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[16 comments]

Walmart opens first 'To Go' convenience store concept

March 18, 2014

Most people know Walmart to Go as the retailer's nascent attempt at home delivery. Now, however, the banner also has a physical presence at a single convenience store in Bentonville, AK.

According to a report by The City Wire, the new Walmart to Go had a soft opening last Saturday with its grand opening planned for tomorrow, March 19. The paper described the new store as "part traditional convenience store, part grocery, part quick serve restaurant."

The retailer is working with Bentonville Butcher & Deli to run a quick service meat and sides counter in the back of the store. The store also features a Krispy Kreme doughnut stand, a coffee station and soda and Icee fountains.

Deisha Barnett, senior director of corporate communications at Walmart, told Arkansas Business that the company had no plans to build additional Walmart to Go stores at this point. Items sold in the 2,500 square-foot location are "priced at Wal-Mart everyday low prices," she said.

"We're about bringing value to shoppers whenever and wherever they want to shop," Ms. Barnett told Arkansas Business. "It's a quick stop — gas, a couple of items. It's about where they want to shop, when they want to shop."

Walmart's testing of this new convenience concept is in line with the company's announced intention to speed up openings of its small store formats, Walmart Neighborhood Market and Walmart Express. At the time this report was filed, Walmart had not responded to how the Walmart to Go concept varied from its Express format.

FINANCIALS:     [NYSE:WMT] [ ]

Discussion Questions:

What do you think Walmart is hoping to learn from the Walmart to Go test store that it can't learn from its other small store concepts? Do you think this new concept will dovetail with the Walmart to Go delivery service?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How likely is the Walmart to Go convenience store to go from a test concept to a broader rollout?

Comments:

What's the differentiator here?

There are a host of companies providing services like this; it's hard to imagine that Walmart's core strengths, logistics and assortment can beat those competitors. It will be interesting to see how this test fares.

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Cathy Hotka, Principal, Cathy Hotka & Associates

I think Walmart experiments a good deal and we should wait and see what the results of this trial look like before we rush to judgement.

Format tweaking is the best way to keep current with changing consumer demands. And, Walmart has deep enough pockets to do a great deal of testing.

That said, I think it's a mistake to automatically assume every test signals a change in direction, or to read too much into a very, very limited format trial.

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Ryan Mathews, Founder, ceo, Black Monk Consulting

Without knowing the specific differences between the Walmart To Go, Walmart Neighborhood, and Walmart Express stores, it is difficult to tell what they want to learn. The only difference I can see from this article is that Walmart To Go sells gasoline like other convenience stores. It could dovetail with the delivery service, but there are no specifics, so it is hard to assess.

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Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

I recently visited a Walmart on Campus store, which is closer to this new concept in size than the existing Express stores. Clearly, the target audience is different, but in terms of c-store execution, the store was a disaster. It reminded me of the quintessential c-store stereotype: dark, uninviting, rude staff and poor sight lines. The assortment was chock full of junk food and very little in the way of fresh or healthy options.

Admittedly, the Tempe store is merely a single example. Still, the solid c-store operators today are aligned with consumer trends towards healthy and fresh and, beyond the ability to scale, I see little opportunity for Walmart to one-up them in terms of experience or convenience.

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Kelly Tackett, Research Director, Planet Retail

Many companies that have been successful running large format stores have found that running c-stores doesn't work for them. There are many reasons why this is true.

One example is c-stores generally order products today in "eaches". This allows for a larger variety of items in a small space and doesn't require a large back-room inventory. Companies with larger format stores are set up to order and deliver in cases.

In Walmart's case, another might be the price points customers expect from them are not feasible in this small a store format.

Bottom line - Walmart will learn that because its small doesn't mean it easy.

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Steve Montgomery, President, b2b Solutions, LLC

The store size appears to be major difference here. Walmart Express stores are typically in the 12,000-15,000 square foot range. This new Walmart to Go concept is only 2,500 square feet, according to the reporting.

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George Anderson, Editor-in-Chief/Associate Publisher, RetailWire LLC

Walmart has become a true multi-format retailer and its launch-and-learn approach is smart, particularly as it competes against dollar stores and other mass retailers that are still relying heavily on tweaks to existing formats. Convenience continues to be the key word and Walmart is attacking it from all sides with new delivery options, tethered stores and small format launches. From lumbering giant to agile innovator.

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Carol Spieckerman, President, newmarketbuilders

Walmart has been experimenting for a long time now with Walmart Marketside, Walmart on Campus and now Walmart to Go. In my opinion, when Walmart tries to go too small, they really don't pull it off well.

In Phoenix, Walmart closed their Marketside stores. Their c-store concept is more about selling gas, so how hard can that be? Inside sales — I have no clue how it will turn out but Walmart can't go too far wrong with 2,500 sq. ft and some Krispy Kreme doughnuts.

David Livingston, Principal, DJL Research

The Walmart to Go c-store sells convenience, period. It's just a few steps from the parking lot to the covered awning that connects the fueling station with the front door. Higher margin prepared food and fresh food options are the main attractions. But the small grocery section features branded product such as breakfast cereal, shampoo, frozen food, diapers and dairy.

When a consumer goes in to grab some barbecue or a deli sandwich, they can also pick up milk and cereal for the next morning and something for lunch the next day. Or they can grab a six pack of cold beer to go with the pizza and smokes they want for the weekend with just a few steps taken.

I believe this is just one way Walmart is studying consumer behavior with respect to convenience and pricing. I would not be surprised to see these stores pop up in urban areas like Orlando or Dallas. But that will depend on ROI, comp sales and topline growth — that's what Walmart is chasing.

Kim Souza, Editor, The City Wire

It is good that Walmart is thinking outside its core strength of optimized supply chain and merchandising for large format stores. With many of the traditional markets saturated in stores and population shifting, Walmart needs to learn how to adjust its delivery, supply chain and store merchandising if it wants to reach into areas of high density population. In those places you can't back an 18 wheeler into a loading dock to unload or have huge staging spaces in the back. Living in downtown SF, I have seen some innovative ways stores like Walgreens and City Target handle simple things like receiving merchandise that you wouldn't have to worry about in the suburban store.

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Kenneth Leung, Director of Enterprise Industry Marketing, Avaya

I've said this for years and i will gladly repeat it now — Walmart is one of the few retailers that will continually push its own envelope and test/learn/adapt to the future marketplace. All due KUDOS TO WALMART — their habit of pushing ahead with an open mind and willingness to address the many challenges of various retail formats is an asset to the retail industry. Furthermore, it shows that they are an organization that continually tries to "get it right" for the shopper. I'm not the only shopper who notices and appreciates that effort.

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Anne Howe, Senior Vice President, Shopper Solutions, part of Acosta Mosaic Group

I applaud Walmart for continuing to test new formats and store sizes. The challenge they face is how to extend their existing competencies into these new formats and especially a 2,500 square foot store.

Walmart is building out a new portfolio of stores and services. They can afford to test and pilot, learn, and re-launch or kill an idea. Surviving the future in business is about growth by adapting faster than the competition. You can't get there by doing the same old thing and that means developing new competencies that could scale across multiple formats.

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Mohamed Amer, Vice President, Global Consumer Industries, SAP

It is more interesting that they are working with a local vendor for meat and deli. It's a potentially better offering than they could do on their own and maybe some sublease income too.

'storewanderer'

Always good to test new concepts. Too little info, and way too soon to tell if it will do well or not. Don't really see how this concept would dovetail with Walmart to Go; small format, limited SKUs, logistics questionable. Locations will of course be the major key here. C-store items, gasoline, good local food and Krispy Kreme seems like a good starting point, though.

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Warren Thayer, Editor & Managing Partner, Frozen & Refrigerated Buyer

The question that Walmart is putting to the test is if their distribution can support the big box pricing in a gas & go footprint with acceptable profit taking. It makes perfect sense to attack this market plan that is making a killing with higher prices being accepted for fast and convenient. The going wages for these jobs is fully in line with Walmart's wage comfort zone. So, if the logistics can be worked out, convenience stores all over the country will be dropping like flies in a fire storm from the fast build pace the company will put into action.

'gjarnoldjr'

Walmart told me the square footage is 5,000 feet, 3,500 SKUs, mostly branded product, but a very small number of Great Value items milk, hamburger buns, bread.

The hours are 5 a.m. to 10 p.m. daily and there are 14 employees,including the manager.

The store is nothing like an Express or Campus Store for that matter, it is a hybrid convenience store. And in case you are curious, I did a price comparison on 15 items - edible and non-edible and found consistent pricing with the Walmart Supercenter 3 blocks away and the Neighborhood Market 1.5 miles away. At least for now Walmart is not charging more for the quick-trip option in Bentonville.

Kim Souza, Editor, The City Wire

Walmart is testing the water with this concept. If you have a look at how retailing in the UK has gone into convenience/smaller format Stores, this is where future growth may come from.

Walmart's subsidiary in the UK, Asda, is trialing a number of concepts of similar formats.

'OSAexpert'

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