Walmart, the largest retailer in the world, announced plans on January 31st, 2024 to open 150 new stores across the United States over the next 5 years. This marks a major strategic reversal for the company, which hasn’t opened any new stores since 2018.
Background
For the past few years, Walmart has focused more on improving its ecommerce capabilities and existing stores rather than building new locations. However, the COVID-19 pandemic changed shopping behaviors and drove more customer demand for convenient omnichannel retail options.
As online shopping accelerated rapidly in 2020 and 2021 during lockdowns, Walmart invested heavily in improving its grocery pickup and delivery services. The company also remodeled hundreds of existing stores to enable easier order fulfillment and introduced high-tech warehouse automation systems.
Now, Walmart is ready to complement its digital expansion with targeted growth of physical retail stores placed closer to customers.
Locations and Format
The new stores will be a mix of both large and small format locations:
- Over 100 of the new stores will be Walmart’s modern Supercenter format, which combines a full grocery selection with general merchandise like apparel, home goods, and more.
- Around 20 stores will be a smaller format ranging from 30,000 to 40,000 square feet focused on grocery pickup and delivery.
- The remaining stores will be mid-sized units between 40,000 to 100,000 square feet.
Walmart plans to focus its new stores in areas currently underserved by retail options, particularly smaller metro areas and rural counties. Priority states for expansion include Texas, Florida, North Carolina, Georgia, Colorado, and Arizona.
The first couple of new stores are set to open as early as Spring 2024 in Jacksonville, Florida and Mills River, North Carolina.
Enhanced In-Store Experiences
In addition to opening new stores, Walmart is heavily investing in existing locations with major remodels and technology upgrades. Over the next year alone, the company expects to renovate around 650 U.S. stores including prominent updates like:
- More self-checkout registers
- Expanded grocery sections
- Wider aisles
- Enhanced lighting/fixtures
- New flooring, paint, and signage
Walmart’s “store of the future” concept also emphasizes initiatives like digital price tags, AI-enabled cameras to monitor inventory smarter, and mobile checkout options for added convenience.
These customer-friendly enhancements aim to keep Walmart’s 9,000+ domestic stores feeling fresh while incorporating the latest retail innovations.
Jobs and Community Investment
With major growth planned over 5 years, Walmart expects to create over 15,000 new jobs in construction, operations, and corporate roles.
| Year | New Stores Opening | Estimated New Jobs Created |
|---|---|---|
| 2024 | 30 | 3,000 |
| 2025 | 50 | 5,000 |
| 2026 | 30 | 3,000 |
| 2027 | 20 | 2,000 |
| 2028 | 20 | 2,000 |
The company also estimates its expansion will generate $35 billion in additional economic activity nationwide including local construction jobs and sales tax revenue in host communities.
To win public support for its real estate plans, Walmart aims to position itself as an attractive partner for small towns by touting benefits like:
- Hundreds of new local careers
- City infrastructure improvements
- Greater resident access to low-cost groceries/goods
- Expanded local tax base
Supply Chain Bets
Building dozens of new stores while undertaking 650 remodels will require major investments in Walmart’s domestic supply chain.
The company has signed multi-year agreements with trucking carriers to guarantee equipment and drivers required to handle higher volumes flowing into new store locations. Walmart’s fleet of 6,500 tractor-trailers will also see expanded routes.
On the distribution side, Walmart is expanding over 20 existing regional distribution centers while upgrading to faster parcel sorting systems to support ecommerce order delivery.
Several Wall Street analysts have praised the supply chain efforts as a smart play to exert more control over Walmart’s massive logistics ecosystem as transportation costs climb industry-wide.
Outlook
With solid sales momentum exiting 2023, Walmart’s store expansion signifies leadership’s confidence in the company’s growth prospects despite potential economic headwinds.
The plans have already earned a positive stock market reaction – Walmart’s share price jumped over 2% on the day of the announcement.
If Walmart delivers on its 150 new stores in the next 5 years, the move should increase the brand’s physical retail footprint by nearly 2% while providing convenience to more American shoppers. That brick-and-mortar growth combined with ecommerce innovations will help cement Walmart’s pole position in US retail for the foreseeable future.
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