Walmart, the largest retailer in the world, announced plans on January 31st, 2024 to aggressively expand its U.S. brick-and-mortar footprint over the next 5 years. The plans include opening 150 new stores as well as remodeling and converting over 650 existing stores. This marks a major strategic shift for Walmart, which hasn’t opened any new U.S. stores since 2018.
Walmart to Add 150 New Stores Across U.S.
Walmart plans to open 20 new stores in 2024, followed by 50, 40, and 40 stores in the next three years respectively. The new stores will be focused in three main areas:
- Suburban areas
- Global tech hubs
- Travel centers along interstates
The first two stores are set to open this Spring in Jacksonville, Florida and Metro Atlanta.
Walmart has specifically called out wanting to expand in global tech hubs where younger and more affluent customers live. These include cities like Austin, Denver, San Francisco, Nashville, Charlotte, and Miami (Forbes).
The new stores will be larger, digitally advanced formats tailored to each community ranging from 90,000 square feet to over 200,000 square feet. They will offer new services like healthcare clinics, veterinary clinics, dental clinics and more.
Why the Sudden Expansion?
The expansion comes on the heels of Walmart’s recent 4-to-1 stock split which aimed to make shares more affordable for employees and younger investors. It signals a new aggressive growth strategy under Walmart’s CEO Doug McMillon.
McMillon cited changing shopping habits coming out of the pandemic as a main driver behind the expansion:
“The future of retail is in spokes with density in population zones. We want to make life easier for customers in the moments that matter.”
He believes suburban areas are ripe for growth as more people moved out of dense urban cities during the pandemic. Walmart also wants to capture growing online grocery sales, which are expected to double to over $250 billion by 2025. Opening more localized stores helps Walmart take advantage of this fast-growing category.
Wider Business Impacts
The expansion is expected to create over 15,000 permanent jobs across the U.S. Positions will include store associates, managers, pharmacists, veterinarians, vision specialists, dental specialists, health screeners and more.
Additionally, Walmart plans to spend nearly $14 billion this coming year working with U.S. suppliers. This includes companies like General Mills, Coca-Cola, Unilever, Mondelez, Kraft Heinz, Kimberly Clark and others. The new stores will lead to increased demand, providing a boost to American manufacturing.
The move puts pressure on Walmart’s brick-and-mortar competitors, many of whom have closed stores in recent years:
|Net New U.S. Stores 2022
In particular, the expansion directly challenges Target which has forged a reputation for stylish, tech-enabled smaller format stores. While Walmart pursues a “supercenter of the future” strategy, Target is expanding via its network of convenience-focused locations. It will be interesting to see shopper response to these two divergent store strategies in the years ahead.
Along with opening new stores, Walmart plans to remodel 650 U.S. stores over the next year as part of a “$3.5 billion investment” to advance store design and the shopping experience. Efforts will include enhancing pickup and delivery capabilities and implementing more self-checkout lanes to reduce wait times.
The company is also testing emerging technologies like AI-enabled cameras to manage inventory and autonomous floor scrubbers. Successful pilots could see these technologies implemented across stores.
Expect more experimentation and aggressive growth from Walmart as it looks to cement itself as the dominant American retailer for the next generation of shoppers. The expansion puts retailers on notice to step up their game.