Commentary

Wal-Mart Looking To Make A Small Fortune

What's next? Wal-Mart kiosks? Walmart vending machines? Wal*Mart pushcarts?1

The almost ubiquitous retailer yesterday showed off its latest gambit to be a lot of different things to as many communities as it can make a buck within -- a 15,000-square-foot store in Gentry, Ark., that is less than 20 feet tall and has only 45 parking places. It, and a store in Prairie Grove, Ark., will open next Wednesday. Before the New Year rolls around, there will be 15 more Walmart Express locations spotted in small towns and large cities, such as Chicago, nationwide.

Gentry is a rural town with a population of about 3,000 that's about 45 minutes' drive away from Wal-Mart's Bentonville-based headquarters, where shareholders are gathering for an annual powwow today. (You can get Twitter, Flickr and live video feeds here.)

Ready-to-go meals and other fresh food are near the entrance of the Gentry Express, MarketWatch's Andria Cheng reports. "As you walk through the store, it features many of the product categories in consumables and general merchandise that a regular Walmart would also carry, including tea kettles, toilet paper, DVDs, toys, stationery, prepaid phones and socks," she writes.

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There's a pharmacy, too, but overall, there are only 11,000 to 13,000 stock-keeping units compared to about 100,000 items at a Walmart supercenter.

"Small stores are going to be a very good growth opportunity for us because they allow us to get access in places we are not in today," says William S. Simon, president and CEO of Wal-Mart's domestic business. That could even include New York City, Alissa Skelton reports in the New York Times, despite the well-publicized opposition of labor unions.

Wal-Mart spokesman Steve Restivo says a recent Quinnipiac University poll shows 57% of New York City residents want a Walmart nearby. Company research finds Big Apple residents often drive to Long Island and northern New Jersey and dropped about $195 million in the burbs last year.

If all this seems vaguely familiar, it is. The Street was complaining last October that "Wal-Mart Offers Little Guidance on Small-Format Stores" during its annual meeting. Rumors of stores less than 20,000 feet had been circulating for a month or so at the time. Then there were a flurry of stories about Walmart Express last March when the Wall Street Journal's Miguel Bustillo told us that rather than the previously reported 30 to 40 outlets, the company was planning to launch "hundreds of small stores" over time.

But thinking small is not all Wal-Mart is up to, according to the AP's Anne D'Innocenzio. It is racing against time, she writes, to win back shoppers who switched to competitors when it "ditched best-selling toothbrush brands, craft supplies and bolts of fabric" in the process of tidying up its aisles "for the wealthier customers it had won during the recession." Could it be too late? I wouldn't bet a Blue-Dot Special on it.

1 Ever since Wal-Mart Corporate declared that its actual stores would be rebranded as Walmart several years ago (see this informative Brand New blog post for a quick rundown of the company's logos), the more persnickety copy editors among us have done mental gymnastics trying to make sure that when the retailer spoke in its corporate voice, it was Wal-Mart, and when it spoke about a local store (or two or three) it was a Walmart. The less persnickety have just come down on the side of one or the other and stuck with it. For the record, despite the New York Times referring to it as Wal-Mart Express this morning, the signage reads Walmart Express. We've seen pictures.

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