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Walmart Unleashes Supercenters in Bid for Grocery Dominance

Walmart Unleashes Supercenters in Bid for Grocery Dominance


BENTONVILLE, AR
Monday, December 30th, 2019

As Walmart continues to fight to retain its top-dog status, the retailer has not shied away from innovation and bold thinking. In this year alone, the company has accelerated overseas growth, overhauled its in-store management, tested out new retail formats, and launched an extensive store remodel initiative. All this is necessary to keep Walmart on the cutting-edge while competing with the growing e-commerce space and mega e-tailers like Amazon. President and CEO Doug McMillon recently revealed that Walmart’s efforts to stay competitive rest on its signature giant stores, something strictly e-commerce-based retailers have been unable to offer consumers.

Doug McMillon, CEO, Walmart“The time where people might have been worried that our boxes were too big has long passed,” McMillon said at an investor meeting earlier this month, reported by The Wall Street Journal. “The supercenter footprint and positioning gives us a great opportunity to expand services and help the economics of the model.”

Walmart’s supercenters span around 180,000 square feet and offer 100,000 products across numerous departments, including grocery. According to McMillon, these vast brick-and-mortar locations could support new ventures like fast delivery, health clinics, and other services, the news source reports. Expanded online grocery pickup and in-store-run delivery services accounted for more than half of the 40 percent growth in U.S. e-commerce sales this past year, so the idea to boost these services is not unfounded.

Walmarts Supercenter approach offers customers a service other e-commerce retailers are not able to offer

More warehouse and distribution support are needed to follow through on those expanded services, which Walmart continues to invest in, like its most recent $200 million facility in Topeka, Kansas. The retailer is reportedly also looking into selling added warehouse and shipping space to third-party sellers, which would allow more companies to make their products available on Walmart.com, according to WSJ. As a result, Walmart’s customers would have access to an expanded product selection, and the retailer would earn additional revenue through shipping and processing fees.

Amazon has been a staunch competitor of Walmart for some time, and although WSJ reports that the retailer’s revenue is more than twice that of Amazon, the e-tailer’s profit growth has surpassed Walmart’s—last year, Amazon’s operating income tripled while Walmart’s grew by eight percent. In addition to its supercenter, brick-and-mortar strategy, Walmart has addressed the other side of the coin as well, investing in its e-commerce operations and taking “Stores” out of its corporate name to communicate its prowess in both the brick-and-mortar and digital retail space. Walmart is also reportedly working to add further e-commerce warehouse capacity to support its next-day delivery services.

Will Walmart’s multi-pronged strategy boost its profits and e-commerce presence? Deli Market News will report.

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