Down to Business: Walmart looks to make grocery push

Experts will tell you that whenever a new player enters a retail market, local consumers benefit. An

Experts will tell you that whenever a new player enters a retail market, local consumers benefit. And we’re certainly seeing that play out here at the supermarket, as ShopRite’s locating a store in Niskayuna — with plans for additional stores, too — showers shoppers with coupons and eye-popping specials from newcomer and incumbents alike.

Eventually, the marketplace will settle into a new normalcy — until another interloper comes to town and the cycle is repeated.

So let me whisper this in your ear: Walmart — or, more specifically, Walmart Neighborhood Market.

Retail giant Wal-Mart Stores Inc., where food already accounts for more than half of annual revenue thanks to the behemoth supercenter, is looking to cash in on more supermarket sales.

To do that, the company will boost the number of planned Walmart Neighborhood Markets. These 42,000-square-foot stores are reminiscent of the supermarkets of old, before a fit of supersizing in the 1990s added space for pharmacies and flowers, ready-to-eat entrees, artisan breads and cheeses and dine-in bistro tables.

Wal-Mart has had the grocery concept for a number of years, with stores found primarily in Texas, Arizona and the South. But the company expects to add about two dozen more Neighborhood Markets in the current fiscal year, which ends in January, and some 80 more the following year. Both projections are up from just a short time ago.

“We’re excited about this format,” Karen Roberts, president of Wal-Mart Realty, said this month at a meeting the company holds annually for analysts, which was broadcast on the Web. “It provides us the ability to grow share in markets that we’re already established in and have medium and high share. And it’s also a great tool for us to enter markets [where] we’re not yet present.” That includes big cities like New York, Washington and Boston, where Wal-Mart has encountered a lot of pushback to siting its mammoth supercenters. The Neighborhood Markets, at about one-fourth the size of supercenters, are easier to squeeze into crowded cities. And an even smaller format, the 10,000- to 15,000-square-foot Walmart Express, is in development as a kind of convenience store on steroids. Only five exist today, but as many as 20 could be in testing by next year.

While the combination discount/grocery supercenter “still remains our primary vehicle of choice for growth,” Roberts told the analysts, customers also like the smaller Neighborhood Markets. “It’s a great fill-in format in markets where we already have established share and established loyalty with customers.” How soon might that put the stores in the Capital Region? I cannot say, as the company did not return a call or email seeking comment.

Earlier this month, though, the Boston Globe reported that Wal-Mart planned a Neighborhood Market push into the Northeast, targeting communities near Boston for the first stores. Already, it has been rebuffed in Roxbury, the paper said, but plans are moving forward to locate a supermarket in a vacant Circuit City site in Somerville.

The Globe said grocery prices in the Northeast are high when compared to the national average, which should play to Wal-Mart’s pricing strength. And the stores can benefit city-dwellers who may have fewer options for fresh meat and produce.

That’s true in the Capital Region, too, where supermarkets tend to gravitate to the suburbs. Wal-Mart, with close to a dozen stores locally, also is found in the suburbs.

Does that make us attractive as a Northeast community when it comes to a Walmart Neighborhood Market? Time will tell.

Marlene Kennedy, a longtime business editor in the Capital Region, can be reached by email at [email protected]

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