Walmart Said It Plans to Roll Out More Smaller Stores

May 28, 2012 — -- Walmart, which has arguably mastered the art of the giant big-box retail store, said it plans to roll out smaller stores throughout the U.S.

Walmart Express stores range from 12,000 to 15,000 square feet, significantly smaller than the 624 Walmart Discount stores, which average 108,000 square feet and employ about 225 people. There are an additional 3,029 Walmart Supercenters, which are even larger, and include specialty centers for vision and car repair.

Bill Simon, Walmart U.S. president and CEO, said the first 10 Walmart Express stores, which served as testers, turned profitable in their first year.

"We are pretty happy with the initial 10 that we put into the ground," Simon said during a Morgan Stanley Retail conference last week in Boston.

The first two Walmart Express test stores opened in June 2011 in northwest Arkansas, and North and South Carolina were soon added as locations.

Reports of Walmart officials shutting down a bribery investigation related to its Mexican subsidiary last month haven't dampened the company's U.S. expansion plans, at least for these smaller express stores. Walmart's audit committee is continuing to examine possible violations of the Foreign Corrupt Practices Act. The U.S. Justice Department and Securities and Exchange Commission are also investigating the allegations.

"Later this year, we will be moving to phase two to test density in a specific market," David Tovar, spokesman for Walmart, told ABC News, although the company has not yet announced which market Walmart is testing.

Simon said the Express stores were "designed as a bit of a hybrid between a food, pharmacy and convenience store. Some have gas, some don't; most have a pharmacy, but some don't."

The company said the smaller stores offer customers flexibility, especially to those who live in areas that lack larger stores.

"Now, the next phase for us is about how big could this be. And I think that's important in that we're moving into a phase where we are going to work on the construction costs and we're going to work on the distribution costs," Simon said during the conference. "Again, already profitable, but we want to get them up to what would be the fleet average, or hopefully beyond that."

Sam and Helen Walton opened the first Walmart store, which was 18,000 square feet, in 1962, and the mega retailer is in some ways returning to its roots as it gets ready to celebrate its 50th anniversary in Arkansas on June 1.

Earlier this month, the company reported higher than expected first quarter earnings. Walmart reported $3.7 billion in profit for the quarter, which ended April 30, up 9.2 percent from a year ago.