Wal-Mart stays aggressive

Wal-Mart speaks to OPI+ about its aggressive expansion plans, the best store formats and coming head to head with Tesco

Not content with the 3,200 stores that Wal-Mart already operates in the US, the world’s largest retailer has announced plans this week to open another 1,500 over the coming years.

"Aggressive growth is not new for us," Wal-Mart spokesperson Marty Heires told OPI+. "We have been growing aggressively throughout our history, and we have no plans to stop."

John Menzer, the company’s vice chairman and head of its domestic Wal-Mart stores division, said Wal-Mart was on schedule to meet an announced target of between 335 and 370 new US stores in 2006 after 341 last year.

This figure includes all store formats: Wal-Mart discount stores; supercenters; smaller neighbourhood markets; and Sam’s Club membership warehouses. Wal-Mart has said that the focus of the plans will be on supercenters, which are the single largest group of stores with 1,980 locations.

Heires told OPI+ that Wal-Mart is looking at locations across the US but would not disclose further details. However, California looks like one likely target area, because it is a large market where Wal-Mart has fewer stores than in its traditional bases in the South and MidWest. Heires would not release details of a time frame for the plans.

But he did suggest that the retailer planned to push non-food ranges going forward. "One of the most important trends in our stores is to better serve all the customers who shop with us. Among our customers are selective users who purchase food and consumables but may not be attracted to other offerings such as apparel and electronics. We are working hard to get these customers to cross the aisle to other areas of our stores by offering great quality and value. At the same time we will not forget our opening price point customers."

The retailer has revealed it will remodel 1,800 of its existing superstores over the next 18 months as part of a broader strategy to help boost non-food ranges such as office products and electronics, as well as clothing and home furnishings. The new stores will have faux wood floors, wider aisles and digital television display walls.

By focusing on supercenters, Wal-Mart will follow an opposing strategy to Tesco, which plans to set up a large number of convenience stores in the US, based on its successful Express format, from 2007.

When asked if Wal-Mart may consider a convenience format likes Tesco, Heires told OPI+:  "Our growth vehicle in the US will continue to be our supercenters. We have already adapted our stores to meet the special requirements of desirable sites that, for instance, might be a little smaller than our optimal site. And we have designed stores to match the prevailing architecture of communities. We will continue to be adaptable as we pursue premium store sites."

Heires claimed that Wal-Mart in no way considers Tesco’s announcement to enter the US market a threat. "We recognise Tesco as a good competitor, and we welcome competition because it makes us better at what we do for our customers," he said.