Walmart Express Pilot Program to Expand

BENTONVILLE, Ark. -- More Walmart Express and Neighborhood Market locations will be popping up across the country as Wal-Mart Stores Inc. steps up its capital plan for U.S. small-store format openings for the current fiscal year.

The company is expanding its original capital forecast, provided in October, and now expects to add approximately 270 to 300 small stores during this fiscal year, doubling its initial forecast of 120 to 150 stores. Walmart U.S. will maintain its plan to open approximately 115 new supercenters this year, according to the Bentonville-based retailer.

Walmart currently operates 346 Neighborhood Markets and 20 Walmart Express stores. According to the company, Express units will be expanded beyond the initial three-market pilot program.

"Customers' needs and expectations are changing. They want to shop when they want and how they want, and we are transforming our business to meet their expectations," said Bill Simon, president and CEO of Walmart U.S. "Customers appreciate the broad assortment of our supercenters for their stock-up trips, as well as our small-store formats for fill-in trips. By unlocking this growth opportunity and further combining our supercenters and small-store formats with an unlimited selection available through ecommerce, we provide our customers with anytime, anywhere access to our brand."

The move to smaller stores continues to be a plus for the retailer as comp sales for Neighborhood Market stores grew approximately 4 percent for fiscal year 2014, driven by fresh and pharmacy.

"Neighborhood Market is performing comparable or favorable to leading grocers," Simon said. "Our small-store expansion, in addition to providing customers access to a wide variety of products including fresh, pharmacy and fuel, will help us usher in the next generation of retail. This will combine thousands of points of physical access with digital retail experiences that include initiatives such as Site to Store and Pay with Cash."

As a result of its more aggressive plan, Walmart U.S. projects to end fiscal year 2015 with net retail square footage growth of approximately 21 million to 23 million square feet across all formats vs. its original projection of approximately 19 million to 21 million square feet. The projected capital expenditures and square footage details exclude the impact of future acquisitions, the chain noted.

"We have a healthy pipeline of stores in development, and we systematically work to improve our real estate and construction processes, reduce building costs and shorten the time needed to open our stores," Simon said. "In addition to providing best-in-class, one-stop shopping at supercenters, we believe that accelerating our small-store expansion will allow customers to choose where and when to shop based on their needs.

"Our small-store expansion will also strengthen our market share and create greater efficiencies in our supply chain through a tethered approach that uses supercenters as a supply chain base, links our resources, and provides a unique and connected customer experience," he continued.

Walmart is also revising its capital expenditures forecast for the U.S. segment to now be $6.4 billion to $6.9 billion -- up from an initial range of $5.8 billion to $6.3 billion -- to fund the expansion plan. This reflects the increased small-store growth and the current pipeline of supercenters, which remain an essential part of the company's strategy.

In total, across supercenter and small-store formats, Walmart U.S. plans to open 385 to 415 units in fiscal 2015, adding to the more than 4,200 stores currently open.

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