Wal-Mart Shutters Marketside Stores

Published in CSP Daily News

Applies lessons from Phoenix medium-format pilot to small-format Walmart Express

By  Greg Lindenberg, Online Editor

PHOENIX -- Wal-Mart Stores Inc. has shifted its emphasis from one smaller-format brand to another with the closing of its four Walmart Marketside stores in the Phoenix area. "Marketside was a pilot program with four stores in Arizona in the Phoenix metro area, and all four of those stores will be closing," Wal-Mart spokesperson Delia Garcia told CSP Daily News.

Opened in 2008, the stores, located in Chandler, Gilbert, Mesa and Tempe, Ariz., will close Oct. 21, said the Mouth By Southwest blog, which first reported on the closures.

The Marketside stores, generally around 15,000 square feet, were conceived to fill a perceived niche between traditional grocery stores (at approximately 45,000 square feet) and convenience stores (at approximately 5,000 square feet), the blog said.

Now the company is betting on the Walmart Express small-format concept. The Walmart Express stores are 10,000 to 15,000 square feet in size.

"The Marketside program gave us a lot of learnings that we're using in developing and rolling out the Walmart Express format that we introduced earlier this year. A lot of the value of the Marketside pilot was those learnings about the smaller formats," said Garcia. "Another positive piece that has come from Marketside pilot is that we began offering Marketside branded goods in our other stores, and customers have responded very well to that. We will continue to sell Marketside-branded produce, deli and bakery goods in our supercenters."

Wal-Mart is pleased with the five Walmart Express stores that it has opened in Gentry and Prairie Grove, Arkansas, Ridgefield, N.C., and Chicago. It plans to have 11 such stores by the end of the year, said Reuters.

"The customer feedback on Wal Mart Express has been very positive," Garcia told CSP Daily News.

Wal-Mart said it would also ramp up openings of its Neighborhood Market stores, according to Reuters; at about 42,000 square feet, they are much larger than Marketside or Walmart Express stores but much smaller than Walmart supercenters. The first Neighborhood Market opened in 1998. There are about 185 such stores now.

Wal-Mart plans to open 80 to 100 small- and medium-format stores in its next fiscal year. Most will be Neighborhood Markets. This year, it plans to open just 25 to 30 small and medium shops.

The majority of Wal-Mart's new U.S. stores--up to 120 this year and up to 135 in fiscal 2013--will continue to be supercenters. But even those are getting a bit smaller, said Reuters. New supercenters are set to be approximately 90,000 to 120,000 square feet. The supercenters used to average about 185,000 square feet.