As Walmart is running out of locations for its big shopping centers, and running out of ideas to boost its declining revenue, the company is looking to roll out a nationwide implementation of small express stores. These 15,000 square-foot express convenience stores will allow Walmart to enter urban markets, as well as some rural towns. For those discount stores thriving post-recession with added brand name products and competitive pricing, Walmart’s plan for 350 of these smaller stores threatens a warring front in customer sales. The first of these stores opened in June, and Walmart has planned the opening of 15 Express stores this year in Arkansas, North Carolina and the Chicago Area.
Walmart Competing with Local Shops on Main Street
Walmart recently encountered one of the longest slides in domestic same store sales in its retail history. The Wall Street Journal confirms, saying, “Walmart’s U.S. business, which accounts for 62 percent of its $419 billion in annual revenue, has reported declining sales at stores open at least a year, for two consecutive years.” Analysts believe the smaller stores could help Walmart compete with dollar stores, which have been a big hit in the weak economy. According to MSNBC, “They could also pose a competitive threat to pharmacy chains and local mom and pop shops that have traditionally received business where a Walmart box store did not rule.”
While some retailers fear the big box store stepping on their turf, it doesn’t go unnoticed that the large retailer won’t be without its struggles during the transition. While easier than finding a location for another Super Center, Walmart is still faced with the challenge of finding locations for all 350 stores. The greatest challenge, however, will be product selection. As Patty Edwards, chief investment officer with Trutina Financial, tells MSNBC, “Finding the right assortment of items could be especially challenging for the big box store, which is used to sprawling shelves lined with a vast array of goods.” According to Walmart’s spokespeople, the Express stores will stock a variety of general merchandise, and a few will even support a pharmacy. Watch out Main Street USA, Walmart’s renting the space next door. This piece has been adapted from a story on msnbc.com.