Doug McMillon, President and CEO of Wal-Mart Stores, Inc. Photo: Walmart Today blog
Walmart said Friday it planned to pull the plug on its small-format Walmart Express concept as part of a broader plan to shutter 269 stores worldwide.
Of the 154 planned U.S. closures, 102 were Express, which had been in pilot mode since 2011. A mix between a dollar store and small grocery, the c-store concept was designed to help Walmart reach areas its bigger stores couldn’t, including urban centers. It averaged around 15,000 square feet versus 40,000 for Neighborhood Market and 178,000 for its supercenters.
The smaller stores — both Neighborhood Market and Express — have been touted as Walmart’s future growth vehicles over the last few years with shoppers finding their supercenters too cavernous.
By 2012, a Wall Street Journal article noted that Express was being affected by Walmart’s “supercenter mind-set.” Stores were carrying wide varieties of staples when only a few were needed for “fill-in” needs. They also stocked 20-pound dog food sizes that couldn’t be carried home by urbanites.
In 2015, Walmart officials were telling analysts that Express was challenged leveraging expenses. Dave Marcotte, an analyst with Kantar Retail, told Supermarket News in early 2015 that Walmart’s supply chain system should work “reasonably well” for Neighborhood Market but Express was too small. Mr. Marcotte said, “Your cost to serve keeps rising and you’ll have difficulty getting the right quantity of product in there — which might be a half-case instead of a case.”
A Journal article last week said Express’ profitability was challenged because it couldn’t fit higher-margin items such as apparel and appliances. The Journal also indicated “consumers expect the same low prices at a Walmart Express as a Supercenter, while they might expect higher prices from a drug store chain.”
Walmart instead will focus on strengthening Supercenters, optimizing Neighborhood Markets, growing the e-commerce business and expanding Pickup services for customers. Also covered in the closures in the U.S. are 23 Neighborhood Markets, 12 Supercenters, seven stores in Puerto Rico, six discount centers and four Sam’s Clubs.
More than 300 stores openings are planned this year, including 50 to 60 supercenters and 85 to 95 Neighborhood Markets domestically.
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- Walmart is ending its Express concept and closing 269 stores – The Washington Post (tiered sub.)
- Wal-Mart Makes Rare Retreat on Home Turf – The Wall Street Journal (sub. required)
- RIP, Walmart Express – Blomberg
- Can Wal-Mart Think Small? – The Wall Street Journal (sub. required)
- Is the Walmart ‘Express’ derailing? – Supermarket News