEO, a role he assumed in late June, and due to the fact there was considerable speculation in advance of the event about Walmart’s plans for smaller stores.
Simon offered relatively few details about new expansion opportunities next year aside from indicating that the profitability of the company’s Neighborhood Market stores introduced more than 10 years ago has improved to the point where they rival best in class competitors. Neighborhood Market stores average around 40,000-sq.-ft., but it was unclear how many of the 30 to 40 stores would be in the range of the Neighborhood Market concept or perhaps some type of smaller unit in the range of 5,000-20,000.sq.-ft. that Walmart is known to operate internationally. Walmart has what Simon called, “a ton of institutional knowledge,” about how to operate small formats internationally, but he declined to offer specifics about what a comparable store in the U.S. might look like, when or where the first units would open.
“We have models that I’m not prepared to discuss today,” Simon said in response to a question from an analysts.
The lack of detail around new store growth likely left analysts disappointed, although Simon did elaborate on other growth opportunities such as the company’s multichannel philosophy and some initiatives there to drive sales. For example, a pilot program with FedEx is being expanded to new markets in the Northeast so people can order merchandise at Walmart.com and pick up purchases at FedEx stores. He also said the company will experiment with a home delivery grocery service and dramatically expanded a same day pick up under its Site-to-Store program.
More immediately, Walmart is looking for improved results during the holidays as it corrects some self-inflicted problems through the addition of items to its product mix, restores promotional intensity to stores with the addition of feature displays to action alley and focuses on core customers with holiday advertising that calls out the market basket saving shoppers can achieve at Walmart.