Walmart and Target: Arguably the two biggest names in mass merchandising, the retail giants have in recent years expanded into the grocery space with great success. Now the big players are going small and in unconventional locations to tap into new sales opportunities.
Earlier this year, Walmart doubled its original growth forecast for its smaller-format stores, saying it would add between 270 and 300 units in 2014. Walmart currently operates 346 Neighborhood Markets and 20 Walmart Express stores.
“Neighborhood Market is performing comparable or favorable to leading grocers,” said Bill Simon, Walmart U.S. president and CEO, in a statement. “Our small-store expansion, in addition to providing customers access to a wide variety of products including fresh, pharmacy and fuel, will help us usher in the next generation of retail.”
Neighborhood Market’s focus on all things food, rather than typical department store-type items, makes it an ideal candidate for growing its fresh and frozen food selection. “Because Neighborhood Market is a supermarket, it gives seafood more visibility,” said Leon Nicholas, senior VP at Kantar Retail, a global retail market insights firm.
Kantar predicts that Walmart will add around 200 more Neighborhood Markets by the end of this year, and that’s just the start. “By 2018, [Walmart] could be in the mid-USD 20 billion (EUR 14.7 billion) range for that format,” said Nicholas. “That’s a retailer that is bigger than Meijer, and that is just one banner.”
The Neighborhood Market brand has grown quickly because executives have figured out how to use the pharmacy as a traffic driver, Nicholas said. “Walmart has also given stronger internal support to the stores,” adds Nicholas. “Neighborhood Markets were originally seen as an add-on [to traditional Walmart stores and supercenters].”
Click here to read the full story that ran in the June issue of SeaFood Business >
