Seeing Concerning Trends, Walmart Launches $200M Store Renovation Drive
The world's largest company in terms of revenue and employee count will spend $200M to transform 31 stores in the country into urban supercenter concepts, CoStar reports. The first revitalized store is the Walmart Stockyards in Ontario, which will soon be followed by one in the Toronto suburb of Thornhill.
The urban supercenters contain a larger produce area with seating sections and dedicated nursing rooms, as well as a Walmart.ca section that will both field online shopping questions and host pop-up shops from online vendors, CoStar reports.
Part of the new stores' checkout sections will be converted to "fast lanes" for users of the Walmart app to pay with their phones. Floor space will also be dedicated to partners like UPS Store, a redesigned in-store McDonald's, Naoki Sushi and others. In the U.S., FedEx appears to be Walmart's parcel service partner of choice.
Walmart Canada CEO Lee Tappenden said in an announcement that the initiative is to position the company as an innovator in e-commerce integration and store design. Desjardins analyst Michael Markidis told CoStar that the move could be indicative of Walmart's desire to shore up its business at a time when its growth has been threatened.
"Walmart's large-format store footprint in North America seems to have reached a tipping point," Marikidis said. "[W]e are not suggesting that this initiative will be the catalyst for a massive wave of additional store closures in the near term, [but] we would not be surprised if certain leases expiring over the next several years are not renewed."
In Canada, Walmart has added only one store in the past two years after six years of faster growth, while it has shrunk its U.S. footprint by five stores since it peaked in January 2018, Markidis told CoStar. Markidis also projects that Amazon will accelerate its market penetration in Canada in the coming years.