GENTRY, Ark. & CHICAGO -- Wal-Mart Stores Inc. will next week start building its first Express stores, a format less than a tenth the size of an average supercenter. Two of the first identified Walmart Express sites suggest just how wide ranging the company believes the concept can be: from a rural, 14,000-square-foot site not far from its headquarters in Arkansas to an urban, 10,000-square-foot site on the South Side of Chicago.
The world's largest retailer will begin construction March 16 on a 14,400-square-foot store in Gentry, Ark., a town of 3,158 about 20 miles southwest of the company's Bentonville, Ark., headquarters, according to building permits obtained by Bloomberg.
While Wal-Mart has kept details of the new stores a closely guarded secret, Steve Restivo, a company spokesperson, confirmed the location of the store openings and the timing for the news agency. Work on similar stores in nearby Prairie Grove and Gravette will also start over the next two weeks, said town officials. The new stores will feature a pharmacy and groceries section.
"Wal-Mart's U.S. store fleet is designed for yesterday's retail wars," Craig Johnson, president of Customer Growth Partners in New Canaan, Conn., told the news agency. "If they want to capture their rightful share of today's shopping trips, they have to have a smaller format. God bless supercenters, but they are not designed to get in and out of within five minutes."
CEO Mike Duke is seeking new avenues for growth in the United States as comparable-store sales in Wal-Mart's namesake stores have fallen for seven straight quarters. The retailer plans to open as many as 40 smaller units this year in rural and urban areas, and executives said last month that the first Express store would open as early as May.
U.S. chief Bill Simon has said that "there are hundreds, if not thousands of opportunities in the U.S." for stores smaller than the retailer's supercenters, which accounted for 76% of Wal-Mart's U.S. locations as of January 31.
The Express stores, concrete square boxes with metal roofs, will cost $1.2 million to build and sit on lots just under five acres, according to building permits filed in Gentry and Prairie Grove, which has a population of 4,380. The stores will have 75 parking spaces, a pharmacy and three or four checkout counters, Jackie Baker, Prairie Grove's building and planning director, told Bloomberg.
Wal-Mart supercenters average 185,000 square feet with about 142,000 items, according to the company website. Supercenters typically have as many as 800 parking spaces, according to research from UBS AG cited by the news agency.
Sections for fresh produce, refrigerated foods and frozen items will go down one side and along the back of the Express store, Baker said in an interview. The store will have about a dozen aisles, according to Gentry city superintendent David McNair.
It is not clear from the planning materials how much of the product assortment will be groceries compared with general merchandise. Groceries accounted for 51% of Wal-Mart's $258 billion in sales in the United States in fiscal 2010, according to company filings.
McNair said that when he first saw the layout earlier this year, Wal-Mart's sponsorship of the project was not disclosed, with the plans calling the project simply a "Retail Store."
"I only learned two weeks ago that it was Wal-Mart," McNair told Bloomberg. "People said it may be a Target, or Wal-Mart or Walgreen's. Everyone had their own pet theory."
Meanwhile, Wal-Mart will open its first urban Express store, its smallest-format store yet, this summer in the Chatham Market on Chicago's South Side, Alderman Howard Brookins confirmed for Crain's Chicago Business. The retailer will build out an existing 10,000-square-foot building. The new store, not much larger than many 7-Elevens, will carry convenience-minded grocery items, said the report.
It will be in the same retail center as a Wal-Mart Supercenter approved last summer, the report added. The smaller store will be about two blocks northeast of the supercenter.
"I was told [Wal-Mart] wants to try a new concept and see how it works," Brookins told the publication. "There's the thought that some people don't want to shop in a big box but need convenient groceries."
(Click here for previous CSP Daily News coverage of Wal-Mart's formatting forays.)