Is Wal-Mart Stores, Inc. (NYSE: WMT) looking to smaller-format stores to try and revive sales here in the U.S.? In a retailer known for landing huge, big-box locations all over the country to make it easier to have a "one-stop shop" for customers, has this strategy been tapped out? Possibly so -- something I looked at last week in my Wal-Mart Weekly column. But what is the solution? Is the opening of smaller stores seen as a retrenchment or a refinement of strategy for Wal-Mart?It's a last-ditch effort to revive struggling sales in the light of a rather disappointing 2006 for the retailer. While it saw record revenues for that year, profit windfalls did not follow, which speaks of loss-leader selling and moving merchandise without ramping up profit at the same time. After all businesses are in the business to make money, not just sell -- without profit -- right? It makes sense for some companies to forgive profits to build market share, but Wal-Mart is way, way beyond that point.
The New York Post said this week that Wal-Mart may be considering stores as small as 20,000 square feet, quite a drop from the 100,000 square-foot Wal-Mart Supercenter. Can Wal-Mart get into communities that have shunned the larger-format Supercenter with a small-store strategy? Perhaps -- and it's a good growth strategy as the retailer runs into roadblocks in certain areas of the country that won't permit the "big-bog" fare in their areas. Here's something to chew on: Wal-Mart's promoted a former Tesco executive (David Wild) to the position of senior vice president, new business development. An exec from Tesco, the largest supermarket chain in the U.K., may be just what the retailer needs to grow here in the U.S.
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Reader Comments (Page 1 of 7)
5-09-2007 @ 8:05PM
Marcus said...
Sounds good. I think Wal-Mart needs to keep growing. I've been a little concerned that they might slow down. I actually drove a couple of miles the other day and didn't see a Wal-Mart--thought I might be in India. Then I heard they're going into India too.
5-09-2007 @ 8:17PM
ann said...
brilliant, marcus! LMAO.
5-09-2007 @ 8:22PM
ann said...
brilliant, marcus! lmao.
5-09-2007 @ 8:24PM
Brian said...
I think downsizing is a great idea. My wife will drive clear across town to shop for groceries at a "normal" sized supermarket rather than do battle with the HUGE Super Wal Mart that is a block away.
5-09-2007 @ 8:41PM
MJZimmer88 said...
Will these smaller walmarts also have a mirror in the back that is the heart of the walmart?
5-09-2007 @ 8:48PM
sue said...
You have to be kidding! Wal-_mart needs to be stopped. They are so out of control. I won't shop there. There is no way possible that I would waste my time with that place. they have huge buying power, but do they pass the savings along? Nope...
Hey it just great knowing that any place you go in the store there is someone watching you like a wanted felon. Dont ya just love when you go in there for just say a pair of pants and you have like 10 people with loaded carts with food in front of you... hmmm Ive got better things to do with my time..
5-09-2007 @ 8:49PM
Mark L said...
Wal-Mart is smart.maller markets (population) and figure a large store won't be profitable! SMART & PROFITABLE!
Marco
5-09-2007 @ 8:57PM
Mike said...
A smaller store. So what? Still the same cheap Chicom trash merchandise.
5-09-2007 @ 9:15PM
D. LEDOUX said...
I KNOW FOR A FACT THAT WALMART NEEDS TO BRING BACK LAYAWAYS FOR THE LOW TO MID CLASS INCOME FAMILIES. THOSE PEOPLE STRUGGLE YEAR TO YEAR TRYING TO CLOTHE THEIR CHILDREN FOR SCHOOL. THERE IS NO STORE CHAINS THAT CARRY LAYAWAYS. WALMART WAS THEIR ONLY HOPE THEN THEY TOOK THAT AWAY ALSO.
"BRING BACK THE LAYAWAYS PLEASE"
5-09-2007 @ 9:10PM
deanna said...
GOOD THINKING! WE'RE GETTING OLDER AND THOSE HUGE STORES ARE A TURNOFF. I MAY PAY A FEW CENTS MORE, BUT STAYING WITH MY LITTLER SUPERMARKET IS ALL WORTH THE WHILE TO STAY OUT OF THAT RAT RACE.
d
5-15-2007 @ 10:55AM
Bev said...
I took a job at one of the "smaller" Wal-Marts. All they are is a grocery store that has very little to offer. If you are a "meat and potatoes" type eater then perhaps it's for you but if you want any sort of variety this is NOT the place to go to. I won't even do MY shopping there. The ONLY reason I took the job was because I can't land anything else right away. Wal-Mart is Wal-Mart...bottom line.
5-09-2007 @ 9:21PM
patricia said...
I hate walmart. If it is big or small Americans should stop shopping there. They sell cheap china junk that kill our kids and our pets too. They are big bullies that rip off consumers. They mistreat employees and take advantage of poor people by selling junk. I think anyone who shops at Wal Mart puts American works out of jobs and stills from the poor.
5-09-2007 @ 9:32PM
Marshall Rubin said...
Wal-Mart deserves sagging sales, and if they keep up their selling of cheap Chinese-made products that have been a large cause for jobs disappearing in the U.S., as well as their anti-worker, anti-union activities, the company will hopefully end up in the same garbage heap as the Enrons of the world.
Wal-Mart is a stinko company, and I'm proud that I have never been inside any of their stores.
Word has been getting out about Wal-Mart, and Americans are responding by witholding their cash. Wal-Mart, I won't be happy until you RIP.
5-09-2007 @ 9:23PM
patricia said...
I hate walmart. If it is big or small Americans should stop shopping there. They sell cheap china junk that kill our kids and our pets too. They are big bullies that rip off consumers. They mistreat employees and take advantage of poor people by selling junk. I think anyone who shops at Wal Mart puts American workers out of jobs and steals from the poor.
5-09-2007 @ 9:31PM
Bob Sawyer said...
Wal-Mart shot themselves in the foot when they did away with there LAY-Away. We would put the kids school duds on layaway and pay for them all summer but they would be paid for when school started, do the same for Christmas, if Sam didn't sell it, they did not need it. But the big lick hit me, I love to hunt and always had a rifle or shotgun or some kind of gear on layaway and never miss the $20 or so dollars a week but all that is gone now. Thank You!
5-09-2007 @ 9:48PM
jwaltier said...
So, tell me what their competitive advantage will be at 20,000 sq ft? They would lose efficiencies...
5-14-2007 @ 10:42PM
DF said...
Walmart needs to forget gimmicks such as smaller stores and concentrate on improving what they already have. The Walmart I've been shopping at supersized a few years ago and the result is a store that can't keep up with its size. When they run out of something, it takes a couple of months to re-stock the item, so I wind up going to another store anyway. I've about had it. And there are NEVER enough cashiers!
5-09-2007 @ 9:34PM
Scarlet said...
Is everyone dense??...Walmart is an icon to alot of people...and i love that I don't have to go to 50 million stores to shop..and the quality isn't bad either...I don't know where some of ya'll live but we have the best and friendliest Walmart's around...no one follows me and watches me like a hawk...and unless it's easter... christmas...or halloween ...the lines are fast and convenient...Like one person said...it was awful when they stopped layaway...I'm not ashamed to say it was a good hiding place for my Christmas presents and it was nice not to have to put alot of money out at once...I have 3 super walmarts ...all within 10 miles of me...one as close as a mile away...i love it......but bring back the Layaway...
5-09-2007 @ 9:44PM
sue essary said...
i agree walmart runs all the smaller stores outta business and the doing away wit layaway is saying they dont concider people with a family that cant afford 2 or more children that have to have school clothes and at christmas i have 3 grown children and 7 grandkids that have to be bought for and kmart does have layaway so i can go there they do appreciate the layaway and they are a part of sears so the quality is way above walmarts anyday poor old sam waltons rooling over in his grave over all the american woorkers products being not bought its quanity over quality just shot his made in the usa to made in india and china face it its a cut throat chain not to mention this multi million dollar store is in the same bracket tax wise as the smaller business i hope they do downsize maybe to one small store per town
5-09-2007 @ 9:44PM
kitty hogue said...
wal-mart is so missmanaged that it is one reason that it is falling,, the pharmacy stinks when they give your meds to someone else and they said they didnt pay for them at the counter,,, thats a no no... so who is at fault for that one,,oh i dont know... not me...the managers need to tighten up.