Walmart Formats

"A typical grocer carries 100 types of mustard … We have just brown and yellow," says Save-A-Lot president Bill Shaner in a Wall Street Journal article by Miguel Bustillo and Timothy W. Martin (4/28/10). Save-A-Lot also has Walmart a bit worried apparently, as does Aldi, another grocer known for a streamlined, store-brand shopping experience. "Aldi literally ran Walmart out of continental Europe, and now they’re taking the fight to Walmart in the U.S.," says Burt Flickinger, a retail consultant. It’s true: Walmart "pulled out of Germany in 2006 after struggling to compete with Aldi and other discounters."

As it seeks to avoid similar struggles in the U.S., Walmart apparently is looking to its success in Mexico, where it "became that nation’s largest merchant by operating seven store formats, most of which are smaller than its U.S. Supercenters. The head of Walmart’s U.S. operations, Eduardo Castro-Wright, formerly ran Walmart de Mexico. Walmart already has "slowed its openings of U.S. Superstores … from 131 in 2007 to 49 in 2009," but hasn’t said much about its plans other than promising "innovative" and "more efficient" formats.

This includes smaller stores with "drive-through lanes where customers can pick up online purchases." So far, it has opened 152 Neighborhood Markets, which are smaller than its traditional stores but still consume "about 42,000 square feet." It has opened just four Marketside stores "after disappointing early performance," as well as a Hispanic format. Walmart isn’t discussing its strategy, but some observers think they’ll be just fine as the economy recovers and shoppers "feel the urge to return to Walmart and supermarkets for familiar brand names."