American retailers are spending billions on renovations to entice shoppers back into stores.
As the New York Times (NYT) reported Monday (May 11), companies such as Target, Walmart and Dollar General are among the chains investing more in brick-and-mortar retail.
Altogether, the largest retailers in the U.S. are expected to spend $20 billion this decade on remodeling their stores, the report added.
Nearly half of that spending comes from Walmart. The NYT points out that the retail giant has done well as it has rebranded as a place to find trendier products and clothing along with groceries and other essentials. The company began a $9 billion remodeling project in 2023, and said recently it is upgrading 650 additional supercenters and smaller stores.
As PYMNTS CEO Karen Webster has argued, Walmart’s storefront is the company’s most irreplaceable asset.
“Roughly 100 million people walk into Walmart for the most frequent, most habitual, most non-discretionary purchase in retail: their groceries,” Webster wrote earlier this year. “That foot traffic is massive. But it’s also their greatest Achilles’ Heel.”
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Few people who visit Walmart to get groceries purchase anything else, that report added. While the company’s foot traffic is enormous, its slice of the retail basket is narrow. PYMNTS Intelligence data has found that Walmart’s share of retail is declining in almost every category other than food.
Meanwhile, Target announced in March that it plans to remodel more than 130 stores this year — in addition to opening 300 new stores by 2035 — as part of its $5 billion capital investment plan.
The NYT report offers a glimpse at what those renovations look like, describing Target’s overhaul of a store in Paramus, N.J.: new lighting, an expanded grocery section, and changes to backrooms to make it easier for workers to drop off items for in-store pickup.
Also in March, Dollar General said it is planning an extensive real estate strategy that includes opening around 450 new stores and completing thousands of remodels.
“Executives said the goal is to strengthen the connection between the company’s physical footprint and its digital ecosystem,” PYMNTS wrote at the time.
The NTY report touches on the same idea: remodeling efforts to promote in-store visits can also encourage consumers to shop virtually.
“The in-store experience is still important for shaping the e-commerce brand,” David Marcotte, an analyst at research firm Kantar Retail IQ, told the newspaper. “Remodels are almost always the best way to go.”
