Wal-Mart Plans Its First Stores in California : Retailing: The firm’s strategy is unlike its moves into small towns in the Midwest and South. It is now poised to move into markets near big cities.


Wal-Mart, the Bentonville, Ark.-based discounter with more than 1,400 stores nationwide, is now poised to invade California.

The company plans to open 10 stores in California in 1990 and 1991, with most to be located in the interior sections of the state. This year, it will open stores in Lancaster, Victorville, El Centro, Madera, Modesto, Ridgecrest and Stockton. In 1991, it plans stores in Elk Grove, Hanford and Bakersfield.

But, unlike its moves into small, isolated towns in the Midwest and South, Wal-Mart’s entry into California is really part of a new corporate strategy that is seeing the company start to invade larger markets on the edges of major metropolitan areas. In these larger communities, Wal-Mart is likely to have a much smaller economic impact than it has had in the rural Midwest and South.


“They will be ringing the big cities, in the outer suburbs,” said Woody Whyte, a retail analyst with the Stephens Inc. brokerage in Little Rock, Ark.

Its stores in Lancaster and Victorville, for instance, will place Wal-Mart for the first time on the outer edges of the Southern California metropolitan market; Elk Grove, Modesto and Stockton will put the chain just beyond the Bay Area-Sacramento metro markets.

Similarly, analysts say, the chain is moving into the outer reaches of big cities in other sections of the nation, like the Chicago and Atlanta metropolitan areas, and is entering some markets on the East Coast.

“Originally we were in rural towns, but we feel we can fill the needs of customers in large towns as well,” Wal-Mart spokeswoman Jane Arend said.

Wal-Mart’s decision to move beyond its small-town roots is part of founder Sam M. Walton’s strategy to grow dramatically during the coming decade. At the company’s annual meeting earlier this month, Walton said he hopes that Wal-Mart, which now has annual sales of about $26 billion, can hit sales of $125 billion a year by the end of the decade. That would make it one of the nation’s biggest corporations.

Analysts believe that Wal-Mart is fully capable of reaching those heights. Already, it is on the verge of surpassing Sears to become the nation’s largest retailer.


“Sam Walton doesn’t promise things if he doesn’t think they are do-able,” Whyte said. “In my opinion, Wal-Mart is one of the best-run companies in America.”