BENTONVILLE, Ark. - Can Walmart€™s smaller format stores win customers over from the increasing growth of dollar store competition? The Wall Street Journal reports that Walmart hopes its Walmart Express will fuel U.S. growth, despite the fact that less than 12 locations have been opened since the format launched last year. Experts point to supercenter prices and product in less-yet-more-costly space is squeezing the profit margin on the Express.
The discount retailer said it is moving at a snail€™s pace as part of an overall plan to emulate the 13 years it took to make a profit with its Neighborhood Markets, of which 199 locations have been opened with another 80 in the works for 2012. CFO Charles Holley emphasized that Walmart Express was currently in the pilot phase.
Other competitors are opening smaller formats at a fast clip, including Dollar General, Dollar Tree and Family Dollar, plus Target€™s City Target stores. Walmart€™s smaller footprint stores in the United Kingdom and Brazil have been successful.
Last June, U.S. stores CEO Bill Simon said he wanted Walmart Express "to deliver the same experience that a supercenter can deliver, only in 15,000 square feet." Some analysts think the chain is taking that too literally.
"Walmart can't pull itself away from a supercenter mind-set," said Leon Nicholas with Kantar Retail. "Just look at the shelves. It is just absurd to see a dozen kinds of jelly or peanut butter when a shopper just wants to get in and out of the store quickly."