Through a special arrangement, presented here for discussion is a summary of an article from Convenience Store Decisions magazine.
It appears that Walmart plans on setting up hundreds of convenience stores in the near future and many of these will be completed before 2012. Why is Walmart getting into the c-store business, you wonder? Well, considering many of its superstores also sell fuel, and more and more patrons are using the Sam's Club card and Walmart credit cards to buy fuel, it may as well have a c-store out front for everybody.
Can Walmart compete in this venue?
Of course, Walmart already has a captured audience, which will only grow as the price of fuel goes up higher and higher and consumers are trying to squeeze a few more pennies out of each gallon. Also, Walmart will be able to sell products in its c-stores at a price point cheaper than other convenience stores, as it has a big buying advantage with its vendors. Does this mean other convenience stores will lose business to Sam's Club and Walmart c-stores? Yes, it could throw a loop in the industry, but it probably will not be too big a deal since Walmart is only planning a few hundred of these stores between 2011 and 2012.
In the future, it could be more devastating to the industry if Walmart starts throwing up convenience stores all over the place, but I don't see that happening.
Still, it could be a challenge for those c-stores in close proximity. When Walmart entered the oil change industry and started selling tires, for instance, both tire stores and quick lubes dealers were hurt.
And Walmart is known for low-price, high-volume strategies. They do even better during difficult economies, or when the rest of the industry is either inflating prices to customers, or the price of those commodities skyrocket. That's what's happening with the price of oil, thus why gasoline is so expensive. Perhaps, in a way, it will just keep everyone honest and, what the heck, a little competition is always healthy for an industry.
Indeed, this could very well change the entire dynamics of the industry, and Walmart may even put these minimart type stores in locations other than its own current properties at some point in the future -- who knows?