(Jan. 17) Plans to counter Tesco’s entry to the U.S. market are starting to surface.

The United Kingdom-based retailer launched its first Fresh & Easy Neighborhood Market stores in Southern California, Nevada and Arizona this fall.

The latest comes from Bentonville, Ark.-based Wal-Mart Stores Inc., which reportedly plans to build four test stores in Arizona.

London’s Financial Times reported the retailer plans to build 20,000-square-foot stores under the “Marketside” banner. These stores would be roughly a tenth of the size of an average SuperCenter.

In comparison, Wal-Mart’s other small format, the Neighborhood Market banner, are about 30,000 square feet.

Anna Wyatt-Moore, Wal-Mart’s director of corporate communications, said Wal-Mart is not confirming the details published in that article, but released a statement in response.

“We trial and test different ways to serve our consumers all the time and this smaller neighborhood market is an example of that,” Wal-Mart said.

Wal-Mart could succeed with this concept, thanks to its low price focus, said David Livingston, a Pewaukee, Wis.-based retail consultant.

“They will probably do well since they are the real deal when it comes to low price,” he said. “Then, on the other hand, SuperValu’s Save-a-Lot stores are about 15,000 square feet and they have been hit and miss.”

So far, Livingston said he’s not convinced Tesco’s Fresh and Easy format is succeeding.

“However, there might be something to this small format concept, and perhaps others will perfect it,” he said.

Monrovia, Calif.-based Trader Joe’s, for example, has a cult following with its small store size and reliance on private-label goods. But even Trader Joe’s has a specific type of consumer.

“Trader Joe’s needs a certain kind of demographics,” he said. “They offer more of an experience rather than just shopping.”

The king of the “shopping experience,” Austin, Texas-based Whole Foods, also is testing the waters in small format concepts.

The retailer announced plans to convert a former Wild Oats Market near the University of Colorado in Boulder to a Whole Foods Express.

The company has said its Express stores likely would include more convenience items and grab-and-go foods.

Pleasanton, Calif.-based Safeway Inc. also reportedly plans to launch a small-format store in the San Jose, Calif., area.

A Safeway spokesperson did not return calls for comment, but news reports have said the company plans to build or lease 15,000- to 20,000-square-foot store locations.

Small formats aren’t just in the West.

Pittsburg-based Giant Eagle Inc. also launched its Giant Eagle Express convenience store in May. The stores, which are about 15,000 square feet, include gas pumps, cafes, grocery, pharmacy, meat and deli, take-home meals and a produce department, according to its Web site.