Dollar General acquires 41 Walmart Express stores

Dollar General announced this summer that it purchased 41 former Walmart Express stores and would relocate 40 existing stores to these sites this fall. Walmart Express was the small format concept that Walmart abandoned last year. At 12,000 - 16,000 square feet, they are significantly larger than traditional Dollar General stores, so the sites will allow for the larger "DG16" format, which include additional coolers and other store enhancements.

According to Dollar General, "the DG16 layout is designed to expand traffic-building categories in a more customer-friendly format with faster checkout." Initial rollout of the format has reportedly increased sales of perishables and front-end items.

The acquired stores are generally in the southern U.S.

Walmart slowing down growth of Neighborhood Market's smaller format stores

Walmart's US CEO Greg Foran said in an earnings conference call last week that the company would open 10-15 of the small format Neighborhood Markets this year, then hold off on further investment in the concept until results can be studied. As of January 30, Walmart operated 88 of the smaller-format stores, which are typically in the 12,000 - 16,000 square foot range.

Last year, Walmart opened 68 of the small format Neighborhood Market stores, far less than the 110-120 forecasted. These stores were once known as Walmart Express, but the company dropped the Express name late last year.

"Their supply chain is optimized for the supercenter," said Kantar Retail Analyst Dave Marcotte. "It can work reasonably well for a (traditional) Neighborhood Market, but when you keep going down in size, eventually it's going to become an issue."

Walmart plans to open 180 - 200 traditional Neighborhood Market stores this year, which typically range between 38,000 and 42,000 square feet.

BB&T Capital Markets Analyst Andrew Wolf told Supermarket News that there is not a lot of evidence to show that small stores really work. He continued to say that Aldi and Trader Joe's are the exception, not the rule.

Walmart to rebrand Express stores as Neighborhood Market

Walmart announced earlier this month that it would rebrand its Walmart Express stores as Walmart Neighborhood Markets since the two concepts serve similar missions.

At 38,000 square feet, Neighborhood Market stores are more than three times larger than Express stores, but they carry similar product assortments. Walmart has learned that customers at both stores primarily use them for fill-in grocery, last-minute meals and prescription refills.

Small format plans get bigger for Walmart

Walmart announced last week that it plans to open 270-300 new Neighborhood Market and Walmart Express stores in the next year. Late last year it had announced that they would open only 120-150 of the small format stores (Walmart to accelerate small format growth). The forecast for 115 new supercenters remains unchanged.

The existing 346 Neighborhood Market stores and 20 Walmart Express stores continue to generate positive results, according to the company. Last year, comparable-store sales for the Neighborhood Market rose 4%, driven largely by fresh food and pharmacy.

As a result of the revised store forecast, Walmart increased its capital expenditure budget for the U.S. division by $600 million to a range of $6.4 - $6.9 billion.

Walmart CEO Bill Simon said that small store expansion "will strengthen our market share and create greater efficiencies in our supply chain through a tethered approach that uses supercenters as a supply chain base, links our resources and provides a unique and connected customer experience."

Along with the announcement about the small store growth plan, Walmart announced that total company sales in the fourth quarter increased 1.4% to $128.8 billion, while net income and earnings per share fell 21% and 19.8%, respectively.

For the full year (2013), sales increased to $473.1 billion, while net income and earnings per share fell 5.7% and 3.2%, respectively.

The company blames a portion of its results on bad winter weather and a reduction in the federal government's Supplemental Nutrition Assistance Program. Walmart expects challenging market conditions to continue in 2014.

Wawa signs leases, plans to enter Florida market

According to the Orlando Business Journal, Wawa has signed "more than 10" leases in the Orlando, Florida market, and the retailer has indicated it will open as many as 100 stores in the state.

According to a Wawa regional real estate manager, site work on the first set of stores will begin in the next month or two, with openings taking place next summer.

Currently Wawa has 588 stores in Pennsylvania, New Jersey, Delaware, Maryland and Virginia. Fuel is offered at 298 of these locations (that's more than half for those keeping score).

I have previously written about Walmart's entry into the convenience store/gas arena and their roll-out of up to 350 stores per year, but I doubt the Greater Philadelphia area is high on their list because of Wawa's domination here. It'll be interesting to see, however, if the Big Ws battle it out in the Sunshine state!

Walmart Express debuts in Gentry, Arkansas

Recently Walmart unveiled the first of their Walmart Express stores to the press. According to reports, this Gentry, AK store actually looks like a smaller version of Walmart's 180,000 square foot store, even though it's only 15,000 square feet. The store has exposed pipes and yellow walls, carries about one-tenth of what a superstore carries, but still has a varied selection ("from bacon and milk to socks and DVDs," according to one story.)

According to Walmart, most Express locations will have a pharmacy, and some will sell gas. The stores will generally be located in towns too small for a full-sized Walmart, and in cities where a big store doesn't fit. Fifteen to 20 Express stores are planned by the end of January, 2012, mostly in Arkansas, North Carolina and Chicago. Looking ahead, it's possible they will build 350 stores per year.

In the mean time, the world's largest retailer is experimenting a bit. According to a story in the CSP Daily News, Walmart Express will let customers help determine what they should carry by posting signs that say, "If you want it, we'll get it," and by offering delivery right to the store.

Click here for an external picture of the new Walmart Express store.