Wal-Mart accelerating U.S. small store growth; upping tech investments
Bentonville, Ark. — Wal-Mart Stores detailed a number of moves, including opening smaller stores in the United States, cutting back on overseas growth and increasing its investments in technology and e-commerce, on the occasion of the company’s 20th annual investor meeting.
“Technology is our fastest growing area for capital expenditures,” said Charles Holley, Walmart’s executive VP and CFO. “We will increase our technology spend 70% from fiscal year 2009 through fiscal year 2014. Next year, investments in this area will increase another 12%.”
Holley said the company continues to make progress on capital efficiency, finding new ways to reduce construction costs for new stores and remodels and shortening the timeframe from approval to opening.
“Over the last three years, we delivered more with less, while growing square footage, sales and shareholder returns,” he said.
The discounter will add between 33 and 37 million net retail square feet worldwide next year, with more than half of the increase driven by Walmart U.S. Total capital spending for fiscal year 2015 (begins Feb.1, 2014) is projected to range between $11.8 and $12.8 billion, $200 million lower than the revised fiscal year 2014 projection.
In the United States, Walmart will add between 235 and 265 stores — including 120 to150 small format stores, up from 115 this year — next year. It is planning for about 245 openings this year, up slightly from earlier forecasts.
Walmart U.S. said it is increasing its fiscal year 2014 projected capital investment by $500 million to a range of $6.0 to $6.5 billion. The segment is projecting fiscal year 2015 capital investments to be lower than the updated current year forecast, but with greater square footage.
“We will accelerate growth of our Neighborhood Markets because of their strong returns, consistent comp sales performance and double-digit net sales increases,” said Simon. “We will continue to build and leverage the supercenter format, which remains our primary format for growth. We plan to open approximately 115 supercenters next year, including relocations and expansions.”
On the international front, the company plans to close approximately 50 underperforming stores in Brazil and China, with the majority of the closures occurring in the fourth quarter of its current fiscal year. Walmart International now expects to add approximately 14 million net retail sq. ft. this year, roughly seven million sq. ft. below its original guidance of 20 million sq. ft. to 22 million sq. ft.
For next year, Walmart International expects capital expenditures to range from $4.0 billion to $4.5 billion, which will generate approximately 12 million to 14 million net retail sq. ft. among its 26 markets.
Report: Holiday shopping starting earlier; less focus on Black Friday
Ann Arbor, Mich. — Black Friday shopping may be on the decline, according to a new study by CFI Group, a customer satisfaction technology and analytics firm. The company’s 2013 Holiday Retail Spending Report found fewer than 25% of consumers plan to spend more than half of their total holiday shopping budgets during the Black Friday/Cyber Monday period. But 45% said they will begin before November, with 61% indicating they’ll finish their shopping completely by early December
"It’s clear the time for retailers to start holiday shopping campaigns is now," said Sheri Petras, CEO of CFI Group. "Consumers are beginning their holiday shopping earlier in the season, and as behavior is shifting beyond traditional Black Friday spending, those who focus solely on Black Friday-centric campaigns will miss significant sales opportunities."
Other key findings of the report include:
- One-third of shoppers said store preferences are motivated by promoted sales and coupons, while an additional 25% said they prefer to shop at stores that have everyday low prices.
- Across income levels, people making less than $50,000 a year are more likely to start and finish shopping earlier this year, while those making more than $100,000 a year reported they won’t begin their shopping until the second half of November.
- Forty-two percent of consumers plan to spend more than 40% of their total holiday budgets online.
- Only 21% of Millennials report that they plan to shop at all during this period, Black Friday’s future is at risk as Millennials become an even more dominant shopping force in the future.
The 2013 Holiday Retail Spending Report measured the shopping habits of consumers during the upcoming holiday season, studying when shoppers plan on beginning their holiday purchases, how much they plan on spending and how these factors compare among age groups and income levels.
Survey: Top retailer sites too slow — and getting slower
Mahwah, N.J. — The websites for the top 500 U.S. retailers are still too slow and continue to get slower – pages have slowed down 14% since summer 2013, and are 16% slower than fall 2012, according to a study by Radware.
Radware’s quarterly “State of the Union” report measures and tracks the performance and page composition of the top 500 U.S. retail websites (as ranked by analytics firm Alexa.com) over a two-day period with the purpose of gaining ongoing visibility into the real-world performance of leading Ecommerce sites.
Key findings from the “State of the Union: Ecommerce Page Speed & Web Performance, Fall 2013” include:
- The trend toward bigger, slower pages continues. The median page took 8.56 seconds to load for first-time visitors, representing a 14% slowdown over the median of 7.48 seconds recorded three months ago (summer 2013).
- The median page takes 5.3 seconds to become interactive. Sites have experienced a slowdown of 8% since summer 2013, when the median time to interact (TTI) was 4.9 seconds. Ideally, pages should be interactive in 3 seconds or less. (TTI is the point at which a page displays its primary interactive content (e.g., feature banners with functional call-to-action buttons.)
- Three common design practices are failing users. Most sites made at least one of three critical mistakes in the design and presentation of their feature content: loading feature banners last; placing a call-to-action at the bottom of feature banners; and/or not implementing a call-to-action at all.
- The adoption of performance best practices is inconsistent, even among leading sites. Among the top 100 sites, adoption of some best practices is nearing the saturation point, whereas others remain neglected.
- Browser vendors are not keeping pace with page demands. Across all three major browsers, performance is trending downward as browser vendors struggle to keep pace with the demands of today’s large, complex, dynamic web pages.
“In just the last few years, web page speed has migrated from the fringe to center stage, emerging as not just a technology trend, but a hot-button business issue,” said Tammy Everts, web performance evangelist, Radware. “Numerous studies have found an irrefutable connection between load times and key performance indicators, such as conversion rates and revenue increases. Site owners need to understand that optimizing performance is much more nuanced than just pushing out faster pages to customers: It’s about understanding what users want from every page of your site, then fine-tuning those pages to ensure that critical content loads first instead of last. A site owner who neglects core-performance best practices is missing out on significant opportunities to make relatively easy performance gains.”