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The Financial Times reports that Walmart has plans to open one of its new small-format Marketside stores in San Diego – just two miles from a new Tesco small-forma Fresh & Easy store in Vista, California.

Until now, Walmart had only confirmed that it was going to open four Marketside stores in the Phoenix area, and the company maintained that it was just a test. The first of the units are scheduled to open in just a few weeks. However, there have been reports – most of them from FT - that Walmart envisioned the Marketside fleet to eventually grow to more than a thousand and generate more than $10 billion in annual sales.

FT suggests that Walmart at some level needs to play catch-up with Fresh & Easy. Despite mixed reviews in the media and from shoppers, Tesco has been opening the stores at a fast clip – there are 75 open at the present time, and plans are for the company to have several hundred up and running by the end of next year.

Marketside has been described by Walmart as a 15,000 square foot store that will cater to “the needs of a time-starved, higher-income consumer that is interested in convenience and premium fresh, natural and organic offerings.” This would distinguish the format from the company’s Neighborhood Market format, which has always been more along the lines of a traditional supermarket.

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And it isn’t just Tesco and Walmart. See the next story…