• Ad Age, Monday, October 19, 2009 10:38 AM

Wal-Mart's redesigned, less-clutter-filled shopping environment may be making the aisles easier to navigate for shoppers but removing millions of square feet of prime merchandising space is also having a negative impact on sales, Jack Neff reports.

"Project Impact," as the five-year push is called, includes updated signage, new layouts with wide-open aisles, more space for categories such as electronics and baby care, lower fixtures and an all-around brighter appearance. But is also removes pallet-sized merchandising displays featuring stuffed goodies like $5 DVDs and health and beauty aids, which some analysts feel is partly responsible for a substantial slowdown in U.S. sales.

The Impact stores look a lot like Target stores, Neff points out, which may have something to do with the fact that the initiative has been led largely by chief merchandising officer John Fleming, a Target veteran. The trouble is that Wal-Mart has always enjoyed considerably better sales per square foot than Target, partly because of the displays.

Wal-Mart declined to comment beyond reiterating that its executives have been upbeat about the results of Project Impact.

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