written by Tom Sullivan
At today’s shareholder meeting, Wal-Mart has announced that they are scaling back their new store growth, starting with this year:
Thomas M. Schoewe, the chief financial officer of Wal-Mart, said the company is “committed to providing better returns,” and added, “The message you are hearing today is that we have found a real nice balance between appropriate return and the growth of your great company.”
Mr. Schoewe called the reductions a “moderation” and emphasized that Wal-Mart will still add 20 million square feet of new store space this year. But the cutback is significant because each Wal-Mart supercenter can book sales of $100 million a year, and the giant stores have propelled much of Wal-Mart’s growth.
This year, rather than opening 265 to 270 stores, Mr. Schoewe said, Wal-Mart will open 190 to 200. For the foreseeable future, it will open 170 supercenters a year, well below its average last year.
More from the New York Times: Wal-Mart Scales Back Expansion Plans.
The bulk of Wal-Mart’s increase in sales, over the past few years, has been attributed to new store growth. Scaling back their growth is a large turnaround for the retailer, regardless of how they classify it.
June 1st, 2007 at 4:41 pm
[…] at Big Box Watch, I’ve noted that Wal-Mart has announced that they are scaling back their expansion efforts. New store growth will be reduced to 170 supercenters next year, down from 270 stores that they had […]
June 2nd, 2007 at 10:11 am
WalMart is horribly Locked in to an increasingly outdated Success Formula. This is just an early sign that the company is admitting it will not continue its historical growth. We can expect this trend of slower growth to continue, including selective store closings. It takes a long time for a ship larger than the Titanic to even look like it’s in trouble, but we can now see that WalMart is turning to buying its own stock instead of land and buildings - so the eventual end is starting to show. For more analysis go to http://www.ThePhoenixPrinciple.com