In a poll taken last week on RetailWire, 65 percent thought Walmart's decision to go slow with its small store formats would ultimately give the chain an advantage over a wide variety of competitors. After all, the logic goes, retailers are engaged in a marathon and not a sprint.
All that taken into account, it seems curious the chain is not going after the small store opportunity more aggressively after U.S. CEO Bill Simon told attendees at a Morgan Stanley conference that Walmart Express stores are already making money.
"What we're finding is that inside of 12 months they're turning profitable. We didn't actually project that," Mr. Simon was quoted by Reuters.
To date, Walmart has opened 10 Walmart Express stores in rural Arkansas and North Carolina as well as Chicago. The stores top-out at 15,000 square-feet and offer a tightly edited selection of items sold in other Walmart outlets.
"The next phase is, how big could this be," Mr. Simon said, according to CSPnet. "We're going to work on the construction costs and distribution costs — already profitable, but we want to get those up to the 'fleet' average or hopefully beyond that. We're also going to work on density — how many can you build in a market and to what point do you have to get to for this to matter on our large base?"