There are 7 Wal-Mart stores in Memphis, Tennessee, so it’s not hard to find cheap, Chinese imports. But this week, Wal-Mart’s decision to cancel a supercenter definitely struck a discordant note with city officials. The Wal-Mart cancelled store was victim of the retailer’s shrinking growth plans. According to The Commercial Appeal newspaper, Wal-Mart will not be building a supercenter at the old Mall of Memphia. The newspaper said the rollback of the Memphis store was due to Wal-Mart’s concern “about opening too many stores too fast.” The property owner, Lehman Brothers Holdings, is now left without an anchor store. City officials were pinning their hopes on Wal-Mart as the highest use of the site, which is the former home of a 1.2 million-square-foot mall. Wal-Mart was under contract to buy 22.5 acres of the 95-acre site, and had filed a site plan for a 176,000 s.f. store with the Memphis and Shelby County Office of Planning and Development. A Wal-Mart spokesman said this week his company is no longer pursuing those plans. “We no longer have a contract on that property,” he said. This rollback in Memphis stems back to the company’s announcement at its annual stockholder’s meeting in June that it was cutting back the number of new store openings. The scaling back of new stores was a result of Wall Street concerns that the retailer’s new stores were cannibalizing sales at its existing stores. “Its not just in Memphis or Tennessee, but across the country,” the Wal-Mart spokesman explained. “The company decided to focus on existing stores and take a break on expansion.” Wal-Mart already operates store # 1031 at 5000 American Way, near the Mall of Memphis site. The Mall of Memphis had a run of about 22 years, and was once a major retail destination. Ironically, the Mall’s anchor stores like Dillard’s and JC Penney closed, in part, due to shoppers going to Wal-Mart.
Wal-Mart is now choosing to cancel projects rather than eat into its own sales. This new strategy was dictated more by Wall Street stock analysts, than by the retailer’s management. In the Wal-Mart annual report sent to stockholders in May of 2007, there was no hint that the company was going to hit the brakes. But Wall Street applauded when the retailer suddenly announced at its Fayetteville, Arkansas meeting that its growth plans were being shrunk. More and more proposed new superstores are being pulled, and the company is saying repeatedly that it will focus on expanding existing stores, rather than breaking new ground. This is good news for citizens groups who can take credit for slowing down the giant. City officials in Memphis want to fill up their dead mall, but the fact is, the city is already swarming with Wal-Marts, and had this one opened, the discount store on American Way would have closed. Wal-Mart already has 13 dead stores in Tennessee, totaling 876,913 s.f of dead stores — or enough to fill 15 football fields. It’s time for Wal-Mart to sing a new tune in Memphis.
