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BENTONVILLE, Ark. - The biggest stir at a two-day Wal-Mart stock analysts meeting held here this week came at a breakout session discussing the retailer's global procurement strategy. This year, the retailer opened 16 buying offices worldwide that achieved savings of 28 percent to 56 percent on the cost of directly-sourced items for global distribution
Wal-Mart remains the retail technology leader, according to one analyst in attendance at the session, George Strachan of Goldman Sachs. The chain, he told Retail Merchandiser magazine, will champion Radio Frequency Identification (RFID) chip-based technology as the costs of chips decreases. Using chips imbedded in palettes, cases and the products themselves, RFID can potentially streamline inventory tracking, receiving, stocking, and, in about five years from now, scanning functions.
Wal-Mart will add nine distribution centers in 2003, six dedicated to food. "This phenomenal increase in food distribution capacity reflects plans to drive unprecedented food volumes mostly from existing market areas, shortening the delivery radius to stores, improving overall stock and freshness of perishables," said Strachan.
Supercenters will continue to be Wal-Mart's primary growth vehicle. The retailer plans to open only about 45 to 55 new discount stores compared with 200 to 210 new supercenters in the U.S. About 140 of the new supercenters will be relocations or expansions of existing discount stores, while the rest will be built in new locations.
The retailer also plans to add 20 to 25 of its Neighborhood Market stores. Wal-Mart International intends to open 120 to 130 units in existing markets. The planned square footage growth for the upcoming fiscal year totals about 48 million square ft. of new retail space, exceeding this year's growth by 8%.