Walmart said Thursday that it plans to significantly slow its efforts to open new U.S. stores, a strategic shift by the world’s largest retailer as it works to claim more of the shopping dollars that are rapidly moving online.
At a meeting with investors, Walmart executives said the chain will open about 35 supercenters next year, sharply lower than the 60 it expects to open by the end of the current fiscal year. It aims to open just 20 of its smaller, grocery-oriented Neighborhood Markets, a pullback from the 70 it is to open this year.
Walmart finally playing catch up with other leading retailers who have killed all new stores and in some cases are shrinking their footprint with store closures. The revived focus on online sales is good to hear, but growth at the rate needed just isn't there yet:
The goals executives laid out for its digital business were ambitious: They say they expect to deliver 20 to 30 percent annualized growth in a segment that lately has not shown nearly that level of momentum. For example, last quarter, Walmart’s global e-commerce sales were up 11.8 percent over the previous year. In the last full fiscal year, the company’s online sales were up 8 percent.
Investments in personal shoppers powering the buy online pick-up curbside is showing promise but will take quite a bit of time to roll-out to 4,600 stores and sounds almost department store like:
This is why the personal shoppers show customers items such as produce and eggs before packing them into the car. The idea is that if someone saw an avocado that wasn’t quite ripe or an egg that was cracked, a substitution could be made on the spot.
Personal shoppers also are supposed to get to know the preferences of repeat customers, so they might learn, for example, if someone likes their bananas a little on the green side. They might also slip your dog a biscuit or your child a lollipop.
Although I believe Walmart is headed in the right direction, I believe a harsher reality is on the horizon. Having a Walmart within 10 miles of 90% of the American population is a benefit that has stopped paying benefits and is now a liability. Store closures and smaller footprint stores is the only healthy way of setting the business up for success in the evolving online shopping world.