Wal-Mart Corporation Plans to Open 600 New Stores in 2006
At least 270 more "supercenters" planned for U.S. in next year alone
By Ann Zimmerman
First published by the Wall St. Journal, October 26, 2005
Wal-Mart Stores Inc. said it plans to add between 555 and 600 stores globally next year, adding 60 million square feet and becoming more aggressive in the number of supercenters it opens, Chief Financial Officer Tom Schoewe said in an interview.
The world's largest retailer by sales plans to open between 270 and 280 supercenters, which sell groceries and general merchandise, in the U.S. About 160 of these will be expansions or relocations of former discount stores. This year Wal-Mart had estimated it would add between 240 and 255 supercenters, but will end up with 266 new ones.
"We are ahead of plan and the practical reality is that they are getting more difficult to open, but we're putting a larger number of projects in the hopper," Mr. Schoewe said shortly before Wal-Mart began its two-day analyst conference yesterday at its Bentonville, Ark., headquarters.
Wal-Mart has seen sales growth in the U.S. slow down this year because of tougher competition, an uneven economic recovery and higher fuel prices. Nonetheless, the retailer's store-opening plans indicate that it is bullish on its growth prospects. Indeed, Wal-Mart Chief Executive Lee Scott said yesterday, "We could be three or four times bigger in the U.S."
Mr. Scott expects local zoning and land-use laws to grow stricter in coming years. Therefore, the company is reckoning that stores built and opened sooner rather than later will face fewer delays. Already the company has seen projects in certain areas of the country take longer to gain government approval than elsewhere. In much of the Midwest and central U.S., Wal-Mart sees, on average, 18 months pass from when it selects a site to when it opens a store there. That process takes an average of more than three years in California and the Northeast, Wal-Mart executives say.
In California, Wal-Mart has faced opposition from unions and environmental interests since entering the market in 2002. The company will open four supercenters in California in the next two weeks to put its total at 14, but store construction in the state will still be delayed by lawsuits and other opposition efforts, Mr. Scott said. "I would guess that each one of those stores will be a battle," he said. "On the other hand, I can't think of any of them that won't be remarkably successful."
Wal-Mart also expects to open 20 to 30 discount stores, 15 to 20 neighborhood markets, 30 to 40 Sam's Clubs. And it expects to open another 220 to 230 stores internationally.
© 2005 Dow Jones Co.
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