The "Small Mart" food retailing battle is enjoined: Wal-Mart will open its first, new small-format grocery markets in Arizona later this year, and do battle with British retailer Tesco's Fresh & Easy Neighborhood Market stores, the first of which opened in Arizona a little over a month ago.
As our readers know, we've been reporting on, writing about, and analyzing the small format retail food store revolution in the U.S. for the last six months or so. A major part of that reporting has been about Wal-Mart's small grocery store format development, which a group of the retailer's key executives worked on for a number of months last year in San Francisco.
(Type in the keywords (one set at a time) Wal-Mart, small marts, small format stores, small format revolution, in the search box at the top of the blog and you can read our numerous pieces on the topic.)
Our (much bigger) friends at the Financial Times have also been covering the Wal-Mart small- format grocery store story and its developments.
The Financial Times is reporting in tomorrow's edition that Wal-Mart will open small-format grocery markets named "MarketSide" in Arizona later this year, going head-to-head with Tesco's Fresh & Easy Neighborhood Market stores in that market.
The new "Small Marts" are about 20,000 square feet in size, a 10th of the size of the retailer's Supercenters, but about 5,000 to 7,000 square feet larger than Tesco's Fresh & Easy stores, which average about 13,000 to 15,000 square feet.
The Financial Times reports Wal-Mart has secured leases on four properties south-east of Phoenix for the 20,000 square foot "MarketSide" grocery stores. Some of these locations are only a mile away from Fresh & Easy store locations in the region.
According to tomorrow's Financial Times, the stores should open this summer. That fits with what our sources have been telling us. They're predicting a July-August opening, although they didn't have the exact store locations.
The logo for the "MarketSide" stores, which is filed in documents with the various municipal planning departments in Arizona, is a stylised tomato, egg and grape topped by Wal-Mart's signature blue star. The lettering is in green.
The logo obviously connotes freshness. We've been reporting in our stories for the last few months that the small-format stores would offer extensive prepared foods selections, like Fresh & Easy stores do, and believe the logo--along with other information we have--reinforces our belief.
We've also reported, as has the Financial Times, that as a result of its San Francisco team's development work, Wal-Mart trademarked the names "City Thyme" and "Field & Vine." We reported these were two of a number of store names the retailer was considering for its new small-format grocery stores, and still believe that to be the case. However, obviously they didn't use either of those names--or any of the others they were considering.
The Financial Times suggests some industry analysts think the retailer might be going to use these names on a new private label line of prepared foods or grocery products (or both) for the new, "MarketSide" stores.
We agree with their analysis. Both names fit well with the "MarketSide" logo described above--and both evoke freshness and naturalness. One of our sources also told us in late December that he was told by someone he trusts that a Wal-Mart executive was talking to a couple of natural foods-oriented companies about private label product "opportunities."
All four of the Wal-Mart "MarketSide" store sites are street-corner properties that were formally occupied by drug stores, the Financial Times reports.
The locations of the four Arizona stores are: Mesa: 7561 E Baseline Road, Gilbert: 910 E. Elliott Road, Chandler: 950 N McQueen Road, Tempe: 838 W Elliott Road.
Fresh & Easy currently has five stores in Arizona, and many more are set to be opened this year. Three of the Arizona Fresh & Easy grocery markets are located in Mesa, one is in Chandler, and the fifth and newest store is in Scottsdale. That market, which is at 10781 N. Frank Lloyd Wright Blvd., opened three weeks ago before the Christmas holiday. Tesco has plans to open stores in Gilbert and Tempe soon.
In addition to its Supercenter grocery and general merchandise stores, and it's basic Wal-Mart stores, the retailer also operates its Neighborhood Market format. These stores are essentially what they sound like: basic, full-line supermarkets. The stores are about 48,000 square feet and sell a complete selection of grocery store items in a somewhat smaller space than a superstore.
Last week, Wal-Mart announced it hired British grocery retailing veteran Jack Sinclair to head its food retailing business. Sinclair worked as an executive for Tesco for many years, as well as being a former exec for UK Safeway, which is now part of the Morrisons' chain.
Sinclair knows Tesco well, and has been observing its launch of the Fresh & Easy Neighborhood market stores in the Western USA closely. Upon hearing of his hire, we knew it would be a go for Wal-Mart's small-format stores. The fit was just too tight for it not to happen.
The development of and decision making process to go forward with the "Small Marts" hasn't been easy within Wal-Mart. And until recently it wasn't a lock that the mega-retailer would go forward with the program. However, the world's largest retailer doesn't want the world's third-largest retailer, Tesco, to steal market share from it on its home turf--the USA.
Tesco and Wal-Mart, which owns the UK supermarket chain Asda, are battling for market share in Britain, Tesco's home turf, so--the battle is now fully-enjoined on both sides of the Atlantic.
Editor's Note: We're following this story closely, and will have some further information and developments to report as we are able to talk with our sources on Monday. Additionally, we're working on an analysis piece about how Wal-Mart's decision to finally join the small retail food store format revolution will impact the other retail players already in the game. Stay tuned.
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