Wal-Mart’s Half-Size Big Box

Jul 12, 2004

By George Anderson

The lack of suitable acreage and local ordinances banning construction of so-called big boxes has forced Wal-Mart to rethink and reconfigure its Supercenter format.

The chain is currently testing its Urban 99 concept, a 99,000-square-foot store configured exactly the same as a Supercenter but in roughly half the space. The first Urban 99 store has been operating in Tampa, Fla. since January of this year.

Dan Barry, an analyst with Merrill Lynch, told the Associated Press, he was impressed with the Urban 99 store. He compared the current prototype to a previous effort by Wal-Mart to downsize its Supercenter format.

“In our visit to the store, we were impressed with the ‘feel’ and openness of the departments. Unlike the old 109,000-square-foot food units that were opened for a brief period of time in small towns, the Tampa store did not seem cramped,” he said.

Moderator’s Comment: What are the your thoughts on the strengths and weaknesses of the various Wal-Mart store formats
currently in operation? What will these mean for the types of stores the company rolls out in the future?

We find it funny that we’re now talking about 99,000 square foot stores as though they are small. These smaller format stores “only” require 12 acres of
land compared to 20 for a Supercenter.

Wal-Mart’s “really small” Neighborhood Markets are between 42,000 and 55,000 square feet. Will we next see Wal-Mart develop a “teeny, weeny” format of 20,000
– 25,000 square feet to go head-to-head with dollar stores and perhaps the Walgreen’s on the corner?

George Anderson – Moderator

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