BENTONVILLE, Ark. -- Wal-Mart, the world 's largest retailer, said its new small Marketside grocery stores it is to launch this autumn could expand to a chain of more than 1,000 stores, delivering $10 billion-plus in annual sales, according to a report in The Financial Times.
The retailer plans to open 10 of the 15,000-square-foot Marketside stores initially, including four in the Phoenix area, where they will be competing directly with Tesco 's recently launched Fresh & Easy store concept.
Bentonville, Ark.-based Wal-Mart 's executives have described the Marketside stores as [image-nocss] a pilot project, although it is the first new store format to be launched by the company in a decade. But a job advertisement for the retailer indicates the scale of its ambitions for Marketside, saying the format “is expected to start with 10 stores and evolve to between 1,000-1,500 stores with over $10 billion annual sales,” according to the newspaper report.
At less than one-tenth of the size of the average Wal-Mart superstore, Marketplace stores would be aimed at “the needs of a time-starved, higher-income consumer that is interested in convenience and premium fresh, natural and organic offerings,” according to the company.
The approach contrasts with Wal-Mart 's experience with the Wal-Mart Neighborhood Market stores it launched 10 years ago, which are about the size of a traditional supermarket.
In response to an inquiry from The Financial Times, Wal-Mart stressed the Arizona stores were a pilot project. The retailer subsequently removed from its website the job advertisement that included the more ambitious targets.
Wal-Mart 's superstores are built around high volume and low cost, and the group has faced challenges in adapting to the supermarket-sized Neighborhood Market stores it launched in 1998, opening more than 140 outlets. The Marketside stores will require a fast turnover of stock, which could be a difficult fit with Wal-Mart 's distribution system, the newspaper reported.
Tesco has opened more than 60 Fresh & Easy stores in California, Arizona and Nevada since November and plans to have several hundred operating during the next two years.
Wal-Mart, the largest U.S. grocer with more than 20% of the market, is developing the Marketside format as growth slows at its 2,500-plus superstores. The Marketside format is also expected to spearhead a broader drive by the retailer to improve its overall grocery offering.
Safeway and SuperValu, two other large supermarket chains, are also experimenting with small, local formats, according to the report.
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