Posted on 11/12/2013 2:44:45 AM PST by 2ndDivisionVet
Watch out, 7-Eleven! There just might be a Wal-Mart convenience store opening up next door.
According to an Arkansas news site, the retail giant is testing out a convenience store format next to its corporate headquarters in Bentonville. The Northwest Arkansas Business Journal says the new C-store "will offer customers a quick and easy solution for gas, snacks and beverages, and other staples like milk, bread and eggs."
As Wal-Mart experiments with smaller-format concepts that step away from the previous superstore expansion model it championed, it's drilling down to the most basic level. While this will be something it uses to learn from, it's easy to see the convenience-store format being the next natural progression in store development. It's already accelerating the rollout of small-footprint stores, such as its 42,000-square-foot Neighborhood Market stores and its 14,000-square-foot Walmart Express shops.
The vast majority of the retailer's stores are Supercenters that average 180,000 square feet, but Wal-Mart says it will be opening more smaller stores than Supercenters. Between 2013 and 2014, the discount chain anticipates opening 240 Supercenters, yet will open about 300 of these more compact stores over the same time period.
The average C-store is around 2,750 square feet, according to the Association for Convenience & Retailing, with newer stores going as large as nearly 3,600 square feet, with almost 2,800 square feet dedicated to sales space.
Even if Wal-Mart doesn't shrink to that size, it still represents a remarkable transformation in its direction. Because convenience stores are typically, well, conveniently located, offer extended hours, and stock the basics most people are looking for when they don't want to spend hours doing a week's or month's worth of grocery shopping, they continue to expand at a steady pace.
The industry trade group says the number of C-stores in existence expanded to a record 149,220 at the end of 2012, a 0.7% growth rate over the year before. More than 82% of the stores sell gas and nearly a like amount sell beer, and C-stores account for more than 30% of all the beer sold in the U.S.
As popular as they are, they are also very reliant upon gasoline sales and quarterly results can end up being lumpy. The Pantry, one of the largest C-store chains, with more than 1,500 locations in 13 states, saw store merchandise sales rise 1.3% (up 3.3% excluding cigarettes) despite declines in store traffic, but retail fuel gallons sold comps dropped 4.4% in the quarter.
Conversely, a convenience store chain like TravelCenters of America , which operates fewer than 250 facilities, saw a near 4% rise in retail fuel sale volumes, yet revenues were essentially flat year over year, although its margins jumped 7.5% despite being negatively affected by aggressive sales tactics from rivals who tried to gain market share.
As Wal-Mart continues to deal with a sluggish economy, a bleak employment picture, and record numbers of people on food stamps, becoming an even more convenient destination for shoppers could help bolster flagging sales. It generated profits in the second quarter ahead of 2012's numbers, but still came in below analyst expectations and ended up lowering full-year guidance.
Of course, simply because it's opening up one test store doesn't mean it will become a full-fledged C-store operator. The company has a history of testing ideas to see what can be learned, such as its recently ended test of a subscription commerce service that began less than a year ago. It's taking the lessons learned from the experience and applying it to its traditional retail business.
I imagine the convenience store is being launched with the same mind-set, though I believe there's a lot more traction for this format then in a grocery-basket-a-month club.
Walmart could buy it’s own gas distributor in each area for it’s convenience stores and stock it’s shelves from their existing warehouses.
They could really put the hurts to everyone else.
Can they compete with Wally’s?
I no longer walmart.
Murphy Oil IS Wally. They’re the gasoline distributor for them, at least here in the South.
They located one of these at Tech Square (Georgia Tech). It just opened in August. The kids call it SmallMart.
Oh OK, I didn’t know that. It’s been quite a few years since I lived down south.
Walmart has a policy of not marking up beyond their set price. The same can of corn, for example, has the same price across all their stores nationwide, regardless of store size. Their computer network and software are geared toward it—it’s all centrally controlled and resupply is based on the nationwide network’s software.
If they apply THAT model then they’ll absolutely kill all these high markup convenience stores.
There is no room around here for a C store every corner has a Dollar store or Family Dollar store located there.and More popping up like warts.
They put one of these Walmart mini-markets in Julioville, better known as south Fort Worth. I made a visit the other day and the store was packed with EBT baby mommas getting their government purchased handouts.
These Walmart mini-markets are just an expansion of how Walmart gets an ever increasing portion of the government cash.
It’s like shopping in Thunderdome: “Two men enter, one man leave.”
I always wear kevlar undershorts when I feel the need to see Wally.
I understand. Sam’s Club is much better... walmart... not so much.
Yeah, but will they provide the little motorized chairs for the folks that “eat too much”?
Seriously? You need to use that language?
Actually Wal-Mart’s prices vary greatly from store to store. A good example my family members live about 35 miles away in a small country town with a super Wall-Mart. They drive all the way to the Wal-Mart in my area because the grocery items are noticeably cheaper. When my cousin had a baby recently she bought all of her diapers and other baby items there too because her local store also had much higher prices especially on diapers. Wal-Mart researches their pricing and they will keep them as high as a market can stand especially in areas with little competition.
There is no room around here for a C store every corner has a Dollar store or Family Dollar store located there.and More popping up like warts.
That is exactly why Wal-Mart is trying to go with these mini stores. Here in Kentucky Dollar General Stores are popping up like flower seeds. Wal-Mart is losing customers to these small country town Dollar Generals because people are shopping there and going to Wal-Marts less. I am anxious to see Wal-Mart open hundreds of these stores and then fail. Everyone has been in a Wal-Mart at least once and their stores are huge and they have everything. Now picture walking into a Wal-Mart mini store. Your first impression would have to be that they don’t have anything after getting the image in your head of a full size Wal-Mart you wouldn’t possibly be able to shop in the mini. Contrast that with walking in a Dollar General Store they have always been small stores packed to the ceiling with simply priced goods. Their store buildings look small but when you walk inside they appear to have a tremendous amount of goods. I want to see how Wal-Mart can counter this I really don’t think they can.
I thought that too but then the local TV station here (conservative journalists) investigated this and found the price of things where the small Walmarts as in the Super Walmart. My small town has one of the smallest Walmarts left in Alabama, and they say the prices are the same, and if we find a price lower at a Super Walmart that is not on sale, they’ll double the difference back to us.
Bentonville’s ongoing issue lacking of on hand inventory policies if applied to these stores will mean empty shelves in 24 hours. The truck will be on time early sometime next week with three more items of each to stock. LOL
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