Is this the end of local stores? Mighty Walmart plans to build 350 mini 'express' shops a year to take on smaller retailers
By Daily Mail Reporter
Last updated at 10:19 PM on 3rd June 2011
The world's largest retailer is downsizing its new stores to fit smaller city centre and rural locations in a bid to boost already astronomic annual sales of $420 billion.
But smaller retailers and traditional 'Mom and Pop' stores could suffer from the move as consumers opt for convenience and lower prices.
Sign of the times: The Arkansas Walmart Express will be the first of its kind in what the company hopes will be a nationwide roll-out of smaller stores
Within the next few weeks it will be followed by another Walmart Express test store about 30 miles away and a week after that one more in North Carolina.
And if the three prototype stores go well, Walmart sees the potential to build around 350 per year, the same pace as the height of its super centre expansion in 2005 and 2006.
The express format is similar to other major retailers such as Britain's Tesco, who have swamped UK high streets and town centres with their 'Tesco Express' format.
Other large grocery retailers, at first sceptical to the concept, quickly followed suit.
William S. Simon, president and chief executive of Walmart’s domestic business said the express format should prove a valuable money spinner for the giant in the years to come.
He said: '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.'
Walmart stores have been blamed for gutting local towns by driving down prices
A 2006 study by Loyola University found that within two years of a Walmart store opening in Chicago, 82 local stores went out of business.
And according to another study called 'The Effects of Walmart on Local Labor Markets' found that for every two jobs the company creates, three local jobs are destroyed.
Speaking to MailOnline, one of the reports authors David Neumark said that when Walmart moves into an area, prices at other stores fall.
He said: 'Why did Walmart grow so fast? Because they are super efficient at what they do. They driver prices down.
'It is not a good or bad thing, but will the new stores put pressure on Mom and Pop stores and force them to close, sure.'
The new Arkansas Walmart express store looks like a tinier version of the company's usual sprawling self.
The long, narrow concrete box, which features a powder-blue Walmart Express sign, is less than one-tenth of the size of a super centre.
The store, which has exposed pipes and yellow walls, carries most of the basics that its bigger cousin carries, from bacon and milk to socks and DVDs.
That's ideal for customers who are in a fix - they've run out of milk or their toaster just broke, or they're just bored and need to pick up a DVD. But the selection is less - 11,000 to 13,000 items, a tenth of what a superstore carries.
Protesters in New York have successfully fought off Walmart opening a large super centre near the centre of town in the past
Wal-Mart is experimenting with a Walmart Express prototype for urban markets in Chicago, to open later this summer.
It plans to build 15 to 20 Walmart Express stores, focusing on Arkansas, North Carolina and Chicago, by the end of its fiscal year in January 2012.
Dollar stores, with their small size and convenient locations ideal for quick shopping, have added brand-name products and become more competitive on price. They're also expanding quickly, opening stores closer to customers' homes, an advantage in era of high gas prices.
Already, the average round trip to a dollar store is six miles, compared with 30 miles for a typical Walmart trip, Credit Suisse analyst Michael Exstein estimates.
Analysts will be carefully monitoring how the fight unfolds in Gentry, whose population is a little over 3,000 and about a 16-mile round trip to the nearest Walmart super center in Siloam Springs, Arkansas
Read more: http://www.dailymail.co.uk/news/article-1394087/Is-end-Mom-Pop-stores-Mini-Wal-Mart-express-stores-coming-town-near-you.html#ixzz1OXA5B5gN