retail news in context, analysis with attitude

The Orange County Register reports that Walmart plans to open its first Neighborhood Market in California this week, a 31,000 square foot store carrying 29,000 SKUs in Huntington Beach.

According to the piece, "Three other Neighborhood Markets will debut later this year in Rancho Santa Margarita, Garden Grove and Anaheim ... Other Walmart Neighborhood Markets are planned for Los Angeles, San Diego, San Bernardino and Upland."

Experts suggest that as Walmart rolls out the new format in California, it is likely that a price war could break out that will envelop Walmart, Tesco's Fresh & Easy concept, as well as all the traditional supermarket retailers operating in an increasingly competitive environment.

Meanwhile, the Chicago Tribune reports that the Walmart Express small format store operating in in West Chatham, Illinois, will close July 27.

The story says that "the smaller format store that opened last summer and sells primarily groceries was losing customers to the larger Walmart Supercenter that opened in January and is roughly 100 yards away." Walmart executive say they wanted to test whether a small format store could be successful operating so close to a larger store, but that this particular failure does not mean that the company is losing any enthusiasm for the smaller concept - "Walmart is trying-out its smaller Express format with 11 stores (including West Chatham) operating in three Chicago neighborhoods, northwest Arkansas and North Carolina," the story says.
KC's View:
I'm not completely sold on the idea that Walmart knows how to operate these Express format stores, but I have no think this is closing is anything more than the company says it is - cutting bait on a fishing expedition that wasn't working.