Wednesday, October 12, 2011

Walmart Closing its Four Marketside Small-Format Markets in Arizona October 21

The soon to be vacant 'marketside by Walmart' store in Tempe, Arizona.

Walmart Stores, Inc. will close its four small-format "marketside by Walmart" fresh food and grocery markets in metropolitan Phoenix, Arizona on October 21, Fresh & Easy Buzz has learned.

Walmart representatives met with the employees of the four stores, located in the Phoenix metro-region cities of Mesa, Gilbert, Chandler and Tempe, today, informing the workers that the four stores opened on October 4, 2008 will be closed October 21, and that "marketside by Walmart" will cease to exist as a format for the retailer, according to our sources, which include employees at two of the four stores who we talked to shortly after they were told of the closings. [Click on this link to read stories about the October 4, 2008 openings.]

Walmart currently has no plans to open stores in the soon to be vacant "marketside by Walmart" locations under either its Walmart Market/Walmart Neighborhood Market smaller-to-medium format chain or its new Walmart Express small-format, according to our sources.

Walmart Stores, Inc. held its Annual Meeting for the Investment Community today. Presentations were made by CEO Mike Duke, Walmart U.S. chief Bill Simon and other key senior executives. But no mention was made of the retailer's plans to close the four "marketside by Walmart" stores, perhaps because the store employees were being told of the October 21 closure plans at the same time the investment meeting was taking place.

That Walmart Stores is closing the small-format stores (originally called "marketside") it opened as a test three years ago doesn't come as a surprise to Fresh & Easy Buzz. For example, we reported in September 2010 that Walmart planned to either close or convert the four "marketside by Walmart" stores to a different format by early this year.

We were correct about Walmart's plans to close the grocery markets at the time, although according to our sources the retailer eventually decided to wait until the fall, this month, to do so for a variety of reasons. As such, we did get the specific date wrong.

The fact of the matter is, as we've previously reported, Walmart essentially decided to shelve the "marketside by Walmart" format in late 2009. In 2010 the retailer made the decision to not open any additional stores and to close the four units in Arizona before the end of 2011.

Instead of "marketside by Walmart" becoming its small-format strategy for the U.S., Walmart then decided to go forward with a dual smaller-format store strategy: Walmart Market (smaller-to-medium format stores in the 28,000-to-60,000 square-foot range) and the small-format Walmart Express, which averages 10,000 (some urban versions like the one recently opened in Chicago) -to- 15,000 square feet.

In addition to the first urban region Walmart Express opened last month in Chicago, there are four other units, two in Arkansas and two in North Carolina. Those stores, all in rural towns, are in the 15,000 square-foot range.

In this December 21, 2009  piece - Wither Walmart's Small-Format 'marketside' Stores and Format? - we wrote about the eventual decline of Walmart's "marketside by Walmart" small-format experiment. On October 21 the final chapter of the test (and the withering) will come to an end when the four stores in metro Phoenix, Arizona are closed.

Perhaps it's appropriate (and also a bit ironic) that the four stores involved in Walmart's first new small-format experiment of its modern era, "marketside by Walmart," are located in metro Phoenix, because like in the story of the mythical "Phoenix" that rose from the ashes, a revamped smaller-to-medium format version of Walmart Neighborhood Market and a new small-format convience-oriented grocery chain, Walmart Express, have risen from its ashes.

Walmart U.S. president Bill Simon said at the investor conference today that the retailer plans to open an additional six Walmart Express stores by January, 2012, for a total of 11.

The format is still in test mode, according to Simon, and Walmart will decide whether or not it will go forward with more 'Express' stores once all 11 units are open and have a little history behind them.

"The roll out of Walmart Express is predicated on the review of our pilot program, and the opportunity to build greater scale in a particular market," he said.

Simon also said today that Walmart plans to open between 80-100 of the smaller-to-medium-format (28,000-60,000 square-foot) Walmart Market/Walmart Neighborhood Market stores next year.

This is a major smaller-to-medium format push for Walmart. To put the 2012 plans into perspective, Walmart has opened just under 200 Walmart Neighborhood Market stores in the U.S. since it launched the format and chain about 15 years ago.

The original Walmart Neighborhood Market stores averaged about 42,000 square-feet. The 28,000-60,000 square-foot Walmart Market/Walmart Neighborhood Market format is a revamp of the format.

But despite all this small (format) talk, the mega-supercenter will continue to be Walmart's primary format going forward over the next couple years.

Bill Simon said today Walmart plans to open 130-135 supercenters next year. The new supercenters will average 90,000-120,000 square-feet, although many will be larger than that. As such, the amount of new supercenter square-footage dwarfs that of the planned new smaller-to-medium and small format stores.

Additionally, he said Walmart plans to open as any as 385 new stores in the U.S. over the next two years, with the vast majority of those new units being supercenters.

The "marketside" brand name will live on in the form of Walmart's fresh foods brand (see here) of the same name, which includes a variety of fresh-prepared foods, deli items, bakery goods and packaged fresh produce.

The fresh food products under the"marketside" brand are sold in most of Walmart's supercenters, Walmart Neighborhood Market and Walmart Express stores.

But as Walmart expands its smaller format store base in the U.S. over the next couple years, none of those numerous planned new smaller stores it opens will be "marketside by Walmart" units.

Related Stories

December 21, 2009: Wither Walmart's Small-Format 'marketside' Stores and Format?

October 19, 2010: Walmart's Four 'Marketside by Walmart' Stores Set to Be Closed Soon Never Came Close to Weekly Sales of $100,000

October 11, 2010: Walmart to Outline its Urban-Focused Smaller-Format Grocery Store Plans Wednesday; What Might Be In-Store?

September 23, 2010: Revisting 'marketside by Walmart': Format As We Know it On the Way Out But Some or All Of the Four Stores Could Be Converted

September 9, 2010: Walmart Plans to Close Arizona 'marketside by Walmart' Stores, Dump Format By Year-End or Early 2011

October 6, 2008: 'The Promotional Pundit:' How Wal-Mart Can Use its Supercenters to Create Customers For its New Small-Format Marketside Stores in Arizona

Additionally, click here, here, herehere and here for more related stories. Also see the links on the pages.


Anonymous said...

I love this store and shop there a lot. I'm really going to miss my Marketside :( One of the nice things about shopping there was convenience, great selection/pricing, and quick to get in & out. It was a nice break from the crowded mass gridlock at Fry's down the street. I also enjoyed the personable and friendly Marketside staff. I'm REALLY bummed out they are closing. I thought they were doing well on the $ side of things.

soon-to-be-ex-marketside said...

As a soon-to-be-ex worker at one of the marketside stores who was there from the start, I believe if Walmart had paid more attention to marketside it might have been more successful. We had very little if any promotional kinds of activity like ads, coupons since 2009, little merchandising support at all, ever, and pretty much were the stepchild of the stepchild at Walmart.

I don't understand why they didn't try a marketside store or two elsewhere either, like in a city or more urban rather than suburban region. Having 4 stores all in the same area only doesn't seem like a smart test to me.

There was some talk about putting Walmart Express stores in the closing marketside's but I don't think that's going to happen at all now.

I know some of my co-workers read the blog so hope they comment.

Anonymous said...

Perhaps this is the format Walmart should be putting/testing in Chicago, New York and Washington D.C. right now. It's more urban than suburban. Doesn't fit the cities in Arizona. But I think it could do well in parts of NYC and D.C. Seems like WMT took a backwards approach, testing an urban model in suburban towns, a guarantee it would fail.