Retail News Breaks Archives
Walmart unveils expansion plans for 2012
October 14th, 2011
BENTONVILLE, Ark. – Walmart has announced its store expansion plans and capital expenditure budget for its upcoming 2013 fiscal year, which begins February 1, 2012.
The company plans to invest between $13 billion and $14 billion in total on capital expenditures, including possible acquisitions.
Capital spending is being scaled back, however, at its flagship Walmart U.S. division, which has budgeted between $6 and $56.5 billion, down from $6.5 billion to $7 billion this year. Within that budget, however, Walmart U.S. plans a greater square footage increased than last year, primarily because more dollars are being allocated to new stores and fewer to remodels.
While the retailer will continue to open more of its medium and small format outlets, its Supercenters will remain the priority expansion format. "Supercenters remain the primary growth vehicle for Walmart U.S. and the company will reduce construction costs on new stores through value-engineering initiatives," said Bill Simon, president and chief executive officer of Walmart U.S. "We have identified a large number of potential Neighborhood Market opportunities, and we plan to open between 80 and 100 medium-to-small formats next year."
The retailer continues to review and evaluate the Walmart Express format that debuted last summer. The stores measure approximately 15,000 square feet and are intended to enable Walmart to penetrate densely populated urban markets with sparse real estate as well as thinly populated rural areas. Five test locations are currently in operation and six more are slated to open by the end of the current fiscal year in January 2012.
"The rollout of Walmart Express is predicated on the review of our pilot program and the opportunity to build greater scale in a particular market," Simon said. "We will continue to pursue a balanced approach to market share growth in low, medium and higher share markets. In addition, we continue to reduce the cost and scope of our remodel program to increase efficiency and to minimize customer disruption."
The company expects to reduce its U.S. construction costs by about 10% next year.
New store plans call for approximately 130 to 135 Supercenters, 80 to 100 medium-and- small format stores and 10 to 15 Sam’s Clubs. Sam’s Capex budget is about $1 billion, unchanged from the current 2012 fiscal year.
Both Simon and Walmart president and chief executive officer Mike Duke reiterated that comparable-store sales growth remains the company’s top priority. After posting three consecutive months of comparable-store sales gains from July through September, the company is forecasting total sales growth of 5% to 7% for fiscal 2013.