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To Keep Ahead of the Pack, Wal-Mart Plans Further Aggressive Growth

BENTONVILLE, Ark. - Wal-Mart Stores, Inc. has unveiled its strategy for store growth for the fiscal year beginning Feb. 1, 2005. The company's current expansion plans are in line with its aggressive growth strategy in recent years.

On the domestic front, the Wal-Mart division intends to open about 40 to 45 new discount stores and 240 to 250 new supercenters during the fiscal year. The retailer expects that relocations or expansions of existing discount stores will account for about 160 of those supercenters, while the rest will be new operating units.

The company plans to grow its Neighborhood Market concept by building approximately 25 to 30 new units in the upcoming fiscal year. The Sam's Club division intends to open 30 to 40 domestic clubs, about 20 of which will be relocations or expansions of existing clubs. Wal-Mart International plans to open 155 to 165 stores in existing markets. The company expects that about 30 of these stores will be relocations or expansions of existing stores; the remainder will be new operating units.

During the next fiscal year, Wal-Mart will also build three new regional general merchandise distribution centers and three new food distribution centers. Together, these six facilities will increase the company's distribution space by more than 5 million square feet.

President and c.e.o. Lee Scott said in a statement: "The planned square footage growth for the coming year represents approximately 55 million square feet of new retail space, and represents more than an 8 percent increase over the 655 million square feet we estimate we will have at the end of fiscal year 2005. We also plan to remodel approximately 360 stores and clubs in the next year."

Retail expert Stan Eichelbaum of Cincinnati-based Marketing Developments told Progressive Grocer, "Wal-Mart is so aggressive in pricing, technical progressions, and customer connectivity, and yet the organization understands that dominance isn't the finish line -- there are still large portions of the market to attack." According to Eichelbaum, too many of Wal-Mart's competitors are overconfident about their current share, not realizing the implications of a fickle marketplace with little customer allegiance. "Wal-Mart keeps moving faster" than its rivals, Eichelbaum pointed out, so most other companies are preoccupied with fighting against its onslaughts rather than developing new strategies of their own.

As well as running stores in all 50 states, Wal-Mart operates in Argentina, Brazil, Canada, China, Germany, Mexico, Puerto Rico, South Korea, and the United Kingdom. The company additionally owns about 37 percent of Seiyu, Ltd., with warrants to buy up to approximately 69 percent of that company by the end of December 2007. Seiyu operates more than 400 stores across Japan.

--Bridget Goldschmidt
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