Walmart Downsizes Its Numbers
BY HAUWA INDIMI
Staff Writer
Walmart has unveiled its plans to cut down on the number of supercenters it plans on opening in the next few years.
Walmart unveiled its decision for cutting down the number of supercenters in the United States. The world’s largest retailer has appealed to its investors to bear with it while it makes this monumental decision, as Walmart is known globally for its massive stores.
The reasons behind this is that Walmart has recognized the rapid pace at which e-commerce is growing and wants to invest the money it originally set out for super-centers into e-commerce.
Walmart predicts that by 2018, online shopping would bring in $35 million, up from $10 million last year.
Therefore, this idea is thought to be healthy in the long run although it might lead to some short-term pressure. The Wall Street Journal reported, “The giant retailer has found itself on the wrong side of trends in the U.S., as shoppers favor smaller and more conveniently located stores or making purchases online.”
In response, Walmart will only be opening nine to twelve megastores next year, down from twenty this year.
“We will change the mix of our capital spend through reductions in areas we have invested in historically to fund investments in new growth opportunities,” said Doug McMillon, President and CEO of Walmart Stores, Inc.
However, “the company has posted much better results for its 400 Neighborhood Markets, where sales rose by 5.6% in the quarter ended July 31, excluding newly opened or closed stores,” said Wall Street Journal.
Walmart’s Sam’s Club unit is also said to cut its store openings in half next year, planning to open nine to twelve stores next year, down from twenty this year.
This is Walmart’s response to the external environment – the growing e-commerce market – as well as their customer feedback regarding the store size. Walmart has recognized that if it does not make some changes to adapt to the changing environment, it will soon be left behind.
