Walmart in line to open 500 Neighborhood Market stores by fiscal 2016
New York — Walmart will open as many as 115 small-format stores this year, according to Bill Simon, president and CEO of Walmart U.S.
Simon discussed the chain’s store portfolio during a presentation at Raymond James Institutional Investors conference. He noted that Walmart’s smaller-format stores (below 60,000 sq. ft.) are making inroads against dollar stores, supermarkets and drug stores and will play a key role in the company’s future.
“They compete really well against multiple channels,” Simon said.
Simon explained that Walmart thinks of its smaller-format units, which include both the Walmart Express and Walmart Neighborhood Market banners, as hybrid stores rather than specific niche competitors.
“They are more hybrid stores than you would think … they all have fresh food and pharmacy and the Walmart everyday low price promise,” he said. “And they are all enabled with.com capabilities, and Site-To-Store capabilities. So you have that endless aisle that we can offer that others might not be able to offer.”
Walmart is particularly bullish on its Neighborhood Market concept, with a direct line to 500 by fiscal 2016, according to Simon.
“This is a great opportunity for us, he said. “Five hundred is by no means the end. It’s merely just the beginning of what we think the opportunity might be for this format.”
But the Walmart chief said the chain remains equally dedicated to its superstore concept.
“Supercenters are still a great growth vehicle for us from a dollar perspective and we’ll continue to build those where we see the opportunities,” Simon said. “We’ll add about 125 new supercenters this year.”
this will certainly effect Walgreens, CVS and Rite Aid. If they roll this out at 115 stores it will take a while, but eventually you will see them close enough to Walgreens or CVS to impact their bottom line. Any time a supercenter opens near a Walgreens, the pharmacy and front end of Walgreens suffers a loss of 25% or more.
Seems the advantage held by smaller format players will be challenged going forward in more mature markets. WalMart has been about savings on mass will it translate in to the local corner store? Simon sure thinks so!