Omnichannel vision driving Walmart’s small format growth

Walmart will be opening more small stores next year and beyond as the company pursues a vision of omnichannel retailing that it contends no other company is capable of executing.



Walmart U.S. president and CEO Bill Simon on Tuesday morning shared a message of physical and digital convergence involving an acceleration of smaller format stores and continued advancement of the retailer’s digital capabilities. He suggested multiple times during his presentation that the company has reached an inflection point in terms of building a next generation retail enterprise.



According to Simon, Walmart’s capital budget for domestic purposes next year will range between $5.8 billion and $6.3 billion, resulting in the addition of between 235 and 265 stores — including between 120 and 150 small format stores, versus 115 this year — encompassing between 19 million and 21 million sq. ft.



If Walmart finds itself at the upper end of that range of possibilities this time next year it will be a modest increase in domestic expansion at a potentially lower cost as Simon said Walmart has reduced store opening costs by 15%.



During the current fiscal year, which ends in late January, Walmart said it will spend between $6 billion and $6.5 billion to open a total of 245 stores encompassing 18 million sq. ft., above the company’s earlier forecast which called for spending of $5.5 billion and $6 billion 220 to 240 units and 15 million to 17 million sq. ft.



The expanding base of small stores coupled with more than 3,000 supercenters give Walmart multiple points of access to offer shoppers a highly integrated experience that no other retailer can touch, according to Simon.