Wal-Mart About to Debut 'Small Box' Stores

According to a report just released by the International Conference of Shopping Centers, Wal-Mart will roll out a convenience store concept called Marketside with a ten-store launch in Arizona this fall. The 15,000-square-foot units (about one-tenth the size of regular Wal-Mart stores) will compete with Tesco’s newly launched Fresh & Easy concept. Wal-Mart projects that Marketside will blossom with approximately $10 billion in annual sales from up to 1,500 stores nationwide. Since this store size is smaller than Harres Furniture (23,000 SF) here in Columbia, this new move by the retail giant may have a sizable impact upon a pending local ordinance seeking to restrict “big box” development.

Wal-Mart is most likely responding to the growing backlash against "big box" retailing by aggressively moving to outflank its critics. Not that the controversy is hurting sales--Wal-Mart saw profits rise 17 percent in its fiscal second quarter, which ended July 31st. Net sales rose 10 percent to $101.6 billion, from $92 billion a year ago, and its same-store sales in the U.S. grew 4.5 percent (excluding fuel sales) year on year. These glowing numbers encouraged the company to raise its full-year earnings forecast, but at the same time, it cautioned that sales would be slower in the third quarter—somewhere between 1 and 2 percent—as the money from the tax rebates that helped drive sales in the second quarter gets used up.