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Wal-Mart shifting to smaller stores

Fri., March 11, 2011

NEW YORK – Wal-Mart Stores Inc.’s top U.S. executive told investors Thursday that the company is considering acquiring retailers with smaller stores to help turn around its weakened U.S. business.

The world’s largest retailer also told investors at a Bank of America investor conference that it plans to build hundreds of smaller stores in coming years.

Wal-Mart is facing stiff competition in the United States from dollar chains and drug stores, which often are more convenient for shoppers. Sales at its U.S. namesake stores open at least a year fell 1.8 percent, the seventh quarterly decline in a row for that key indicator, and overall U.S. sales at Walmart stores fell 0.5 percent.

The company said last month that it will open 30 to 40 small stores this year on a faster schedule than originally planned.

Half of those will be Neighborhood Markets, which vary from 25,000 square feet to 70,000 square feet. The other half of the new stores will be in the company’s latest format, Walmart Express, which are about 15,000 square feet, and another new concept, called Walmart on Campus. Walmart Express stores are slated to open in the second quarter in both urban and rural areas. The company declined to disclose any more details.

The average size of Wal-Mart’s supercenters is about 185,000 square feet.

“The aim here is to get the right model so that we can rapidly roll these things out,” said Bill Simon, president and CEO of Wal-Mart’s U.S. division, referring to Walmart Express. “At our peak, we built about 350 supercenters in a year, so when we get this thing right, these are going to come real fast, and we’re real excited about this format.”

Wal-Mart isn’t rushing into acquisitions, he said.


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