US retail giant Walmart will open around 30 high-quality stores and additional distribution centres in China this year as part of the company’s the three-year growth plan announced last October, the world’s biggest retailer said on Tuesday. It’s also planning to invest around CNY580 million to remodel over 55 existing stores in 2014 to enhance store operations and optimize customer experience.
Last October, Walmart announced plans to accelerate development in China by opening up to 110 new facilities in 2014-2016, including stores and DCs, creating nearly 19,000 new jobs. The new stores will be made up of Walmart Supercentres and Sam’s Clubs.
Supercentres will not only continue to open in first and second tier cities, such as Shanghai, Changchun, Wuhan, Changsha, but also open in more third and fourth tier cities, including Fuyang of Zhejiang Province, Xingtai of Hebei Province, Chifeng of Inner Mongolia and Nanchang County of Jiangxi Province. "This will allow the company to better serve emerging groups of customers created by the country’s urbanisation," the company said in a statement.
Walmart is planning two new Sam’s Clubs in China, located in Wuhan of Hubei Province and Changzhou of Jiangsu Province. According to the incoming President and CEO of Walmart China Sean Clarke, Sam’s outlook is promising. "Since this business model is especially relevant to burgeoning middle-income and upper-income consumers and many cities are well-suited for this format, the growth of the Sam’s Clubs in Walmart China’s portfolio will be strong for years to come," said Clarke.
In addition to opening new stores, Walmart plans to invest CNY580 million this year in improving the quality of over 55 existing stores through a robust remodelling program, further increasing the pace of remodels, up from 31 and 45 stores in 2012 and 2013 respectively. Remodels consist of adapting better layouts to improve customer flow, repairs and equipment updates, improved parking and access, and increased sustainability features to reduce energy consumption. Such moves are expected to both enhance customers’ shopping experience and improve in-store productivity.
Clarke also announced that Walmart is also continuing to invest in the expansion of its logistics network in China: "A highly-efficient supply chain is the foundation of a successful retail business, and our customers will benefit from improved quality assurance and food safety, reduced costs, and better in-stock."
"The retail market today requires more efficient and quality growth rather than a few years ago. We are adapting to the market by transforming and upgrading our business, which is essential to our long term development in China. These efforts will allow us to focus more resources to build and operate high-quality stores and expanding our distribution network aim to further improve the efficiency and lay a solid business foundation for our business in China, he added.
Walmart currently operates over 400 stores in China and has more than 90,000 associates. Since October 2012, Walmart has implemented a number of initiatives to build a strong foundation for their business in the country. So far, progress has been made in centralising its merchandising system, optimising operational efficiency, building price leadership, simplifying business processes and strengthening the supply chain, resulting in improved profitability and performance of the company’s China business.