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Walmart Unleashes Supercenters in Bid for Grocery Dominance

Walmart Unleashes Supercenters in Bid for Grocery Dominance

BENTONVILLE, AR - With e-tailers like Amazon nipping at its heels, Walmart continues to seek new ways to leverage innovation and outside-the-box thinking as new avenues for growth and profits. Just this year, the company has accelerated overseas growth, launched an extensive store remodel initiative, and has been testing out new retail and produce aisle formats. Walmart’s President and CEO, Doug McMillon, recently revealed that the company’s efforts to stay competitive rest on its signature giant stores, something strictly e-commerce-based retailers are unable to offer consumers.

Doug McMillon, President and 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 180,000 square feet and offer 100,000 products across numerous departments, including produce and grocery. According to McMillon, these gargantuan brick-and-mortar locations can be used to support new ventures like fast delivery, health clinics, and other services, the news source reports. More than half of the 40 percent growth in U.S. e-commerce sales this past year came from expanded online grocery pickup and in-store-run delivery services, so efforts to boost those services is a prudent move.

Walmart's supercenter approach offers customers a service other e-commerce retailers are not able to offer

The company plans to increase its warehouse space and distribution support to follow through on those expanded services, evidenced by its most recent $200 million facility in Topeka, Kansas. Walmart is also reportedly 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, the retailer’s customers would have access to an expanded product selection, and Walmart would earn additional revenue through processing fees and shipping.

For some time now, Amazon has been one of Walmart’s strongest competitors, 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 only 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 dedication to both the brick-and-mortar and digital retail space. The retailer is also reportedly seeking to add more e-commerce warehouse capacity to support its next-day delivery services.

How will Walmart continue to evolve its retail strategy to compete in an ever-growing market? AndNowUKnow will keep you updated.