American big-box retail giant Walmart recently reopened 117 remodeled stores, marking the chain’s largest single day of rollouts since it first opened in 1962. The endeavour cost over US$500 million dollars and saw Walmart implement a number of upgrades, including updated interiors with new paint and flooring, renovated bathrooms, LED lighting, and new signage to make it easier for shoppers to navigate stores. The retailer also expanded its vision centres and pharmacies with private screening
ening rooms, and placed digital touchpoints throughout the store to provide information of products and services. It enlarged the pickup and delivery area in stores with better storage and to create more efficient service procedures. And it added new “dollar shops” for consumers to pick through seasonal, more affordably priced items. The money spent on these improvements is part of two-year, US$9 billion project to modernise over 1,400 of the 4,717 Walmart stores across the country. As Neil Saunders, managing director and retail analyst at GlobalData, told Inside Retail, “Having produced a string of good numbers over the past few years, Walmart is currently one of the stars of the retail market.” Go-to destination for grocery According to Statista, a German data and analytics platform, in the US, Walmart’s net sales grew by seven per cent year on year in the 2023 fiscal year. Currently, Walmart is the largest retailer in the US, with over double the retail sales of its nearest competitors. In 2022, Walmart accounted for approximately US$500 billion in retail sales. To provide a point of comparison, Walmart’s US revenues totaled about US$318.5 billion in 2017. Saunders explained that the retailer’s “robust trading is partly driven by inflation in grocery, which flatters the sales line. However, Walmart continues to capture a greater share of shoppers and their spending as more [consumers] turn to it for lower food prices.” However, not everything has been coming up roses for the mass retailer. “While Walmart has successfully pulled in new shoppers for groceries, it has been less successful in its general merchandise business. Some of this is because core customers are more constrained and have cut their spending on non-food. However, some of it is also because Walmart has struggled to entice new food shoppers into buying things like clothing and homewares.” While Walmart is attractive from a consumer perspective with regards to necessary goods like groceries, when it comes to discretionary spending, shoppers may be more likely to visit retailers like Target, which offers more aesthetically pleasing merchandise, such as the kind sold through its high-low brand collaborations. Beyond “functional but basic” With that being said, Saunders does believe that Walmart’s upgrades are a step in the right direction to maintain the big-box wholesaler’s edge in the retail industry. “The store upgrades are part of a strategy to boost the business, especially in non-food,” Saunders elaborated. “Walmart wants to create a more aspirational and engaging shopping experience. At present many stores are functional but somewhat basic. They don’t do a good enough job of showcasing what Walmart has to offer or giving customers ideas about things to buy. They are the types of places where people go when they need things, but not to browse or to get ideas. “The newer formats have started to move the dial on this. They have better displays, lighting, and improved ways of displaying products. While the keen prices of Walmart have been maintained, the value for money messaging is improved through a better store experience.” But, since the retail chain has a significant number of locations scattered across the US, it may take more time than Walmart would prefer to see significant growth, Saunders warned. “Walmart has a lot of stores, so the rollout of the new format will take some time. However, they have made a very firm commitment to making the investment which is a big vote of confidence in their physical formats.” Making stores more inclusive In addition to the physical changes that Walmart has made to its brick-and-mortar locations, the chain is also adjusting its in-store operations to better meet the needs of an often-neglected consumer base. This month, the big-box retailer announced that it would be altering the shopping experience from 8-10am at stores nationwide to better accommodate the needs of customers with disabilities and sensory issues. As Walmart executives Denise Malloy Deaderick, Cedric Clark, and Alvis Washington announced in a release regarding the store’s modified operations, “During these hours, we hope our customers and associates will find the stores to be a little easier on the eyes and ears… These changes may have seemed small to some, but for others they transformed the shopping experience.” As Walmart continues to innovate the consumer shopping experience on a number of levels it appears that the legacy retailer will be staying in the lead for the foreseeable future.