Wal-Mart (NYSE: WMT) Hopes to Expand to San Francisco

Wal-Mart Stores Inc. (NYSE: WMT) is hoping to open two dozen stores in the San Francisco Bay area as part of its new “urban strategy”, according to a report from the San Francisco Chronicle.

Although the cities that Wal-Mart hopes to open stores in have traditionally been somewhat hostile toward big-box stores, Wal-Mart hopes to win the cities over by smaller format stores similar to the size of Trader Joe’s and Whole Foods. The stores are expected to be primarily grocery stores with plenty of fresh foods and prepared take-out.

“Wal-Mart is throwing out their old playbook,” said Garrick Brown, VP of research at Colliers International, to the Chronicle. “They’re going after the urban market, which they haven’t been able to penetrate, mostly because of their size.” Brown said that a company source expects Wal-Mart to open between 300 and 400 new city-centric stores nation-wide.

“Smaller designs, in the 20,000 -square-foot range, and mostly groceries – that’s where the money is,” said Brown, who noted that more than half of Wal-Mart’s revenue in the United States came from grocery store sales in 2009.

Wal-Mart Stores, Inc. (Walmart) operates retail stores. The Company operates in three business segments: Walmart U.S., International and Sam’s Club. During the fiscal year ended January 31, 2010 (fiscal 2010), The Walmart U.S. segment accounted for 63.8% of its net sales, and operated retail stores in different formats in the United States, as well as Walmart’s online retail operations, walmart.com. The International segment consists of retail operations in 14 countries and Puerto Rico. During fiscal 2010, the segment generated 24.7% of the Company’s net sales. The International segment includes different formats of retail stores and restaurants, including discount stores, supercenters and Sam’s Clubs that operate outside the United States. The Sam’s Club segment consists of membership warehouse clubs in the United States and the segment’s online retail operations, samsclub.com. During fiscal 2010, Sam’s Club accounted for 11.5% of its net sales.

Shares of Wal-Mart Stores Inc. (NYSE: WMT) traded up 1.00% during mid-day trading on Monday.



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