Wal-Mart Rolls Back Building of 3.2 Million Square Feet in Distribution Center Construction

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Big box retail giant, Wal-Mart Stores Incorporated (NYSE: WMT) (Bentonville, Arkansas) told contractors in late April of this year to close up shop and go home on three major distribution center projects that were being built in Texas and Florida.

Wal-Mart has plans to build three new regional general merchandising distribution centers in the U.S. in Sealy, Texas along with Arcadia and Fort Pierce Florida that will add over 3.2 million square feet of new distribution space for the company, but construction has been delayed at least a year.

Earlier this year, Wal-Mart announced plans to build over 200 new Supercenters and 55 new discount stores and nine new distribution centers that would total over 8.7 million square feet. However, it looks like the retail giant has put the cart before the horse.

Plans call for construction of a 1.2 million square foot center in Sealy and a 1.2 million square foot center in Fort Pierce. The third center, located in Arcadia, Florida is to be 880,000 square feet in size.

Jay Brunson, Food & Beverage Group Manager for Industrialinfo.com who has been tracking the companies building activities since 1997 said, "It looks as if Wal-Mart did not want these new distribution centers and over $125 million in investment to sit empty waiting for the new stores to open. The company indicated that the projects were not cancelled, just delayed for approximately one year."

The Texas Workforce Commission, the business responsible for aiding the company in staffing the centers had heard an unconfirmed report that Wal-Mart was waiting for new technology in the structural portion of the job that was to become available in one year, and would save the company millions. Wal-Mart denied that that was the case in delaying construction.

A clear timetable was not given on when construction activity will resume on the general merchandise centers and the delay did not effect construction on the six new food distribution centers.

Wal-Mart Stores Incorporated has annual sales of $244.5 billion and operates more than 2,870 discount stores, Supercenters and Neighborhood Markets, and more than 520 Sam's Clubs in the United States. Internationally, the company operates about 1,275 units. Wal-Mart employs over 1.3 million associates worldwide.