Pamela RiemenschneiderWal-Mart Stores Inc. plans to expand the number of small format Neighborhood Market stores, like this one in Lake Oswego, Ore. Neighborhood Markets average around 1/4 to 1/3 the size of a Wal-Mart Supercenter. Positive sales gains reportedly have Bentonville, Ark.-based Wal-Mart Stores Inc. considering a significant expansion of its Neighborhood Market small format.
The company said during a presentation at its Oct. 15 investor conference it plans to expand the concept by 400 or more stores by 2017. It currently has 306 stores, according to the presentation.
Neighborhood Market stores average around 35,000 to 40,000 square feet, compared to nearly 200,000 square feet for a Wal-Mart Supercenter.
David Livingston, a Pewaukee, Wis.-based retail analyst said Neighborhood Markets perform above the industry average.
“In my opinion, the sales per square foot is slightly less than the sales per square foot of the food and drug operations areas of Supercenters,” he said. “Supercenters often run about 50% higher versus other competitors. Neighborhood Markets … not as much, maybe only 20% to 30% above average.”
The concept targets middle to lower incomes, with dense populations and high traffic.
The company reported strong performance for its Neighborhood Market and Wal-Mart Express formats during the conference. Second quarter same store sales were up 3% for Neighborhood Markets and sales were up 30%.
The company also said it posted market share gains in meat and produce during the 13 weeks ending July 27, according to Nielsen Perishables Group.