As Walmart
The big-box retailer, known for competing with value, has turned five of its SuperCenters into flagship stores with the remodeled look. They are located in Teterboro and North Bergen in New Jersey; Yaphank, New York; Quakertown, Pennsylvania.; and Hodgkins, Illinois. All of the flagships have debuted in the past three months — with North Bergen and Teterboro opening in mid-January.
And at least one more is on the way soon: A remodel of the store in Secaucus, New Jersey, is set for next month.
Walmart’s snazzier look is part of a broader effort to sell more discretionary items — like jeans, lipstick and baby strollers — that usually carry a higher profit margin than groceries. Last summer, it tested the sleeker model at one of its big-box stores in Springdale, Arkansas, a close drive from its corporate headquarters.
Alvis Washington, Walmart’s vice president of marketing, store design, innovation and experience, said it was time to bring the look to other markets after getting positive feedback in Arkansas. In company surveys, he said nearly every shopper said the store’s displays and mannequins encouraged them to browse longer.
“They appreciate the fact that we’re still true to who we are as Walmart,” he said. “Great prices. But then also we now have these new brands that we’re actually showcasing in inspirational ways.”
The company is remodeling the stores — and riffing off some store features of rival Target
Those shoppers could become a fresh audience for Walmart’s exclusive brands, such as a style and value-oriented activewear brand, Love & Sports, developed with fashion designer Michelle Smith and SoulCycle instructor Stacey Griffith, and a kitchen and home decor line called Beautiful, which was developed with Drew Barrymore. It also has an assortment of clothing from national brands, such as Levi Strauss, Wrangler and Reebok.
“They were kind of a one-trick pony,” said Scott Mushkin, a retail analyst and CEO of R5 Capital. “They were always about price and what they’re now doing is, yes, they still lead on price. But they’re starting to accelerate the dynamics in stores that matter to other people, along with value.”
He said it is notable Walmart chose to remodel some of the stores near New York City, a competitive market where it has struggled with previous efforts to gain traction.
Mushkin had been a critic of Walmart for its sloppy stores, but has changed his tune. He said store leaders and employees have turned things around. And he said that along with sharper-looking shelves and neater displays, Walmart has shown its savvy by working more with well-recognized brands and developing more stylish private brands.
Walmart declined to say how many of its approximately 4,700 U.S. stores will get the new look. Through a spokesperson, the company said it will share its plans for remodels and capital expenditures for the fiscal year when it reports earnings in late February. The company would not say how much it spent on the changes, nor how the cost compares to other remodels.
Already, though, Washington said some elements of the remodeled store — such as displays that show off Walmart’s apparel brands — were added to 30 stores.
The retailer has done nearly 500 store remodels in the U.S. as of the third quarter, which ended Oct. 31. It did about 600 last fiscal year and about 500 in the previous fiscal year.
Yet Walmart must prove its remodeled stores can persuade shoppers to spend, even as they feel the pinch of inflation and think twice about buying more than they need. Walmart CEO Doug McMillon said in a CNBC interview this summer that even wealthier customers are more price-conscious because of high inflation.
The company revised its outlook for the fiscal year, which ends in late January, saying it expects same-store sales to be higher in the U.S. but profit margins to be lower as shoppers buy more food and fewer discretionary items.
Washington declined to share data about Walmart’s store traffic and sales at its Springdale store and other flagships that have opened in recent months.
Yet its new store design appears to resonate with shoppers, according to data from Placer.ai, an analytics firm that uses anonymized data from mobile devices to estimate overall visits to locations.
Visits to its Walmart store in Springdale, Ark. — the original prototype — have been much higher than what an average Walmart or Target location receives. In the fourth quarter, the store received 31.2% more visits than the average Walmart received during that period. It received 66.6% more visits than the average Target received during that time.
Some of that additional foot traffic may come from Walmart’s hometown advantage and having many employees who live nearby and shop the store.
But the new layout is winning some converts beyond Arkansas, too.
Victor Millan, of Ridgefield Park, New Jersey, makes weekly shopping trips to the Walmart in Teterboro for groceries and other items. Since the store debuted its new look about two weeks ago, the 45-year-old father of four said he has spent more time in the new-look Walmart — about twice as long per visit, from about a half hour to closer to an hour.
On Thursday, as he looked for a pair of Wrangler jeans, Millan said he feels like the store now offers higher quality clothing, and a lot of it.
“I’m not a fan of shopping for clothes,” he said, “but they have so many things.”
