Wal-Mart’s Chicago expansion effort on schedule - The Packer

Wal-Mart’s Chicago expansion effort on schedule

12/10/2010 02:44:20 PM
Bruce Blythe

CHICAGO — Wal-Mart Stores Inc.’s Windy City expansion plans are moving along on schedule, a spokesman for the world’s largest retailer said.

By the fourth quarter of 2011, Wal-Mart expects to open a new supercenter in the Chatham neighborhood on Chicago’s South Side, spokesman Steven Restivo said.

Another store in the Pullman neighborhood, also on the South Side, is scheduled to open by the first quarter of 2012, he said. Both stores will include a full grocery department, including fresh fruits and vegetables.

“The stores will have everything a customer would associate with a traditional grocery shopping experience,” Restivo said in late November.

As Wal-Mart ramps up Chicago expansion, the retailer is sure to become an even bigger buyer of fresh produce than it already is. Wal-Mart operates one store in Chicago and 20 in surrounding suburbs.

Earlier this year, the retailer’s executives said they plan to build “several dozen” stores in Chicago over the next five years.

Restivo declined to say specifically where Wal-Mart buys its fresh produce for the Chicago area, though the company has said it will increase purchases from local growers across the U.S.

For new stores, Wal-Mart so far has targeted lower-income areas on Chicago’s South and West sides, where real estate is typically cheaper than in the more-affluent North Side.

Chicago overall has about 600,000 residents in “food deserts,” with limited access to fresh foods, Restivo said.

“We can be part of the solution when it comes to improving access to healthy foods,” Restivo said. “We want to make access more convenient.”

“Based on our research, there’s overwhelming support for more Wal-Mart stores,” Restivo added.
“We continue to evaluate opportunities across the whole city.”

Not everyone in the Chicago area is welcoming more Wal-Mart stores with open arms.

Traditional supermarkets and smaller, independent grocers have seen profit come under pressure in recent years, in part because large discounters such as Wal-Mart have expanded food offerings and lured away customers.

Wal-Mart is the largest U.S. food retailer, with about a fifth of the market, according to analysts.

Wal-Mart is “a definite concern, just because of their pricing,” said Mark Wise, director of produce for Strack and Van Til, an independent grocer with 31 stores in the Chicago area. “If you get in a battle with Wal-Mart, you will lose. We, as an independent grocer, have to step up our game and offer quality produce to get the customer back in the store.”

Wal-Mart’s U.S. grocery sales generated almost $132 billion in the company’s fiscal 2010, or 51% of total revenue. Fresh produce accounts for about 12% of a typical grocery store’s sales, according to Progressive Grocer research. Based on that figure, Wal-Mart has sold about $15.8 billion of fresh produce in 2010.



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