Industry Intelligence

Wal-Mart Stores has opened its first Walmart Express, in answer to the growing threat of dollar stores. The 15,000-square-foot store, one-tenth the size of a Walmart superstore, aims to carry everything consumers might need on the spur of the moment, from milk and eggs to DVDs.

Walmart Express is sized to fit into cities where space is at a premium and in rural areas that can't support a superstore, according to a report by the Associated Press. The first store, opened in rural Gentry, Ark., is about a half-mile away from a Dollar General location.

Dollar stores have enjoyed strong revenue growth as they've lured more shoppers with bargain prices and wider selections. Meanwhile, U.S. Walmart stores open at least a year have posted declines in revenue for eight straight quarters, the AP report noted.

Dollar-store chains also have quickly expanded, opening stores closer to customers' homes, an advantage in this era of high gas prices. The average round trip to a dollar store is six miles, vs. 30 miles for a typical Walmart trip, Credit Suisse analyst Michael Exstein estimated.

The new Gentry store is one of 20 small stores Wal-Mart expects to open by the end of January. A second Walmart Express test store will open this Wednesday about 30 miles away in Prairie Grove, Ark., and another will launch in Ridgefield, N.C., a week later. The company also is experimenting with a prototype for urban markets in Chicago, to open this summer.

"This is about access to breadth of assortment" and everyday low prices, said Anthony Hucker, VP of Wal-Mart’s strategy and business-development division.

Hucker emphasized that the Bentonville, Ark.-based company is still testing out the small-store format. Most Walmart Express locations will have a pharmacy. Some, like the store in Prairie Grove, will sell gasoline. All stores will offer check-cashing services and accept food stamps.

For ease of shopping, some related general merchandise is featured alongside groceries. For example, tea kettles and toasters are in the bread and tea and coffee aisle. Shoppers can find prepaid phones and greeting cards as well, the AP report noted

Wal-Mart is looking to customers to tell the retailer what these small stores should carry. Signs throughout the store read, "If you want it, we'll get it."