Wednesday, October 13, 2010

Wal-Mart to build 24 Chicago stores

Wal-Mart Stores Inc., the king of the big-box discount retailers, will shift its attention from supercenters to smaller stores in an attempt to gain new customers, according to a report—and Chicago will be a prime market for this expansion, receiving 24 new stores of three different sizes.

A Wal-Mart spokesman did not immediately return a call seeking confirmation of the news which was reported by the Chicago Sun-Times.
Wal-Mart also is redirecting money from remodeling existing stores toward opening smaller new stores. Over the next two fiscal years, it plans to build 30 to 40 smaller stores, mostly in urban areas, Bill Simon, CEO of Wal-Mart U.S., said during an investor meeting in Rogers, Ark., on Wednesday. About half of those will likely be "Neighborhood Market" concepts that offer produce and dairy products.

Meanwhile, the average size of Wal-Mart's largest, supercenter-format store has shrunk to 180,000 square feet from 195,000 square feet. Mr. Simon said the company is accelerating the creation of stores that are between 30,000 and 60,000 square feet. Wal-Mart operates 2,843 large-format stores in the United States and 181 smaller neighborhood stores.

Both Bentonville, Ark.-based Wal-Mart and rival discounter Target Corp. are trying to break into densely populated urban areas and increase sales via smaller stores. But analysts have been concerned about Wal-Mart spending money on new stores while sales at existing stores have stagnated. Sales in Wal-Mart stores open for at least one year have declined for five consecutive quarters, though Wal-Mart Stores Inc. CEO Mike Duke predicted Wednesday that sales will turn positive in the fourth quarter.
Pullman or at least the area around Pullman may be considered an underserved area. Especially if you call these areas "food deserts", but what other underserved areas around the city could benefit from a smaller scale Wal-Mart store?

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