Wal-Mart Plants Neighborhood Markets in Alabama

Mar 11, 2002

Wal-Mart’s four-year-old Neighborhood Market grocery concept will be applied in Alabama early next year, when the first of several Birmingham-area locations is set to open. The retailer has identified seven locations around town that could eventually host Wal-Mart Neighborhood Markets, according to Mark Peeples, a principal with Birmingham’s Concordia Southeast LLC, which handles many site-selection efforts for Wal-Mart in the area.

“The Neighborhood Market concept allows Wal-Mart to do business on sites too small for a SuperCenter. This is more aimed at the shopper who goes to the grocery store two or three times a week. And they’re taking advantage of a distribution system that is already set up,” says Chuck Gilmer, editor of The Shelby Report, an Atlanta-based grocery trade publication.

Neighborhood Markets employ 80-100 people and carry some 28,000 items – 30 percent of that in general merchandise. Wal-Mart operates 31 of these markets in Arkansas, Texas and Oklahoma. It plans to open 15 to 20 such stores during the next 12 months, in addition to 50 traditional discount stores, as many as 185 new SuperCenters, and about 50 Sam’s Club locations in the United States alone, according to the company web site.

Moderator Comment: Does the Federal Trade Commission
need to reevaluate how it determines anti-trust behavior in the grocery industry?

Some of the critics of the FTC’s quashing the Ahold/Pathmark
deal (and its limiting role in others) argued that the agency’s view of competition
in the markets served by the chains was too limited. The argument was that these
businesses had to compete (eventually if not then) with Wal-Mart in its various
formats. [George
Anderson – Moderator

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