"The idea that they can run smaller convenience-type stores is a big mistake," analyst George Whalin of Carlsbad told the newspaper. "Fresh & [image-nocss] Easy hasn't proven that it'll work yet, and I think they'd figure out a way if there was one."
Some analysts say that Marketside is Wal-Mart's answer to U.K.-based Tesco's Fresh & Easy Neighborhood Market stores. But Whalin said he doesn't see grocery-buying trending toward stores of 10,000 square feet-larger than convenience stores but smaller than the average 50,000-square-foot supermarket. "I don't think they're the wave of the future," he said.
There are eight Fresh & Easy Neighborhood Market stores in San Diego County, said the report. Though more are planned, the push came to a near standstill after 62 stores were opened in California, Nevada and Arizona. Analysts say Tesco, the world's fourth largest retailer, is trying to work out its concept to suit U.S. consumers.
Wal-Mart's corporate office in Bentonville, Ark., which is usually closed-mouthed about its plans and strategies, would not comment on whether Marketside stores are planned for San Diego. "Marketside is a small-scale pilot of four stores now under way in Phoenix. A fifth store, in Peoria [Ill.], will be added to the pilot next year," spokesperson Amy Wyatt-Moore told the paper. "We intend to open up to five next year in a different location, but we have no plans to announce right now."Meanwhile, the Fresh & Easy Buzz, a blog that tracks the small-grocery format, recently picked up a commentary from Maggie Gilliam, the founder and principal of Gilliam & Co., a strategic consulting firm that specializes in the retailing and consumer products industries. She said, "The British press particularly tried to make out that these stores are Wal-Mart's response to-or as sometimes put, in fear of-Tesco's US expansion. In reality, Wal-Mart is always testing new ideas, both within the four walls of the existing Wal-Mart store formats and in experimental stores. Some new ideas never get very far off the ground, like an entirely vendor merchandised store and retail concepts offering deep discount drugs, arts and crafts, closeouts and home improvement merchandise. Others, however, like the Walmart Supercenter and Sam's Club, evolve into major undertakings. Even they though require tweaking, and the Supercenter involved an experiment with Hypermart USA and five years of testing on the street before being rolled out."
She added, "Wal-Mart's management has long recognized that there was business to be had with smaller stores to fill the neighborhood voids not readily reached by Supercenters, hence the Neighborhood Market. Marketside fills a similar void, but it is half the size and doesn't have a pharmacy.... We won't hazard a guess about Marketside's eventual role in Wal-Mart, but we liked the stores. They are not a bit like Tesco's Fresh & Easy which wreaks efficiency and offers few amenities, with most of the fresh merchandise packaged in a central commissary. Marketside, on the other hand, is much more inviting and emphasizes fresh in almost a Whole Foods kind of way, with most of the produce loose in open bins and some even hand stacked."
(Click here to read the full commentary.)
And CSP's Kay Segal recently visited a Marketside store and offered these comments:
"One thing that they are doing that I really like is the use of the 2-4-6-8. They are marketing sides from $2 to meals for $8. They have signage in the store that carries this concept through to the consumer." (Click the Download Now button below to view a flyer.)
"The store, in contrast to Fresh & Easy, has more service elements including Pete's coffee for immediate consumption, a traditionally self-serve bakery case with pastries, donuts and cookies as well as a full-serve deli counter. The fresh fruit presentation is more in line with a traditional U.S. grocery in that many items are shown in bulk versus the Fresh & Easy small pack concept. The product mix is medium to upscale with organic items incorporated throughout everything from produce to crackers."
"Overall, the store is warmer in feel than Fresh & Easy, but not as warm as Trader Joe's."
"The store was not busy, but one customer said he felt the prices were good, and he liked the store. He lived nearby and was visiting every day."
"With the added full-service food elements, the labor per location will be higher than the Fresh & Easy model, but it will also offer more 'customization' options for customers."
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