While many in the segment have bemoaned store closures as a sign of weakness in the retail sector, one expert is taking a slightly more optimistic view of what’s next — at least in regards to one retailer in particular.
Former Walmart CEO Carter Cast believes store closures are a sign of strength for Walmart, not weakness.
“I think there are store closures ahead of Walmart that are going to be good for the company and good for shareholders,” Cast said on CNBC’s “Power Lunch.”
Cast was with Walmart for seven years — between 2000 and 2007. He believes the restructuring comes at the right time for the mega-retailer, which needs to adapt to an increasingly digital commerce era.
“I believe Walmart will continue to use the internet and grow their eCommerce sales for about 4 or 5 percent now to well over 10 percent,” Cast predicted.
Walmart, however, is something of a unique player in the space, Cast noted; some retailers simply need to scale back their physical operations to remain viable.
“There is no question: There is too much square footage in the industry now,” he said.
Cast readily conceded that Walmart is also a large holder of square footage: Over 90 percent of Americans live within 15 minutes of a Walmart. However, he noted that Walmart’s situation is different from department store players like Macy’s, which are facing difficulties on multiple fronts. Cast believes that even with cuts, Walmart would not lose its ability to provide access to most U.S. customers.