So much has been happening at Walmart over the past 18 months that it is hard to follow. The media jumps on individual news releases and food entrepreneurs need to see the bigger picture that is forming in the food and beverage sector due to changes in strategy at Walmart. So this article will connect the dots on Walmart.
Do I have any predictions? Not at this point and I always advise that companies "ignore Walmart at their own demise". One thing for sure… Walmarts changes are focusing squarely on their capturing more of the consumers "share of stomach" with their newer small format stores and their heavy involvement with social media.
Walmart Reverse Sales Decline
Walmart U.S. delivers three consecutive months of positive same store sales according to Walmart U.S. President and CEO Bill Simon. In his press conference he revealed store expansion plans and in particular he stated "…We have identified a large number of potential Neighborhood Market opportunities, and we plan to open between 80 and 100 medium to small formats next year." That last statement clearly illustrates that traditional supermarket chains will be competing head on with Neighborhood Market stores that are sized to fit into retail locations that can house traditional supermarkets. Why?
Neighborhood Markets are mostly food and Walmart has the lowest gross margins in the industry and almost always the lowest prices on food. Have you seen how many empty supermarket locations there are and in particular on the east coast, many are the shuttered Pathmark and A&P sites. Want to speculate who might be snapping up those former A&P's and Pathmark's?
Convenience store chains and Mass Drug retailers like CVS will be competing with the 10,000 sq. ft Walmart Express stores. A 10,000 sq. ft store can go most anywhere such as in a current strip retail center or as a small stand alone on a pad in a larger Power Center.
Walmart Express was born from the experimental Marketside stores. Now that Walmart Express is entrenched in Walmarts expansion strategies FreshNEasy Buzz reported that Walmart will be closing all Four Marketside stores this year.