Traditionally Walmart has been known for its big box stores that sell anything from chips to bathmats to patio furniture! However, recently Walmart has been moving towards smaller stores that are better able to cater to a specific demographic and community. For example, in a dense Toronto suburb that is characterized by high-rise housing and large households from South Asia and other visible minorities, there is no demand for gardening tools and other outdoor equipment. Therefore, why carry it? Walmart has instead built a smaller store stocked with specific products, particularly groceries, which would appeal more to this demographic. In addition, smaller stores mean lower operating costs and less capital investment.

However, thinking back to our classes on operations, less stock also means less flexibility in catering to changes in demand. There is a higher turnover rate and these stores will need to be carefully monitored to ensure stock levels are maintained.

Nevertheless Walmart hasn’t given up on its big stores yet and is said to open 125 more of its supercenters this year. I believe its mix of large and small stores is strategic as it allows Walmart to cater to different markets and still realize economies of scale.

Leanne Delap, “Small-box Walmart tailors to urban cores,” The Globe and Mail, November 12, 2013, accessed November 14, 2013, http://www.theglobeandmail.com/report-on-business/industry-news/property-report/small-box-wal-marts-tailored-to-urban-cores/article5214080/

Lydia Dishman, “Why Walmart is Betting Big on Small Stores,” Forbes Magazine, June 3, 2013, accessed November 14, 2013, http://www.forbes.com/sites/lydiadishman/2013/03/06/why-walmart-is-betting-big-on-small-stores/

Images from:

“Wal-Mart, other big boxes try out smaller boxes,” NBC News, accessed November 14, 2013, http://www.nbcnews.com/id/43414111/#.UoUZxaWPS5c

“Walmart Supercentre,” Ensign North Central Internet News, accessed November 14, 2013, http://www.ftlcomm.com/ensign/business/walmart/index.html