Wal-Mart to Acquire Retailers with Small Stores
According to executives of Wal-Mart Stores Inc., the company is likely to acquire retailers who own small stores, in an attempt to make a turnaround of their weakening business in the U.S. Next week, it is slated to start the construction of its first Express store in Gentry, Arkansas.
In an investor conference hosted by Bank of America Corp., the biggest retailer in the world emphasized their plan to build more small stores in the coming years.
The company had been into a tough competition with the country’s drug stores and dollar chains, which often considered convenient by many consumers. The company mentioned that the sales of their new stores that they just opened for a year dropped 1.8 percent. A drop of 0.5 percent had been shown in overall sales of Wal-Mart stores in the U.S. Last month, the company said they are planning to open some 30 to 40 small stores in 2011.
Meanwhile, aside from the Express store to be constructed next week, the company is also scheduled to build similar stores in nearby Gravette and Prairie Grove over the next couple of weeks. The new stores will be featuring groceries and a pharmacy section.
Wal-Mart, which is in the move to jump-start the growth of its revenue after seeing seventh-straight quarters of dropping sales, will open Wal-Mart Express stores in the second quarter of this year in rural and urban areas. The company did not mention further details regarding this plan. Wal-Mart will be testing different product mixes in the initial stores to check if they can compete with products available in convenient stores.
In its plan to acquire small retailers, Wal-Mart is expected by analysts to face regulatory challenges because it has already a dominant market share. However, Bill Simon, chief executive officer of Wal-Mart, anticipates the company to be able to acquire those retailers because it has not penetrated cities like New York.
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