Walmart storeWal-Mart Stores (WMT) is thinking outside the big box in an effort to reverse a decline in sales.

The world's largest retailer plans to increase the number of its smaller-format stores and cut the size of new SuperCenters to expand to new markets and boost sales, especially among the lower-income households it considers its base customers.

"Were we see a customer need, we're going to go," said Bill Simon the newly appointed president and CEO of Walmart U.S.

Speaking to a meeting with investors, Simon said Walmart plans to open 30 to 40 smaller-format stores across the country during the fiscal year, mostly in urban markets where the big-box retailer has had trouble fitting in before. The SuperCenters, normally around 195,000 square feet, will remain the company's mainstay, but new ones will shrink slightly to about 180,000 square feet, and Walmart will step up its plans to open midsize stores of about 150,000 square feet.

Overall, with attrition and closings, the company's square footage is expected to stay flat from this fiscal year to the next, even as it expands its number of stores.

Adapting With Online Expansion, Free Shipping

"We believe with this optimized assortment of three formats we will have access to parts of the country that we could not do before," Simon said. For example, he noted Walmart had faced a challenge when trying to set up stores in Chicago, but was able to gain community support when it presented a plan that included 25 stores of different sizes and focused on the jobs it would create in the city.

Walmart is also expanding its online functions to boost Internet sales, said Simon. He noted that a test with FedEx (FDX) offering free shipping to FedEx Office locations in Los Angeles and Boston will be expanded to New York, Chicago and Washington, D.C. Additionally, a service offering same-day in-store pickup on online orders that's being tested in Salt Lake City will expand to 750 other stores across the country in the coming months and should be available in most of those locations by the holidays.

Walmart sees an opportunity to increase sales from new stores, especially in urban areas, but also in small towns that could not support a SuperCenter, said Simon. That will also help improve the company's relationships with some suppliers, which had reoriented themselves toward other retailers earlier this year after Walmart decided to reduce the number of items it carried in an effort to cut costs and boost profits.

Simon said the retailer's recent drop in comparable sales (for stores open at least a year) has been misinterpreted as a defection by high-income shoppers it gained during the recession. In reality, he said Walmart's sales to households with incomes over $70,000 have remained strong, but sales to middle-class customers with household incomes between $50,000 and $70,000 are slipping. The "paycheck cycle," where sales surge after the delivery of unemployment and assistance payments, continues to be noticeable, he said.

"In this environment, we should be thriving," said Simon. "And we're gearing up to do that."

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erik60505

walmart is called "great value" now (formerly wally world)as everything I want is not the brand I want but there is always a "great value" version. some is ok but never as good. Need selection. That is what they lost.

October 26 2010 at 4:01 PM Report abuse +1 rate up rate down Reply
javajunkie100

For those of you who say that Walmart employees are rude, unfriendly or whatever...have you ever tried being friendly to them? Maybe they're tired after being on their feet all day. I always smile and say "How are you?" I don't treat them like I'm better then they are because they work at Walmart and they're always friendly to me. They're people, too, just doing their job, just like you. I also chitchat with the janitors at work. Why not? What if you lost your job and had to take a job at Walmart or KMart or wherever so you could pay your bills? Would that make you a lesser person? We're all just doing what we have to to take care of our families.

October 15 2010 at 2:38 PM Report abuse +1 rate up rate down Reply
javajunkie100

I don't understand all this Wal-Mart bashing. We have nothing but good things to say about the Wal-Marts near us (Davenport, IA and Moline, IL). They have a huge selection of products and the food is the same quality as at the other grocery stores, but we save tons of money by buying our food there. We haven't had raises in at least 10 years, but the cost of everything keeps going up, so, sorry, but we do what we need to to make ends meet. The people who work there are always friendly and checkout is just as fast as at any other stores.

October 15 2010 at 2:28 PM Report abuse +1 rate up rate down Reply
barb88011

I'm not surprised that sales are declining at Wal-Mart. They have gotten way too greedy for the almighty buck lately. My husband and I shop there once a week and it's impossible to budget your grocery money because the prices on the items increase each week. I have found better bargains at other supermarkets so they're not giving us such a big break. When you comment on the price increase they always seem to use the same excuse.........gas prices are going up. That's a lot of bunk and I'm not buying that either. Also when I find something on the shelf that I like and it's healthy, within the next fw weeks it's off the shelves. Go figure.

October 15 2010 at 2:23 PM Report abuse +2 rate up rate down Reply
MOUNTINANGEL

I really want to be able to pay for an item at a local store or on-line, and allow my sisters to pick that item up in another state! Would make Christmas shopping alot eaiser. Mailing gifts have make it impossible to be cost worthy for heavy or larger items!

October 15 2010 at 2:06 PM Report abuse -2 rate up rate down Reply
virginia keyser

I never cared for walmart because the how they treat their employees. Plus they are not union and they do not give them for their future when they want to retire. I did go in walmart to see what they did to the store. Well this one is in Ferguson. I do not like it at all. It looks like a store for mainly food. Its not like it use to be. I understand for change but this is not good. I like to go look for clothes, toys things for my home or yard. I don't like it. Iwill stay out of that store. I won't shop there. I will go to Target. Besides it has been two years since I was in walmrt untill the other day, that is the last time. Good Luck to those whom work there.

October 15 2010 at 1:37 PM Report abuse rate up rate down Reply
Claud

That's nothing new..........Our local Greedymart(copyright, lol) has eliminated many items or departments......And raised prices to boot. And all along advertising on the tube that they were "rollin back prices"...........Yea, maybe on ice cream......

October 15 2010 at 1:18 PM Report abuse +1 rate up rate down Reply
Chatzey

6% or more increase in everything not the Wal-Mart SAM built..he has to be turning in his grave to see what they've done to his stores! I shopped there for the bargains...NO MORE....they make it impossible to shop there for OUT OF STOCK or MANY ITEMS NO LONGER CARRIED! I"ll stick with PRICE CHOPPER/TARGET/even K-MART where a SALE beats WalMart EVERY TIME! Try getting in and out of W-M in less than an hour...fewer cashiers and fewer on the floor not helpful at all. I think W-M is on the way out in our area and won't say I'm sorry to see them GONE! POOR CUSTOMER SERVICE AND MOST OF THE STOCK GONE NOT MY PLACE TO SHOP OR SPEND MY MONEY~

October 15 2010 at 1:08 PM Report abuse +4 rate up rate down Reply
1 reply to Chatzey's comment
xvogan

A-men! I don't shop in our Barf-mart at ALL any more! The customer service is worse than aweful, the associates are downright RUDE! They just don't care. And at minimum wage or near to it, what's the incentive for them to try at all?! If I absolutely NEED something from there, I send my husband in, and he's getting to where he almost wont go in either! If you NEED it, the shelf is empty, so we just shop elsewhere! Things may be someteen cents more, but they have it in stock! How much more do you spend in gas driving back to the store over and over waiting for the underpayed/understaffed associates to get to it and get it put out?! Other grocery stores in our area have their own "store brands", and great incentives to shop THERE, (gas coupons, points toward in store coupons, bonus points for re-useable bags, AND hand sanitize wipes at the cart stalls) so why bother feeding that corporate monster?

October 15 2010 at 1:59 PM Report abuse +1 rate up rate down Reply
kblank7

I think shrinking the stores is a great idea! Senior citizens especially have problems with so much walking on the concret floors. The large stores are laid out so you have to travel the entire store to get everything you need. I realize it is a marketing technique to expose consumers to more "stuff" thus increasing impluse buying but for those of us who are not interested in being impulsed, it is a royal pain. Also, since the large super stores came to be, customer service has gone to pot. Nobody seems to know where anything in the store is located so you are sent all over the place because frankly, nobody wants to take time to help you in the first place. This, of course, depends on your luck of finding anybody to help you in the first place.

October 15 2010 at 12:57 PM Report abuse +1 rate up rate down Reply
siltron1011

Dumped the pharmacy last week..sucks!!..out of stock...out of stock....out of stock!!.....and every excuse they could think of.

October 15 2010 at 12:54 PM Report abuse +2 rate up rate down Reply
1 reply to siltron1011's comment
MOUNTINANGEL

My husband is very ill. He does not qualify for "ANY" insurance in existance! We "LOVE" the $4.00 RX's and have never had any problem with anyone in the store. Yes they are dropping alot of brands. Who needs 24 flavors of lip gloss anyway!!!!!!!

October 15 2010 at 2:13 PM Report abuse +2 rate up rate down Reply