Is Walmart to Go a Game Changer?

What the local convenience store rivals think of the new competition

Published in CSP Daily News

Walmart to Go (CSP Daily News / CSPnet / Convenience Store Petroleum)

BENTONVILLE, Ark. -- Wal-Mart Stores Inc.'s first true convenience store, Walmart to Go, which opened in Bentonville, Ark., in March, is not the big threat many industry observers assume it is, c-store executives told The City Wire. It is just another competitor and will not cause them to start making changes to the way they do business, at least not yet.

Brandon Richmond, owner of four Family Stops c-stores in Fort Smith and Van Buren, Ark., said the market has already adjusted to other convenience retailers who got into the game far sooner than Wal-Mart.

"As it sits, this isn't Wal-Mart's first foray into the convenience store. Now we're assuming they'll come in and blitz the market, but Wal-Mart doesn't concern me as much as Casey's, Kum & Go and QuikTrip, because they've been doing it a lot longer than Wal-Mart," he told the newspaper.

While Wal-Mart may come in and be very similar to some of the larger competitors he mentioned, customers are primarily looking for customer service and the best price on specific items, such as tobacco.

"For the convenience store customer, price is very [important]. When it comes down to cigarettes, that's where we get 70% of our top line revenue. Wal-Mart won't be able to beat us because of state minimums," he said.

Convenience store owners are starting to think about what to do should Wal-Mart start encroaching on their market, said the report.

"If they open across the street, we won't go into a market that Wal-Mart is getting ready to flood," Richmond said.

Steve Ferren, executive vice president of the Arkansas Oil Marketers Association, a group that includes Kum & Go, as well as El Dorado, Ark.-based Murphy Oil, said when it comes down to it, no matter how confident some c-store retailers may be, or what kind of prices wholesalers can offer, competition like what could be coming is never welcome.

"No one wants to go head-to-head with Wal-Mart," he told the paper.

He said that large, urban and suburban areas may keep the chain stores, with independent retailers going elsewhere. It's a change he said is already underway.

"The players may be new, but the process has been going on forever," he said. "I don't know that the number of [c-stores] has changed, although the target market could have changed. If I know I have to compete with a Kum & Go in a larger town, maybe I'll go to a smaller town. ... So maybe it makes people choose locations differently."

As for anyone who may be looking for cheaper prices from Walmart to Go or any of the other large c-store retailers, Richmond said consumers should not expect major discounts.

"Most single-store owners are cheaper than Kum & Go and Casey's. They operate at a lot higher dollar and margin, but we buy from the same places they do. But they ... have the $3 million to build a store," he said.

Click here to read the full City Wire report.

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