NC is test market for smaller Walmart Express stores

Smaller stores aim to compete with dollar stores and drugstores

glloyd@newsobserver.comJuly 21, 2012 

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A recently opened Walmart Express, one of five in North Carolina, in Snow Hill, N.C. North Carolina is the second test market for the newer, smaller, Walmart stores.

ASHLEY BLUE — ablue@newsobserver.com

  • Walmart is hiring in the Triangle The retailer is hiring about 70 people to work at a new Walmart Neighborhood Market in Cary that is opening in October. The 57,000-square-foot store will occupy a building on the southeast corner of N.C. 55 and High House Road. The hiring center for the store is at 501 Cascade Pointe Lane, Suite 103, Cary. The center is open from 7 a.m. to 5 p.m. Monday through Friday.

— At first glance, the Walmart that opened here last October looks like any other new Walmart you’d find around the state.

It’s got the retailer’s ubiquitous yellow logo, a tan brick façade and silver floors. Once inside, however, Walmart customers are confronted with a store layout that runs counter to the retailer’s reputation for vastness.

At 15,000 square feet, this Walmart Express is less than a 10th the size of the company’s massive SuperCenters, which can be 200,000 square feet or bigger.

Walmart Expresses are popping up in rural towns across North Carolina as part of a pilot project that is widely viewed by analysts as Walmart’s attempt to capture market share from dollar stores such as Family Dollar and Dollar General and drugstores CVS and Walgreens.

Of the 11 Express stores to open so far, five are in North Carolina. Several more will open in the state over the next year, making North Carolina the primary test market for the Express format.

“It’s a response to the trend in the retail industry right now, which is that the whole one-size-fits-all, large-square-footage stores are not really addressing the current landscape as it relates to consumer traffic, consumer spending and changing demographics,” said Sahir Anand, a retail analyst at Aberdeen Group.

Smaller stores have thrived in recent years, in part because the high cost of gasoline has forced consumers to stay closer to home. Target, Best Buy and other large retailers are also opening smaller stores to reach more urban areas and as a response to high real estate costs for big-box stores, Anand said.

Meanwhile, Walgreens is adding groceries, and Family Dollar is adding more national brands to keep the new customers they gained during the recession.

In a way, the Walmart Express concept represents a return to the chain’s roots. The stores are a throwback to the original, 18,000-square-foot dime store that Sam Walton opened in Bentonville, Ark., in 1962.

The first North Carolina Express location opened in Richfield in June 2011, followed by stores in Snow Hill, Midway, Ayden and Yanceyville. Additional stores are planned for Carthage, Liberty and Pikeville. An application for an Express location with a gas station in Eastover has been filed with Cumberland County officials.

‘Fill-in’ trips

Walmart Express stores sell about 15,000 items, compared to the more than 100,000 offered in a SuperCenter. Express stores offer many of the same products at the same prices as SuperCenters, including groceries.

Walmart is touting the fact that the produce sold in the Express stores is often locally grown. The Snow Hill store, for example, sells sweet potatoes grown just down the street, said North Carolina market manager Eric Litchfield.

Walmart says the smaller stores have exceeded profit expectations, with traffic growing every month since the pilot project launched.

Whether urban or rural, Express stores are being located in areas that have limited access to fresh produce and groceries at low prices, said Walmart spokesman Bill Wertz.

The stores are intended to keep people from having to drive to the next town to reach a Walmart. The smaller size also makes the stores more appealing to older shoppers and people stopping in for a few items on the way home from work.

That type of “fill-in” trip after work or between grocery shopping trips gives the Express stores a regular customer base that stops in two to three times a week, Snow Hill store manager Danielle Palmer said. She argues that the Express store customers are giving Walmart new business, not siphoning away shoppers from nearby SuperCenters.

“You can come in here and do all your shopping,” Palmer said. “You can get everything but a TV.”

Customers can order a television, or any other product sold at a SuperCenter or on Walmart’s website, and have it delivered to the Express store for pickup. A kiosk in the front of the store allows customers without computers or credit cards to order from the website for delivery to the store.

Lots of competition

Still, Walmart faces stiff competition in many of the small towns where it is opening Express stores.

Snow Hill, about 75 miles southeast of Raleigh, is already home to a Family Dollar and a Dollar General, which borders the Walmart Express. The nearest Walmart SuperCenter is in Kinston, about 15 miles away.

Snow Hill resident Carmen Harshaw, 52, said she drives 10 minutes several times a week to do all her grocery shopping at Walmart Express.

“The people are friendly, and it’s just the prices,” she said.

SuperCenters still remain the priority for Walmart, as the company plans to open more than a hundred such stores by year’s end.

Walmart also plans to add about 90 more mid-size stores, called Neighborhood Markets, that are a fourth the size of its SuperCenters. The first North Carolina location is set to open in Cary in October.

Lloyd: 919-829-4649

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