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.
Checkers/Rally’s selects Cardfree platform for end-to-end digital solution
San Francisco — Cardfree, a mobile commerce provider to large merchants, announced that quick-service restaurant chain Checkers/Rally’s will leverage its full commerce platform to provide consumers with a complete mobile experience.
Checkers/Rally’s will be the first QSR to use mobile to lead key consumer initiatives such as CRM, loyalty and stored value. The Cardfree merchant commerce platform will enable Checkers/Rally’s to tie all programs together with mobile acting as a common thread. The platform gives merchants a comprehensive view of their customers that traditional programs have been unable to do.
By leveraging the data tied to a user’s master account, Cardfree gives merchants the ability to engage customers based on individual behaviors and preferences. In addition to powering smart offers, gifting, and true surprise and delight rewards, Cardfree also provides a digital stored value solution that’s optimized for mobile. Checkers/Rally’s will be the first customer to launch Cardfree’s stored value product.
“The Cardfree team brings unparalleled experience in launching successful mobile commerce programs, and they offered a fully integrated platform that will make deploying easier for our franchisees,” said Terri Snyder, chief marketing officer of Checkers/Rally’s, which has nearly 800 locations. “We were looking for a one-stop solution and Cardfree stood out for its depth of platform and thought leadership. This technology allows us to leapfrog our competitors and provide real-time value to our customers.”
The Checkers/Rally’s mobile application will launch in early 2014.