Wal-Mart Stores Inc. plans to open more small stores as it links them to its supercenters, which will serve as mini-warehouses for their smaller cousins. The plans, announced at the retailer's annual investor meeting, come as the world's largest retailer faces increasing pressure from online retailers like Amazon.com as well as dollar stores, which have been rapidly adding locations and winning customers with low prices and convenience.
Wal-Mart expects to roll out the new distribution scheme in the first of three markets in March, though it declined to say where. It is testing some of the aspects of the plan in areas like Gentry, Ark., where it operates a Wal-Mart Express store, which is one-tenth the size of a typical supercenter. The retailer operates more than 4,000 stores in the U.S.
In the short term, Wal-Mart, based in Bentonville, Ark., is trying to rev up business at its namesake stores in the U.S., which has been weakening because of an uncertain economy. The company said that heading into the holiday shopping season it's trying to make sure the the right inventory is in stock and is being more aggressive about discounting across the store.
U.S. Wal-Mart stores, which account for 59 percent of the company's total sales, reported a 0.3 percent decline in revenue at stores open at least a year in the second quarter. That marked the second straight quarter of declines in a key revenue figure after six consecutive quarters of increases. Revenue at stores open at least a year is considered an important measure of a retailer's performance because it removes the effect of adding stores.
Adding in Sam's Club and international stores, revenue at stores open at least a year was flat compared with a year ago. It rose 1.7 percent at Sam's Club.
In an address to investors, Wal-Mart CEO Mike Duke described the economy as "tough and unpredictable." He noted that the partial government shutdown has also weighed on shoppers and the company is watching the development closely. "The government shutdown is on the minds of our customers," he said.
