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Will Walmart Express Stores Help Boost US Sales?

Posted on | June 16, 2011 | Comments Off

Wal-Mart Stores, Inc. (WMT) has debuted its first Walmart Express store.  These stores will range in the 15,000 square foot area with regards to store size and will allow Walmart to better compete with dollar stores that have been performing well in recent years.

Dollar stores such as Family Dollar (FDO), Dollar Tree (DLTR) and Dollar General (DG) have performed well in recent years.  As the economy has strained consumers, they have turned to these outlets for basic goods.  Moreover, the locality of these stores tends to be a driver as consumers may not want to drive 20 miles to a Walmart Supercenter, but instead drive to the nearest dollar store.

The Walmart Express stores will help with the local issues.  I heard an analyst talking yesterday saying people don’t differentiate much between dollar store brands, they simply drive to the closest one to do their shopping.  This means that they’ll likely choose Walmart Experss stores if that is the closer stores.

Walmart does many things well and there is ample reason to believe that the Walmart Express stores will be executed superbly.  Initially, Walmart had only planned 30-40 Walmart Express stores to open, but now it looks like they are expanding this gameplan growing the number of stores to at least 100 in the next year.

It will be interesting to see the performance of these stores in the quarters and years ahead and I look forward to further detail from Walmart.  Moreover, it will be important to check in to see how this is helping Walmart turn around US sales which have had negative comps now for several years.