April 20, 2024

Wal-Mart to Test Small Store Format

Wal-Mart said it would introduce a small-store format, called Wal-Mart Express, aimed at rural and urban areas without nearby grocery stores.

The first prototype store, set to open next week in Gentry, stands 15 to 20 feet tall and has 45 parking places — a big change from the typical Wal-Mart superstore with high ceilings and vast parking spots. Later this summer, two express stores will test the market in Chicago.

The smaller format will contain about 15,000 square feet of space, rather than the typical 100,000 square feet of the superstores. Wal-Mart already operates smaller stores of 40,000 square feet that it calls neighborhood market stores.

By the end of the year, there will be 15 Wal-Mart Express stores nationwide, said Anthony Hucker, vice president for strategy and business development at Wal-Mart. Mr. Hucker said that the express stores were inspired by Wal-Mart’s small stores in countries like Brazil, Mexico and Argentina.

Analysts at Janney Capital Markets said in a report this week that express stores and neighborhood markets would help extend reach and might just be the right ingredient to turn Wal-Mart around.

“We believe the concept has substantial opportunity to drive incremental sales,” the report said. “The key is finding a model with acceptable returns.”

If the Chicago stores perform well, there is a possibility that Wal-Mart will seek to put express stores in neighborhoods in Manhattan or elsewhere in New York City, said Steve Restivo, a spokesman for Wal-Mart.

Wal-Mart has no plans to enter New York City yet. But the international retail chain has been looking at possible sites in the five boroughs for some time.

Wal-Mart has faced considerable opposition to opening stores in the city, particularly from labor unions.

No official advertising numbers are available, but Wal-Mart is estimated to have spent millions of dollars to mail print advertisements and produce TV ads to sell Wal-Mart to New Yorkers.

But Mr. Restivo said there was pent-up demand among shoppers for such stores. He cited a Quinnipiac University poll in March that showed 57 percent of New York City residents wanted Wal-Mart. Mr. Restivo said city residents often drive to Long Island and northern New Jersey to shop.

The company found that in 2010, New York City residents spent $195 million at Wal-Mart, Mr. Restivo said.

“Small stores are going to be a very good growth opportunity for us because they allow us to get access in places we are not in today,” said William S. Simon, president and chief executive of Wal-Mart’s domestic business.

The chain’s express stores will have 11,000 to 13,000 items, compared with the more than 100,000 items in a supercenter. In Gentry, the first aisle is lined with fresh foods: fruit, vegetables, meats and a cooler section holding eggs, butter and other products.

Other items include bedding, greeting cards and office supplies, as well as features like a pharmacy and a check-cashing counter. Customers can also order products from a Wal-Mart warehouse to be shipped to a store for pickup.

Article source: http://feeds.nytimes.com/click.phdo?i=82681d993ac45ebf6d63333a7577babf

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