Will new Walmart format bode well for fish?

Walmart’s addition of 30 to 40 smaller format stores over the next two years should bode well for fresh and frozen seafood suppliers.

The Bentonville, Ark.-based retail giant announced its global growth plan in mid-October, which includes adding 32.5 million square feet of selling space worldwide in 2011. Walmart’s large-format stores will experience the most growth, with a projected 152 stores added in the United States in fiscal 2011 and between 155 and 165 stores added in the country in fiscal 2012.

Retail consultants are encouraged by Walmart’s goal to add smaller stores in untapped urban markets such as Chicago and New York over the next two years.

“If they model the stores after their Marketside format, which are highly skewed toward perishables, it may be good for seafood. There is a significant amount of meat, produce, dairy, frozen products and a bit of seafood in those stores,” said Tom DeMott, COO of retail consulting and marketing firm Encore Associates in San Ramon, Calif.

However, DeMott suggested that the urban store’s product mix will be geared toward the demographics of each city, so the amount of seafood carried will differ from city to city.

Suzanne Long, director of retail at SSA & Co. in New York, is also optimistic about seafood inclusion in the new smaller format stores.

“In Walmart supercenters, they have closed a lot of their seafood counters and offer a frozen seafood presence. In their smaller stores, they will have seafood counters,” said Long.

However, because of Walmart’s global supply chain system, the retailer likely won’t be able to compete with supermarkets on seafood assortment, according to Long.

“Will Walmart be able to purchase according to local demand? I don’t think they will be able to do that as much as local grocery stores,” said Long.

Some consultants believe the urban stores will be modeled after the Marketside format, which is around 15,000 square feet, instead of Walmart’s Neighborhood Market format, at around 42,000 square feet.

“Anybody who comes out with a smaller format, whether it is Aldi, Fresh & Easy or others, it opens up many more options from a retail standpoint. [Walmart’s] idea is popular, particularly in Chicago, where there are challenges with large formats in the city,” said Jim Hertel, managing partner at retail consulting firm Willard Bishop in Barrington, Ill.