How Wal-Mart plans to retain its new customers(70064)

Remodeling Walmart

World s largest retail chain is making changes to its stores to retain the new customers it s captured since the beginning of the recession

The recession brought many middle-class customers to Walmart for the first time. Now that the economy has shown some improvement, the discount retailer is trying to keep them coming back, in part by giving stores a fresh new look.

Called "Project Impact," the effort began in 2008, and the company hopes to have all stores remodeled by 2013.

"It's all about making shopping easier for the customer," said Bill Wertz, a regional spokesman for Wal-Mart Stores Inc.

Changes include vibrant paint schemes inside, better lighting, wider aisles, easy-to-read signs and fewer in-aisle displays. In addition, some departments are being moved to be more convenient for shoppers, such as the shift of pet supplies to the grocery section of the remodeled stores. And displays have been altered to place more products within shoppers' line of sight.

Wertz said the changes are based on continuous surveying of customers on whether the layout is convenient.

Wal-Mart is also changing its signs to reflect its new retail name - removing the hyphen and adding a star.

"The name doesn't have the military-looking feel to it, and the blue is softer," said Joseph Feldman, retail analyst at Telsey Advisory Group in New York. "People start to feel like they're in Target, but it's blue. It's a more-inviting Walmart."

Stores in Ohio that have been remodeled are in Canal Winchester, Reynoldsburg, Hilliard, Bellefontaine, Lima, Mansfield, Marietta, Marysville and Sidney. The Grove City and Marion Walmarts will be renovated by September.

Since April, more than 230 Walmarts nationwide have undergone the remodeling. Wal-Mart hopes to have half of the U.S. redesign complete by the end of September.

In Reynoldsburg, the remodel of the 10-year-old store was completed April 23.

"It's been very well-received," said Frank Curnutte, store manager.

Changes at that store included replacing cash registers and adding more self-checkout units.

"The customers seem to like it, and the most positive comments were for the repaved and restriped parking lot," Curnutte said.

Doug Hays, store manager in Canal Winchester, said his store's remodel was completed July 2. The electronics department expanded, the ready-to-assemble furniture section is smaller and the shoe department was moved to the middle of apparel.

"The biggest adjustment is people don't know where things are," Hays said.

While Wal-Mart declined to reveal the cost of the remodeling project, Curnutte said, "It was a substantial commitment from the company. They are very committed to making sure stores are maintained."

Shoppers at the Marion Walmart can look forward to the completion of its remodel by the end of September. It's been six years since the location has been updated, said Ron Wilson, store manager. Most stores remodel after that time span because of wear and tear.

While some departments in Marion, such as clothing and toys, are decreasing in size, others, such as electronics, are expanding.

"We look at the company as a whole to find out where people are shopping," Wilson said.

The changes have already begun helping Walmart's bottom line, said retail analyst Feldman. Sales at remodeled Walmarts are up 1percent to 2percent compared with stores that have yet to be updated.

"It's a big improvement for the company and has been driving traffic," Feldman said. "It's resonating with consumers that Walmart is a nice, engaging place to shop."

Other analysts have mixed feelings on Project Impact.

"Wal-Mart should be cautious in the redesign to remember who they are," said Howard Davidowitz, chairman and retail analyst at Davidowitz & Associates, Inc., in New York.

He said the upscale design makes the stores appear more glamorous but mainly, Wal-Mart is a food seller. "They can't appear expensive. It's got everyone confused."

Remodeling is necessary to keep things fresh, Davidowitz said, but should focus on what the company is about, which is price and assortment.

How Wal-Mart plans to retain its new customers

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