Wal-Mart plans 35 million square feet expansion for 2012

Wal-Mart Stores plans to boost its square footage by between 3 and 4 percent during its next fiscal year, executives told investors on Wednesday. That means adding about 35 million square feet of new stores, said Charles Holley, the company’s treasurer. This is part of a strategy for sales growth of 4 to 6 percent for the year.

“We are positioning our company for the next-generation Walmart, which means that we will grow internationally and in the United States,” Holley said. “In the United States, we will shift more capital toward new stores, including Supercenters and smaller formats. We are lowering remodeling costs through greater efficiencies, so the total capital commitment for Wal-Mart U.S. next year will be flat with the current fiscal year.”

Plans include 11 million square feet of Walmart space and 500,000 square feet of Sam’s Club space in the U.S., and 24 million square feet of Walmart space overseas. In the U.S. this will comprise roughly 165 large-format stores measuring over 60,000 square feet each, and 40 smaller-format units measuring less than 60,000 square feet each.


“Over the next few years, Wal-Mart U.S. will move toward a three-format portfolio, which will drive expansion to urban markets and small towns as well as fill in gaps in existing markets,” said Bill Simon, CEO of Wal-Mart U.S. “We have integrated efficiencies into our Supercenter design that have allowed us to decrease the average square footage for our Supercenter format. The medium format, between 30,000 and 60,000 square feet, will be based on the needs of an individual market. The small format, which is less than 30,000 square feet, will be targeted to urban markets and small towns.”

Wal-Mart is also allocating capital to continue converting discount stores to Supercenters, which adds no square footage but is expected to increase sales, he said. “Of the 155 to 165 Supercenters we will add next year, 45 to 50 will be new units, with the remainder conversions. Neighborhood Markets make up the bulk of the medium-format stores, and there will be some pilots of the small-store format included in next year’s plan.”

By the end of the current fiscal year, Wal-Mart will have remodeled roughly 550 U.S. stores. Wal-Mart U.S. plans to remodel some 500 during the next fiscal year. “Remodeling costs will be lower next year, due to changes in design and schedules,” said Simon. “The time to remodel a store will decrease by 40 percent, and with fewer disruptions, traffic and sales will improve sooner.”

Total capital spending for next fiscal year (ending Jan. 31, 2012) is projected to range from $13.5 billion to $14.5 billion, up nearly 4 percent.

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