Wal-Mart Stores still considers its Express format to be a pilot project, though the expansion of the format this year could provide the company with answers to a lot of open questions, the company’s chief financial officer said Tuesday, March 11th.
Speaking at the Bank of America Merrill Lynch Consumer and Retail Conference in New York, Charles Holley, said Walmart plans to open between 110 and 120 Express stores this year on top of the 20 it already operates.
“We like the sales of the Express stores a lot, but we’re still figuring out the P&L part of it, and we don’t have enough [locations] out there to figure out the expense part and how to make it work to feel comfortable saying it’s not a pilot anymore. We want to get more mass, to cluster them and to get the most efficient supply chain we can.”
Walmart also plans to continue to open more Neighborhood Markets, with between 160 and 180 set for the current fiscal year, Holley said. “The sales per square foot are as good as any top food retailer in the U.S., and the returns are extremely good, with the new ones as good as new supercenters,” he noted.
“The convenience factor for Express stores and Neighborhood Markets is extremely important. I would think there could be [opportunities for] hundreds, if not thousands, of these formats.
“Something like 11,000 new small stores have been added in the U.S. in the last three years, which is one reason we’ve decided it’s time to go ahead and increase these Neighborhood Markets and Expresses. We think they will be very powerful vehicles for a customer experience with convenience.”
Regarding ecommerce, Holley said Walmart is “committed to winning at the intersection of digital and physical. It’s a long-term proposition, but we believe it’s extremely important for our customer, and combining and merging these two will create a huge competitive advantage.”
Combining digital and physical is all about convenience, he added. “We want to offer Walmart’s full assortment, no matter where customers shop. To make that happen, we’re leveraging best practices around the world — adding asset-direct kiosks that allow customers to order from online catalogues while they’re in a store; grocery delivery and drive-through pick ups, which are being testing in Denver and San Francisco; lockers in Washington D.C., and pickup locations in the United Kingdom, “and you’re likely to see more pickup locations in the U.S. for Walmart and Sam’s.
“And I would expect us to continue to make acquisitions; even small ones that would help enable our e-commerce efforts to add additional sales.”