Wal-Mart Is Planning to Boost Store Space by 8%

From Times Staff and Wire Reports

Wal-Mart Stores Inc. on Monday said it plans to increase its store space by 8% in the fiscal year beginning in February, including 240 to 250 more Supercenters and 40 to 45 new discount stores.

This was close to the pace the Bentonville, Ark.-based company and world’s largest retailer set last year when it said its expansion plans would include 50 to 55 new discount stores and 220 to 230 Supercenters.

The current increase was above the 655 million square feet the company plans to operate by the end of the current fiscal year. Wal-Mart said relocations or expansions of existing discount stores would account for about 160 of the Supercenters.


The latest expansion plan comes as the retailer faces opposition in places such as California -- the nation’s most populous state -- where critics charge that the company unfairly squeezes out smaller, locally-owned businesses.

Wal-Mart has countered that it pays competitive wages and contributes to state and local economies by buying their goods and services and supporting local organizations.

Wal-Mart last month won a long-sought foothold in the Los Angeles area when the city of Rosemead approved the retail giant’s plans to build its first Supercenter in the county.

The vote came after weeks of debate in the city, only 12 miles from downtown Los Angeles, amid intense opposition that argued such a store would depress wages and hurt the economy.

Wal-Mart wants to build 40 Supercenters in California over the next four years. But opponents won a victory in March when Inglewood voters rejected Wal-Mart’s proposal for a store that sells discount merchandise and groceries. Then, in August, the city of Los Angeles adopted an ordinance designed to make it harder for Supercenters to locate there.

Wal-Mart is focused on opening new stores in urban areas and overseas because it has saturated rural regions in the U.S. The retailer’s same-store sales gains, which have been sluggish in the last four months, rose an estimated 2.3% in September, the low end of its forecast.


“The Supercenter will be the main vehicle for growth for the next four years,” analyst Bill Dreher at Deutsche Bank in New York said. “They have not gone to many metro centers yet, so there is still opportunity. After that, they will be focused on international expansion.”

Indeed, as part of its plans for next year, Wal-Mart said it would add 25 to 30 new units of its Neighborhood Market stores and 30 to 40 of its Sam’s Clubs. Neighborhood Market stores are about 40,000 square feet each, the company’s smallest format.

Wal-Mart did not say how many new stores would be in California.

Wal-Mart’s international division plans to open about 155 to 165 stores in existing markets with 30% of the total representing relocations or expansions, Wal-Mart said.

Shares of Wal-Mart rose 18 cents to $53.31 on the New York Stock Exchange. The news came out after regular trading ended.

Bloomberg News and Reuters were used in compiling this report.