Marketside is the first new format to be launched by Wal-Mart since it started its supermarket-sized Wal-Mart Neigborhood Market stores in 1998. It is also the first format not to use the Wal-Mart name since it created the Sam’s Club warehouse store in 1983.
The new Wal-Mart stores will be competing directly with Tesco’s new Fresh & Easy small format stores. Tesco has opened 20 stores in the Phoenix area in less than a year, with another 16 sites announced so far. Both retailers say their formats are aimed at providing fresh and prepared foods in a convenient neighbourhood location.
Wal-Mart has projected that the pilot, if successful, could evolve to between 1,000 and 1,500 stores with over $10bn annual sales.
Small format stores have taken off in recent years for a variety of reasons:
–Convenience: Consumers can stop by for dinner ingredients after work without navigating vast supermarket aisles.
-They’re a happy medium between going out for a meal (fast food) and time-consuming supermarkets.
-They’re perfect for small families and single people who don’t have to make massive grocery store hauls twice a week.
-Sundries and services can be customized to local needs.
-Small stores can be located inside of cities, rather than on the outskirts, eliminating shopping commutes.
-With scale behind them, small format stores’ prices and supplies rival those of bigger outlets.
The FT article says other grocery giants, like Safeway, are also experimenting with smaller formats. Look for niche stores, sans Mom-and-Pop, near you in the near future.