Sunday, February 23, 2014

Small format plans get bigger for Walmart

Walmart announced last week that it plans to open 270-300 new Neighborhood Market and Walmart Express stores in the next year. Late last year it had announced that they would open only 120-150 of the small format stores (Walmart to accelerate small format growth). The forecast for 115 new supercenters remains unchanged.

The existing 346 Neighborhood Market stores and 20 Walmart Express stores continue to generate positive results, according to the company. Last year, comparable-store sales for the Neighborhood Market rose 4%, driven largely by fresh food and pharmacy.

As a result of the revised store forecast, Walmart increased its capital expenditure budget for the U.S. division by $600 million to a range of $6.4 - $6.9 billion.

Walmart CEO Bill Simon said that small store expansion "will strengthen our market share and create greater efficiencies in our supply chain through a tethered approach that uses supercenters as a supply chain base, links our resources and provides a unique and connected customer experience."

Along with the announcement about the small store growth plan, Walmart announced that total company sales in the fourth quarter increased 1.4% to $128.8 billion, while net income and earnings per share fell 21% and 19.8%, respectively.

For the full year (2013), sales increased to $473.1 billion, while net income and earnings per share fell 5.7% and 3.2%, respectively.

The company blames a portion of its results on bad winter weather and a reduction in the federal government's Supplemental Nutrition Assistance Program. Walmart expects challenging market conditions to continue in 2014.

No comments:

Post a Comment