Walmart's CEO just signalled a massive change to its business model

Walmart is shifting its business model.

Going forward, the nation’s largest retailer doesn’t want to be defined by its stores.

“This company, over time, is going to look like more of an ecommerce company,” Walmart CEO Doug McMillon said Thursday at Walmart’s annual investor day in Bentonville, Arkansas.

He said stores will remain important to Walmart’s future. But the company will be cutting back on new store growth, focusing more on same-store sales — or sales at stores open at least a year — and growing investments in ecommerce.

Walmart will open 130 US stores this year, down slightly from the 135 to 155 stores it had originally projected, and also down from the 230 stores that were opened last year.

Next year, it will open just 55 US stores, half of which will be its smaller-format Neighbourhood Market stores.

In the meantime, Walmart has doubled its online fulfillment warehouses in the last year to 10, Reuters reports. Industry experts had expected Walmart to have just eight warehouses by the end of 2018.

Walmart is trying to transform into an ecommerce company to better compete with Amazon, which had $107 billion in online sales last year, compared to Walmart’s $13.7 billion in online sales in the period.

But the majority of Walmart’s business still comes from its stores.

The company’s total revenue last year was $482 billion, meaning more than 97% of its business came from stores.

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