Walmart on Campus

Published in CSP Daily News

Big retailer opens small-format store, pharmacy at University of Arkansas

FAYETTEVILLE, Ark. -- In January, Wal-Mart Stores Inc. will open "Walmart on Campus," a small-format store and pharmacy at the University of Arkansas in Fayetteville.

Students, faculty, staff, visitors and community members will be able to access a complete retail pharmacy as well as a variety of groceries and other items when Walmart on Campus opens. It will have extended hours to meet the needs of the community. The store and pharmacy will be open to everyone in the area, not just the campus community, the university said in a press statement.

"This is Walmart's [image-nocss] first store of its kind," said Keith Keltner, associate marketing manager with Wal-Mart.

The 10,000-square-foot space under development replaces a university-run pharmacy that closed on December 20, added a report by AdAge.com.

The company has been testing a variety of new formats, including smaller stores, for several years. And in October, Bill Simon, president and CEO of Bentonville, Ark.-based Wal-Mart U.S., provided details about the company's plans for smaller-format stores when he presented the retailer's global plans for growth of its operating segments for the current and next fiscal year at its annual conference for the investment community.

"Over the next few years, we will introduce new formats to help us enter new markets," Simon said. "Walmart U.S. will move toward a three-format portfolio, which will drive expansion to urban markets and small towns, as well as fill in gaps in existing markets."

Wal-Mart is planning to open dozens of small stores in the nation's cities in an effort to fend off competition from dollar chains, convenience stores and others. The new stores, roughly a quarter to a third the size of a supercenter, largely will sell groceries.

He said he believes there is room for "hundreds" of small Walmart stores in the United States offering food and consumer staples. The retailer first will test their urban appeal with 30 to 40 stores over the next few years before a full-scale launch. ( Click here for previous CSP Daily News coverage.)

The conventional Walmart Supercenter, which remains Wal-Mart's most profitable format, averages 185,000 sq. ft. and sells both groceries and other goods. But the retailer has been testing both 10,000-sq.-ft. stores in Arizona under the Marketside by Walmart banner and a 20,000-sq.-ft. version of its Neighborhood Market, which includes a pharmacy and falls within the 30,000 to 60,000-sq.-ft. range. The retailer is also developing smaller, 80,000-sq.-ft. versions of its supercenters.

Simon has said the company will "beg, borrow, steal and learn" from its Latin American small-format stores in creating its smaller-format U.S. Stores. ( Click here for previous coverage.)

Local restrictions, backed by unions and other opponents of Walmart expansion, have kept the giant retailer out of many urban areas on the East and West Coasts, said AdAge. But Walmart is again eying the New York market. Drug or convenience stores of around 10,000 square feet could easily allow the retailer to enter urban markets, and if the format proved successful, the retailer could look to acquire a drug chain such as Rite Aid, the report speculated.

"You won't see a material amount of capital spent here, but we will be building these stores to learn from them," Simon said concerning the smaller stores, according to the report.

"There are hundreds and hundreds if not thousands of opportunities in the U.S. for small formats," he said, adding that the pharmacy business, which has been driven by the $4 generic prescription program he led four years ago for Walmart, has helped make supermarket-sized Neighborhood Markets more profitable.