Table of Contents
BENTONVILLE, Ark. — Walmart has decided that its accelerated small-format expansion will occur under the Neighborhood Market banner.
Walmart has decided that its accelerated small-format expansion will occur under the Neighborhood Market banner.
 |
That means that 21 Walmart Express stores now in business and others in development will be rebranded as Neighborhood Markets.
Walmart already has 346 Neighborhood Market stores, typically 38,000 square feet, about triple the average size of a Walmart Express.
The rebranding reflects the similarities of the two small-store formats, said Walmart spokesman John Ales. “Express customers are relying on the stores for grocery fill-in trips, last-minute dinner and prescription pickups,” he said. “That’s the same as with the Neighborhood Markets.”
Walmart introduced the Express format in 2011 as a test in three markets. Neighborhood Market stores were introduced in the late 1990s as an initial effort to shrink the footprint of the Supercenter, which typically encompasses 185,000 square feet, carries 140,000 items and still comprises more than 80% of Walmart’s store base.
Walmart executives have been pleased with the performance of the smaller stores, which allow the retailer to open outlets in more densely populated neighborhoods and could help it fend off competition from a reenergized dollar store segment following a possible merger of Family Dollar Stores Inc. with either of its suitors —Dollar Tree Stores Inc. or Dollar General Corp.
Walmart last month reported same-store sales at Neighborhood Market stores increased 5.6% in the second quarter compared to a year earlier. Traffic increased 4.1%.
That growth came as companywide same-store sales (excluding fuel) were flat for the quarter and net income rose just 0.6% to $4.1 billion.
"We really like the position of our smaller stores. We think for us it’s a really winning combination when you add fresh and gasoline and pharmacy and even frozen," Charles Holley, Walmart’s chief financial officer, said last month in a call with shareholders and analysts following release of the retailer’s second quarter financial results.
Earlier this year, Walmart said it would double the pace of the rollout of smaller stores, to between 270 and 300 for the fiscal year through January.
Ales said Walmart is on pace to meet that target. By comparison, the company said it expects to open 115 Supercenters this year.
Walmart will continue to experiment with stores in smaller formats as it seeks to stay abreast of changing customer attitudes and behaviors, Ales said.
“We want to make shopping fast, easy and convenient for our customers,” he said.
