PHOENIX – As expected, Wal-Mart Stores Inc. on Thursday launched its first new store concept in a decade with the official opening of four small grocery/convenience stores in the Phoenix area that are less than a tenth of the size of its huge Supercenters, reported The Financial Times. The new 15,000-square-foot stores are painted in plum-purple and trade under the Marketside logo, rather than the Wal-Mart name.
They represent the retailer's test of a small neighborhood store format as an answer to the U.S. expansion of Tesco Plc's 10,000-sq.-ft. Fresh & Easy stores.
The [image-nocss] Marketside store in the suburb of Mesa drew a handful of customers early on Thursday, said the report, as well as a group of executives from Fry's supermarkets, part of the Kroger chain, and one of the leading local traditional grocery chains.
Unlike Tesco's hard-discount Fresh & Easy format, the Marketside store is focused on value-priced leading national brands, such as Tide and Oscar Meyer's meats, rather than its own-label products; however, like Tesco, it includes a range of own-brand prepared meals and side dishes. The store stocks 5,000 to 7,000 products, considerably less than the 20,000 items or more stocked by a traditional 40,000-sq.-ft.U.S. supermarket, but more than the 3,000 to 5,000 items stocked by its Fresh & Easy rival.
The four Arizona stores mark a contrast with Wal-Mart's traditional minimalist approach to service, including a kitchen with baking facilities for preparing bread on the premises and an oven for heating its own-brand pizzas, the report said.
Wal-Mart said that the stores are part of a 10-store pilot, with another store in Phoenix being built. It is already a dominant player in the region's grocery market through its network of Supercenters, 35,000-sq.-ft. Neighborhood Markets and Sam's Club bulk warehouses.
It is expected to open five of the stores in San Diego, in southern California, where local political opposition backed by the UFCW grocery workers' union has slowed the expansion of its grocery Supercenters. Should the San Diego test prove successful, the Marketside concept could enable Wal-Mart to establish a presence in other urban grocery markets, such as Chicago, Los Angeles and New York, where it has faced similar political opposition, the Financial Times said.
People familiar with the project told the newspaper that Wal-Mart is not yet committed to expansion of the small-store structure.
Santa Ana, Calif.-based real-estate company Red Mountain Retail Group Inc. (RMRG) said that four former drug store locations out of a seven-store portfolio purchased in 2007 were the sites for the Marketside stores in Gilbert, Mesa, Chandler and Tempe. They feature muted colors, polished concrete floors and use of organic styling.
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