Sunday, October 17, 2010
Wal-Mart to speed up U.S. store building
Wal-Mart which is the worlds largest retail store is planning on increasing the production of new stores in the up coming fiscal year. Wal-Mart does not plan on building huge stores like they have been in the past though, they will be smaller stores to appeal to more customers. Instead of having one big store near a few towns there will probably be one in every town or urban area for more convenience. This is a good sign for the economy because they estimated to build 153 stores this year and next year they estimate there will be an estimated 185-205 constructed starting the next fiscal year on February 1, 2011. Wal-Mart is obviously seeing an increase in sales to be expanding more rapidly. Even though Wal-Mart is the biggest retailer, there is still room for them to grow. They are doing well in some areas as always but they found out that there "roll back" strategy was not working, so they went back to "Everyday low prices." Wal-Mart has hurt small businesses in the past because of there massive selection of products. If they go through with the building of small stores I think the small family owned businesses will suffer even more. This will just give shoppers more of a reason to shop at Wal-Mart's because of the lower prices and the great selection they offer.
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7 comments:
I'm sure the range of opinions on this news is very wide. Some will be happy about new stores being opened and new construction sites, meaning more employment opportunities and indicating higher confidence amongst retailers that consumers will cover expansionary costs. Some, though, will undoubtedly be concerned about the impact that Wal-Mart's expansion, especially in this manner, will have on small and local businesses around the country.
Ultimately, whether Wal-Mart will help or hurt a town depends on the demographics of the area in which it is built. If it drowns out local businesses, then it will have a detrimental affect by decreasing overall incomes in the town. However, in many towns there is no actual business that offers the services Wal-Mart would provide. In this case, it is simply opening a new niche in the market, and by offering lower cost goods will increase real incomes.
I think Wal-Marts new view and model of their store (smaller stores in multiple cities) will benefit the comsumers even more than they have in the past. Now that Wal-Mart will both types of stores spread around the world they will provide for all the different types of customer buying habits. Also, the increase in construction of of stores will act as a stimulus giving many people jobs in construction and work in the new stores. I feel the introduction of the new stores will help the world's economy more than it will harm the smaller stores and family stores all around the world.
Great, Walmart outsmarted us all. They came in with a big store that no smaller stores could compare or compete with and took over all of the consumer needs. Now that the smaller stores have been shutdown due to the multinational icon of Walmart, they are being re-established under a Walmart sign. As some people say, 'you must take a step back for every two steps forward.' Since they have eliminated the competition, they are entering a market segment which they essentially bought out. I am not against Walmart and their vision to make a superstore which holds most consumer needs and well as things we do not need but buy anyway due to their ultimately low prices.
Obviously Walmart has seen great increases in number of consumers and revenues during a recession but a concern that I am not sure Walmart is looking at is what happens after the recession. Will people move back to specialty items from specialty stores once the recession is over. If so, then is it right time to expand on the number of stores, or is the right time to go after these specialty brands which are currently hurting during this recession and looking for a long term relief plan (maybe with Walmart).
I kind of agree with what John says however it might be a few years before people feel confident enough to purchase high quality specialty brands thus Walmart might end up benefiting from this plan. People also tend to be happy with their service and quality and thus might stick to the store.
Also, opening smaller stores in more locations will be better for consumers who normally would go to a individual non-chain store to purchase products at higher prices. Knowing Walmart has low prices and a variety of products consumers will be satisfied with this plan.
As much as I don't like Wal-Mart, it would be dumb for them not to increase production of new stores. They see room for potential growth and it was be absurd for them not to capitalize on it. I am upset to see local stores go out of business, and am hoping that consumers begin to value the shopping experience over low prices in post recession times, bringing a rise to local/regional retail stores.
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