BENTONVILLE, Ark. — Walmart aims to make Neighborhood Market the banner for all of its small-format stores.
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Plans call for Walmart Express stores to be rebranded as Walmart Neighborhood Markets. |
A Walmart spokesman confirmed the plan on Tuesday. With the move, the 21 Walmart Express stores now in business and others in development will be rebranded as Neighborhood Markets. Walmart currently has 346 Neighborhood Market stores.
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.”
Earlier this year, Walmart said that it would open more small stores than Supercenters this fiscal year — a first for the company. The retailer thinks that the small boxes offer a chance to wring more growth out of mature markets by taking sales away from drug stores, dollar stores and supermarkets.
The Neighborhood Market stores, all of which have pharmacies, average nearly 40,000 square feet and offer fresh produce, meat and dairy products, bakery and deli items, household supplies, and health and beauty aids. The Express stores, not all of which currently have pharmacies, run around 15,000 square feet and carry groceries and general merchandise.
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.
In February, 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.
