Wal-Mart CEO Says Customers Don't Want To Walk Through Huge Supercenters

Wal-Mart CEO Doug McMillon says the company’s supercenter stores got way too big.

“We just found out how big was too big, you know, and some customers don’t want to walk all that far,” McMillon said in an interview with PBS’ Charlie Rose

The retailer’s largest supercenters are over 200,000 square feet, which is about the size of four football fields.

“A few years ago, we recognised and started adjusting the supercenters down to a smaller size,” he said. 

McMillon said Wal-Mart stores will continue to get smaller in the future as its e-commerce business grows. 

“There’s kind of a natural adjustment that’s taking place over time,” he said.

In addition to downsizing stores, Wal-Mart is also rolling out a new store concept that is about one fifth the size of a supercenter.

The stores, called Neighbourhood Markets, carry a smaller assortment of merchandise and focus heavily on groceries, pharmacy and fuel. 

Groceries account for 56% of Wal-Mart’s sales, and research shows that consumers no longer buy food and beverages at one-stop shops.

“In the 1990s and the beginning years of this century, the greatest threat to supermarkets and grocery stores came from supersized ‘one-stop shopping’ venues like supercenters and warehouse clubs,” the market research firm Packaged Facts wrote in its most recent annual report on emerging grocery trends. “Today the threat is spread out among all retail channels, including drugstores, dollar stores, limited assortment chains, and — the elephant in the room — e-commerce.”

On average, consumers shop at five different types of stores to fulfil their grocery needs, according to Deloitte ‘s 2013 American Pantry report.

Wal-Mart announced in October that it would cut back on the growth of new supercenters next year and accelerate Neighbourhood Market openings. The company has about 400 Neighbourhood Market stores, compared to more than 3,300 supercenters.

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