Wal-Mart Plans Smaller Store, Home Department Initiatives

In a presentation at Wal-Mart, Inc.’s 20th Annual Meeting for the Investment Community, company executives outlined plans to win back the holidays by running the company’s biggest Black Friday promotion ever and building comparable store sales long-term, in part by focusing on basics in home and apparel complemented by brands. As part of the presentation, Wal-Mart CEO Mike Duke announced that the company would focus more on small-format growth going forward, an initiative Charles Holley, Wal-Mart executive vp and CFO, has further detailed.

“Walmart plans to grow company net sales 3% to 5% in fiscal year 2015, which is projected to increase net sales by $14 to $24 billion. We expect to add another 33 to 37 million net retail square feet around the world next year,” Holley stated in announcing Walmart intentions.

Walmart has scaled back its capital expenditure expectations, with fiscal 2015 plans coming in at $11.8 to $12.8 billion, $200 million under the projected range for fiscal 2014. Some savings will come in a shift in emphasis as regarding formats. The original fiscal 2014 forecast was for 125 new big stores, including Wal-Mart’s main supercenter format, and, while it remains the same, the company projects 115 large format stores for Fiscal 2015. The original plan for smaller formats, including Neighborhood Market and Express, in fiscal 2014 was for 95 to 115 stores, but that was revised up to 120 for the year. For fiscal 2015, Wal-Mart is projecting 120 to 150 small format additions.

As for the home department, Wal-Mart said it regarded home, along with apparel, fresh food and wireless, as an operation where it can build on progress in generating better comps. In the presentation, the company pointed out how it can use basic products combined with licensed and established brands, Calphalon being one, to make further gains.

As for holiday, Walmart indicated that it would generate 25 billion impressions using a combination of television, print, radio, search and social media marketing to point out its holiday promotions, which will be influenced by a year-around initiative to provide deeper roll backs.