Wal-Mart Boosts Investment In E-Commerce, Reduces Store Openings

Wal-Mart Stores has announced plans to focus more investments in e-Commerce and digital initiatives in FY2016 up to $1.5 billion, a 50% increase from the $1 billion estimate for FY2015.

In contrast, the retailer will add fewer store space in FY2016: approximately 30 million square feet down from 34 million in FY2015. The company expects to open between 60 and 70 supercenters and 200 to 220 Neighborhood Markets in FY2016, both reduced from the 120 supercenters and 240 Neighborhood Markets projected to be built by the end of FY2015.

“We will change the mix of our capital spend through reductions in areas we have invested in historically to fund investments in new growth opportunities,” said Doug McMillon, CEO of Walmart. “Overall capital range will be slightly lower than last year with a mix difference toward more e-Commerce dollars.”

The retailer revealed capital expenditure plans for FY2016 at the annual Investment Community meeting. Total capital spending for FY2016 is projected to range between $11.6 and $12.9 billion.

Wal-Mart also projected net sales growth for FY2015 to range between 2% and 3%, down from the 3% to 5% estimate released in October 2013.

As part of the e-Commerce investments, Wal-Mart plans to build two new 1-million-square-foot online fulfillment centers in Atlanta, Ga. and Bethlehem, Pa. The company anticipates e-Commerce growth to average 30% to 40% per year from 2016 through 2018.