Big retailer goes small with Wal-Mart Express

08/19/2011 08:42:00 AM
Fred Wilkinson

Bruce BlytheWal-Mart has opened a 10,000-square-foot Express store in the Chicago neighborhood of West Chatham. CHICAGO — Wal-Mart Stores’ urban expansion has won at least one convert in Chicago schoolteacher Rachel Green.

Green, 54, said she’s visited Wal-Mart’s new Express store at least seven times since it opened July 27 in the West Chatham neighborhood on Chicago’s South Side. Because she lives across the street, the Express store is very convenient, and the prices are “extremely right,” Green said.

“A lot of people from all around come to this store,” Green said Aug. 15 in the Express parking lot while toting two small bags of groceries she’d just purchased inside.

The store’s overall selection isn’t sufficient — “just the basics,” Green said. “But if I need an extra head of lettuce or some carrots, I can just come here.”.

Wal-Mart aims to add thousands customers more like Green in coming years as the world’s biggest retailer ramps up store openings in large U.S. cities, where it has relatively little presence compared to its core rural and suburban markets. Wal-Mart Express is part of a handful of small-store formats the company is increasingly emphasizing amid languishing sales at its traditional supercenters.

At about 10,000 square feet, Express stores are one-tenth of the size of a typical supercenter, with food items comprising about two-thirds of inventory. West Chatham’s is Wal-Mart’s first big-city Express store, with three other pilot locations in northwest Arkansas, where the company is based.

“We’re very pleased with the opening of the first four Wal-Mart Express units, and the initial results are positive,” Bill Simon, chief executive of Wal-Mart’s U.S. operations, said during a conference call released Aug. 17 along with quarterly financial results.

In Chicago, Wal-Mart plans to open another eight stores, in small formats as well as supercenters, by spring 2013, the company said in a news release. Those include a supercenter in West Chatham.

The company also is targeting New York City, San Francisco and Washington, D.C., for smaller-store openings.

Within the next decade, Wal-Mart will reach saturation in the U.S. with supercenters, said Natalie Berg, global research director for Planet Retail, a London-based consultant. “Smaller stores enable them to proactively go after the urban consumer, while at the same time fighting off the pesky threat of dollar and drugstores.”

Part of Wal-Mart’s focus “is on fixing their core supercenter business,” Berg said, “And the second thing is reaching urban consumers. It’s a huge opportunity for them to grow with their existing model.”


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