News

Dollar General to build 13th DC in San Antonio

BY Michael Johnsen

 

GOODLETTSVILLE, Tenn. — Dollar General on Thursday announced plans to build a new state-of-the-art distribution center in San Antonio. It will be the 13th facility in the retailer’s growing distribution network.
 
“This distribution center is another important investment in the growth of Dollar General and our substantial presence in Texas where we have nearly 1,200 stores and more than 9,400 employees,” said Rick Dreiling, chairman and CEO of Dollar General. “We operate more stores in the Lone Star state than in any other state and we have found Texas is a great place to do business. We are proud to continue investing in the economic growth of Texas and we look forward to bringing an additional 530 jobs to Bexar County.”
 
The company has begun the process of preparing the land to build a 900,000+ square-foot facility on 110 acres at South Foster Industrial Park. At full capacity, the Dollar General facility is expected to serve more than 1,000 stores in Texas and the surrounding region. Dollar General plans to begin hiring in summer 2015 with operations expected to begin in October 2015.
 
Dollar General currently has 61 stores in Bexar County with more than 460 employees. With the completion of this project, Dollar General expects to have nearly 1,000 employees in Bexar County. Additionally, Dollar General’s third-party transportation provider expects to employ 90 drivers.
 
“On behalf of the San Antonio Economic Development Foundation, we are pleased that Dollar General chose to locate its newest distribution center in Bexar County,” stated San Antonio Economic Development Foundation Chair Steve Waters. “The Institute for Economic Development at UTSA has estimated the economic impact of this investment to exceed $750 million over the next 10 years. When fully realized, these 500-plus jobs will contribute to prosperity in Bexar County and the surrounding area in the coming years.”
 
“The distribution center will serve as a great anchor for the South Foster Industrial Park, and further solidify Bexar County’s stature as a prime logistics hub,” County Judge Nelson Wolff said.
 
Dollar General’s 12 other distribution centers are located in Alabama, California, Florida, Indiana, Kentucky, Mississippi, Missouri, Ohio, Oklahoma, Pennsylvania, South Carolina and Virginia.
 

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Which area of the industry do you think Amazon's entry would shake up the most?
News

Supervalu records $4 billion in Q2 sales, up 1.8%

BY Michael Johnsen

MINNEAPOLIS — Supervalu on Thursday reported second-quarter fiscal 2015 net sales of $4 billion and net earnings from continuing operations of $31 million.
 
"Midway through fiscal 2015, I am encouraged with the progress we have made across the business,” said president and CEO Sam Duncan. “The investments we have made at Save-A-Lot continue to drive sales and our Retail Food stores recorded their third consecutive quarter of positive identical store sales. The addition of the Rainbow stores this past quarter is a positive for our Independent Business and we are encouraged by the early results.”
 
Second quarter retail food net sales were $1.1 billion, up 2.8%. Identical store sales were positive 0.4%. Retail food operating earnings in the second quarter were $20 million, or 1.8% of net sales. Last year’s retail food operating earnings were $7 million, or 0.8% of net sales. The increase in retail food operating earnings was primarily driven by the benefit of lower levels of shrink and promotional spending.
 
Overall, second quarter net sales were up 1.8%. Identical store sales in the Save-A-Lot network were positive 6.5%. Identical store sales for corporate stores within the Save-A-Lot network were positive 8.2%. Total sales within the independent business segment decreased 1.1%. Fees earned under the transition services agreements in the second quarter were $44 million compared to $62 million last year.
 
Gross profit for the second quarter was $572 million, or 14.2% of net sales. Last year’s second quarter gross profit was $576 million, or 14.6% of net sales. The decrease in gross profit rate compared to last year was primarily driven by lower fees earned under the TSA, predominantly related to the one-year transition fee earned under the TSA in fiscal 2014 of $60 million of which $18 million was recognized in the second quarter of fiscal 2014.
 
 
 
 
keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Which area of the industry do you think Amazon's entry would shake up the most?
News

Walmart cuts back U.S. supercenter growth, ups e-commerce spending

BY Marianne Wilson

Bentonville, Ark. — Walmart is planning to sharply cut back the growth of its U.S. supercenters in favor of smaller-format stores and accelerated e-commerce and digital investments. The discounter told investors at its annual analysts meeting that it plans to open 60 to 70 supercenters during its next fiscal year, down from the planned 120 this year, and 200 to 220 smaller-format stores. In all, it will add between 26 and 30 million net retail sq. ft. worldwide next year, down from an estimated 32 to 34 million sq. ft. this year, due to a moderation of large-format store growth and accelerated e-commerce investments.

The world’s largest retailer cut guidance for 2015, saying that it expected growth of 2% to 3% compared with previous estimates of 3% to 5%.

"There is no excuse for us not to be doing better," Walmart Stores CEO Doug McMillon said during the analysts meeting. McMillon, who took over the reins from Mike Duke in February, has been accelerating the company's push to redefine its role in a fast-changing retailing environment. "We recognize our situation has changed and we're responding accordingly," he said.

Walmart’s total capital spending for fiscal year 2016 (which starts Feb. 1, 2015) is projected to range between $11.6 and $12.9 billion, including approximately $1.2 to $1.5 billion for e-commerce and digital initiatives, up from some $1.0 billion this year.

“Our business and customers continue to evolve and so will the way we deploy capital,” said Walmart CFO Charles Holley.  “We will invest more heavily in e-commerce initiatives, while temporarily moderating our global physical growth, particularly larger stores. We are focused on creating an endless aisle and appealing to our customers’ changing needs.”

The chain expects to finish this year with approximately $12.5 billion in global e-commerce sales.

“Looking forward we expect an increase in global e-commerce sales of around 25% in fiscal year 2016, and we anticipate growth over the three-year period from fiscal years 2016 through 2018 to average 30% to 40%,” Holley said. “The greatest investment of capital and in operating loss for our e-commerce operations will come over the next 18 to 24 months, and then we would expect to see that investment start to moderate in fiscal 2018.”

In line with its increased online emphasis, Walmart next year will build new online fulfillment centers in Georgia and Pennsylvania, each over 1 million sq. ft. The centers will be part of the company’s next generation fulfillment network that includes dedicated online fulfillment centers, shared distribution centers and ship-from-store locations that are all tied together with its transportation networks in the country. Walmart will also add new fulfillment centers in Brazil and China.

The company expects net sales to increase by 2% to 4% next year, which translates into approximately $10 to $20 billion of net sales growth, Holley said.

“Operating expenses will grow at a rate somewhat faster than sales growth and operating income will be flat to slightly down, given our investments in technology, e-commerce and digital,” he said.

In other meeting highlights:

  • Walmart U.S. now expects to open approximately 240 small-format units in fiscal 2015 and carry over approximately 20 units into fiscal 2016.
  • The company confirmed rumors that it is rebranding Walmart Express as Neighborhood Market, which will serve as its brand for all small-format stores, regardless of square footage.
  • During fiscal year 2016, Sam’s Club will open approximately nine to 12 clubs, including relocations and expansions. Remodeling is slated for between 60 and 65 clubs.

“We are reducing the number of new club openings for next year and accelerating technology initiatives that integrate our physical locations with our digital capabilities,” said Sam’s Club president and CEO Rosalind Brewer.

  • Globally, Walmart International will continue to invest in organic growth across its markets next year. Capital expenditures are expected to range between $3.7 and $4.2 billion. New store openings in fiscal 2016 are expected to add between 10 and 13 million sq. ft.
  • The company also expects fiscal year 2016 net sales growth to range between 2% and 4%, which translates into approximately $10 to $20 billion in net sales.

In the short term, perking up sales at its U.S. Walmart business means keeping items that shoppers want in stock and speeding up checkout lines. This holiday shopping season, Walmart says it will open more cash registers than ever. It also needs to get better with its prices.

In the long term, the company is dissecting every part of its business as it continues to test and learn what works. One big change: Walmart has ended its program of tethering its small stores with its supercenters. The purpose was to use the big stores as distribution hubs to supply goods for the smaller locations. But Walmart said the model wasn't sustainable.

"I really believe our future is bright," McMillon said. "There are so many ideas percolating around."

Greg Foran, the former Walmart Asia chief who recently became head of the U.S. Walmart division, told investors that when he first started his new job he asked managers to send him three ideas for how it could improve business. He received 3,000 emails and noted that he's been taking action. One area is improving the freshness of its produce.

But the big change is how Walmart is taking a hard look at its fleet of more than 4,000 stores in the U.S.

Foran told investors that supercenters, which average about 180,000 sq. ft. and carry general merchandise, food and pharmacy items, are still important. But Walmart needs to think about how they should look.

As for its smaller stores, the company also plans to add 180 to 200 Neighborhood Markets next year, from 170 stores scheduled for this year. It's reducing growth of its smaller Walmart Express stores. It plans to open 20 stores next year, down from the expected 70 this year. Walmart Express stores are about 12,000 sq. ft., while the Neighborhood Markets average about 40,000 sq. ft.

It's also rebranding Walmart Express stores to Neighborhood Markets, while reducing its offerings in seldom-purchased items, such as shower curtains, and stocking more items that shoppers want every day, such as diapers.

The company plans to add nine to 12 Sam's Clubs in its next fiscal year, down from the planned 20 new clubs for this fiscal year.

 

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Which area of the industry do you think Amazon's entry would shake up the most?