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Wal-Mart Cuts Costs; Develops Upscale Concept

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Wal-Mart detailed plans of its "Marketside" concept, revealing the small stores will have an upscale approach. The strategy seems squarely aimed at Tesco's Fresh & Easy concept, which is rapidly spreading across the Southwestern U.S.

The Financial Times has more:

The stores will be the first new banner launched by Wal-Mart in a decade and mark a radical departure for a retailer that has built its business around its giant Supercenter concept and an "every day low price" strategy.

This discount pricing strategy has been especially successful during the US economic downturn.

Job advertisements for the new Wal-Mart business say the stores will deliver "unique solutions for time-starved consumers in a premium fresh/convenience oriented format" - an indication of the pricing position of the new 15,000 sq ft stores.

Wal-Mart has already indicated that the neighbourhood stores will be focused on delivering "meal solutions".

Meanwhile, as a whole, Wal-Mart is looking to cut its capital spending.

Wal-Mart Stores is reducing its capital spending forecast for fiscal 2009, as it slows construction of supercenters amid a weakening U.S economic environment.

The world's largest retailer said Tuesday it expects to spend $13 billion to $14 billion during the fiscal year ending Jan. 31. Last October, the company said it expected to spend $13.5 billion to $15.2 billion.

Chief Financial Officer Tom Schoewe says the lower forecast "reflects Wal-Mart's ability to grow more efficiently with reduced capital expenditures." He says the company plans moderating supercenter growth in the U.S.

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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