Wal-Mart Wants Room to Grow

Michele SanFilippo, March 28, 2005

New York — Wal-Mart Stores has plans to add 55 million square feet of new space at a cost of $14 billion, executives said during the company's presentation on Wal-Mart International at last week's Merrill Lynch Retailing Leaders conference.

According to Jay Fitzsimmons, senior vice president of finance and treasurer, Wal-Mart International currently has a 28.9 percent growth rate, expanding from 10 stores outside the United States in 1993 to 1,603 international stores in 2005. Currently, he said Wal-Mart has 5,708 total stores around the world, 3,702 of them in this country.

Fitzsimmons listed the company's seven different formats from largest to smallest as: food and drug, supercenters, restaurants, general merchandise/discount, Sam's Clubs, apparel and limited assortment food stores. He said that Wal-Mart needs different forms of infrastructure in order to handle all these formats. There are 53 distribution facilities outside the United States and numerous global procurement offices around the world.

He mentioned having “great” brands as being part of the company's growth strategy, with 25 percent of its current sales derived from private label programs. Other departments and/or teams that have been established to facilitate growth are the supplier development office, mergers and acquisitions, strategy and integration, and format and development.

“We believe that there are a number of countries we currently operate in where we can grow tremendously,” added Fitzsimmons, citing the examples of Brazil and China. Wal-Mart only operates 44 stores in China, but plans to dramatically grow this number.

“We're also not in a lot of places yet and feel that we can grow into many new markets with our track record of growing steadily and profitably,” he continued. “We plan to give the world a better lifestyle by providing goods at a more affordable price.”

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