Wal-Mart revises Neighborhood Market format - The Packer

Wal-Mart revises Neighborhood Market format

01/24/2007 12:00:00 AM
Jim Offner


Wal-Mart Stores Inc., Bentonville, Ark., has revamped the format of one Neighborhood Market store in Tulsa, Okla., to feature, among other changes, more conventional and organic produce. The retailer plans to open 15 to 20 more Neighborhood Markets this year.

(Jan. 24) The new-generation Wal-Mart is now embracing the company’s Neighborhood Market format.

Bentonville, Ark.-based Wal-Mart Stores Inc., which in the last year has unveiled several strategies aimed at upscale consumers, has opened its first Neighborhood Market under a revamped design in Tulsa, Okla.

The store’s design, which features, among other amenities, more organic and conventional produce, is the result of months of consumer research, the company said in a news release.

In a sense, it’s business as usual for a company that always has its hand on the consumer’s pulse, said Bruce Peterson, Wal-Mart’s senior vice president of perishables.

“Broadly speaking, all of our stores are in a state of evolution,” he said Jan. 22. “If you look at our original Supercenters versus what we are putting on the street today, it becomes evident. Any and all changes that we would make would be designed to improve the customer experience.”

Tulsa’s new Neighborhood Market — the 112th store in the 10-year-old concept — opened Jan. 17. Others will follow, with the company planning to open 15-20 more this year.

“There is no preset limit to how many stores the company wants,” Peterson said.

There also is no concern about Neighborhood Markets luring shoppers away from Wal-Mart Supercenters.

“There is no ‘fine line’ between the formats,” he said. “Assortments are based on the community the store operates in.”

Indeed, building on the Neighborhood Market concept is a shrewd strategy, said Neil Stern, a senior partner at Chicago retail consultant McMillan/Doolittle LLP.

“I don’t know how much of a concern that is, about taking customers away from the supercenters,” Stern said. “I think Wal-Mart has always said they’d rather take market share from themselves, as opposed to somebody else doing it.”

The Neighborhood Market concept has is the next logical step to Wal-Mart’s growth, Stern said.

“There’s no question that the end of expansion of the supercenter (format) is now on the horizon, and they need other ways to grow the business,” he said.

Diversity in formats is a sound business practice, said Ed Odron, a Stockton, Calif.-based retail consultant.

Many of us retailers realize one format doesn't work for all stores,” Odron said. “You have to present the customers with items they want — be it organics, Hispanic, Asian, soy, value-added, price, etc. — in order to fulfill their needs. In many cases, that’s why the independents sometimes do better than the chains.”



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