Wal-Mart Stores Inc., plans to add hundreds of smaller stores in the U.S. over the next three years as the largest retailer tries to reverse sagging sales at its larger Supercenters.
The smaller stores, including the Neighborhood Market format that features fresh foods, will range from 25,000 to 70,000 square feet, Bill Simon, chief executive officer of Wal-Martâs U.S. operations, said during a March 10 investor conference.
âWe are going to be adding hundreds of these in the coming years and maybe even more depending on how they work out,â Simon said, referring to smaller stores, according to a transcript of the speech from the Bank of America Merrill Lynch Consumer Conference.
During a previous peak expansion period, Wal-Mart built about 350 Supercenters over a year, âso when we get this thing right, these are going to come real fast and we're real excited about this format,â Simon said, according to the transcript of the presentation.
Wal-Mart has more than 2,700 Supercenters in the U.S., averaging about 185,000 square feet each.
The merchandise mix in the new stores will include a âstrong emphasisâ on groceries, including fresh produce and meat, as well as a more limited selection of general merchandise, Wal-Mart spokesman Steven Restivo said in a March 11 e-mail.
Wal-Martâs small formats include Express stores, which are about 15,000 square feet, as well locations on college campuses, Simon said. The company is also considering acquisitions to fuel growth, Simon said. He declined to name any potential acquisition targets.
In October, Simon said Wal-Mart expected to open as many as 40 small and medium-sized U.S. stores during 2011 as the company accelerated expansion into urban areas. The Neighborhood Market stores would comprise most of the new stores, he said. The company has also said it planned to double its sales of locally grown fresh fruits and vegetables in the U.S. over the next five years.
Bentonville, Ark.-based Wal-Mart has about 158 Neighborhood Market stores in the U.S. that average about 41,500 square feet each.
Wal-Mart is targeting Chicago and other urban markets and emphasizing smaller formats amid efforts to boost a sales slump thatâs stretched over seven consecutive quarters. While Wal-Mart is the largest U.S. food retailer, its overall sales have come under pressure as consumers increasingly shopped at other dis-counters, such as dollar stores.
During the 13 weeks ended Jan. 28, Wal-Martâs comparable U.S. store sales fell 1.8%, excluding gasoline, from the same period a year earlier, the company said in February. The sales figure excludes Wal-Martâs Samâs Club stores.
Simon, during the conference, indicated Wal-Mart will continue to be an aggressive competitor in most merchandise categories.
âWe will sell whatever the customer wants as long as we can make money on it,â Simon said, according to the transcript. âWe compete with everybodyâ¦ When you start looking at comparisons, we compete with the biggest food players in the country, the biggest general merchants in the country, the smallest dollar stores in the country.â
Wal-Mart accounts for about a fifth of the U.S. retail food market and sold about $132 billion in groceries in the companyâs fiscal 2010.