The trend towards local continues

In a briefing reported by the Financial Times, Walmart suggests it is hitting an inflexion point in its business as shoppers wanted smaller stores closer to their homes.

While its model of big out-of-town stores is still successful, Bill Simon, head of the US business, said consumers were reluctant to drive long distances to shop and people were moving back to city centres.

He split shopping trips into three types:

- large grocery shops often at weekends (falling)

- medium-sized purchases (flat)

- "immediate access" trips (growth).

Competition with small stores was intense as dollar stores had expanded, drug stores were competing for sales and competitors were opening small format stores.

What does a Walmart small store look like in the US?

- Neighbourhood markets = 38,000 sq ft

- Express stores = 15,000 sq ft.

Simon stressed that Walmart was not abandoning its business model as a mass market discount retailer.

Comments

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