Walmart no longer relies on huge shopping malls
Business in the large shopping centers is stagnating. The world's largest retailer is instead investing in warehouses for online trading.
On Wednesday, Walmart shares on Wall Street fell by almost 3.6 percent. The group had previously revised its profit forecast downwards for the second time this year. In terms of sales, growth of only two to three percent instead of three to five percent is now expected. In addition to the strong dollar, which means that sales generated abroad are low after conversion into dollars, a statement by Walmart manager David Cheesewright, who is responsible for international business, caused a sensation. "Wherever I go, I see a weak economy and consumers at the limit, that hasn't changed all year," said Cheesewright.
Smaller shops instead of the huge shopping mall Walmart are trendy when shopping in the US retail trade or customers stay at home and order online. Or customers simply turn on their computers and buy online. For both customer needs, wholesale markets are the wrong answer. Wal-Mart is now reacting to this: The number of planned new "Supercenters" will be halved.
Smaller businesses do better
The group now wants to put the saved dollars into the online business. Walmart now plans to build two more warehouses, each with an area of over 100,000 square meters, in order to be able to process Internet orders better and faster. The group has already opened three such warehouses this year. For this, investments in the traditional businesses of Walmart would be reduced to free up funds for new growth opportunities, said Walmart CEO Doug McMillon.
With the existing wholesale stores, Walmart has not had any attraction for two years. The number of customers has been stagnating or falling since 2012, and fewer and fewer people want to wander hundreds of meters through the long aisles with shelves. On the other hand, the numbers for the around 400 so-called neighborhood markets, which also belong to the Walmart Group, are more positive. In these grocery stores with less than 4,000 square meters of retail space, like-for-like sales climbed by 5.6 percent in the most recent quarter. In contrast, they fell by 0.3 percent in the 3,400 supercenters.
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