Wal-Mart has announced aggressive 2003 expansion plans. Undeterred by the current economic climate, Wal-Mart is confident that its Supercenters will become the leading one-stop-shop for rural America.

In addition, the company’s Sam’s Clubs and discount stores are set to proliferate, servicing the budget-conscious. Retailers that stand in the way of this grand plan must counter-attack – or risk being run out of town.

Retail giant Wal-Mart is ploughing ahead with its growth plans for 2003. With plans for an 8% increase in selling space (about 48 million square feet of new retail area), Wal-Mart shows no fear of the sluggish economy, nor its competitors. Rather, its strong confidence in the new “Supercenter” format will likely send shockwaves through the local grocery, and the burgeoning dollar-store communities.
From February 2003 onward, Wal-Mart anticipates opening about 45-55 new discount stores and 200-210 new Supercenters. About 140 of these Supercenters will be relocations or expansions of existing Wal-Mart discount stores.
In addition, Wal-Mart hopes to open 20-25 smaller Neighborhood Market stores and 40-45 warehouse format Sam’s Club stores. About two-thirds of these Sam’s Club openings will also be relocations or expansions of existing stores. The final element of the expansion plan is 120-130 new units outside the US, all in existing Wal-Mart markets.
These expansions will place enormous pressure on other discount chains and supermarkets. Wal-Mart’s ever-increasing buying power and supply chain efficiencies are providing a level of service to consumers that regional grocers simply cannot match. The only real survival strategy open to competitors is to diversify with niche products and service offerings.
In this respect, dollar stores might show particular longevity, especially by leveraging their small size and cheap viral marketing strategies. They may also be able to turn their shorter shopping time into a competitive advantage over Wal-Mart’s cut-price outlets – along with their proximity to residential areas, which allows low-income non-drivers to visit.
These measures might help hold off Wal-Mart’s threat for a little while longer. At the same time, local grocers will have to dig a little deeper to prove their worth above and beyond Wal-Mart’s seemingly all encompassing offering.

(c) 2002 Datamonitor. All rights reserved. Republication or redistribution, including by framing or similar means, is expressly prohibited without prior written consent. Datamonitor shall not be liable for errors or delays in the content, or for any actions taken in reliance thereon.