Walmart's 183 Neighborhood Market locations — rebranded Walmart Markets — are part of the company's three-tiered push into the small-format store segment.
updated 3/17/2011 7:46:39 AM ET 2011-03-17T11:46:39

Hammer another nail in the coffin of mom and pop shops. Walmart is moving ahead with a plan to open hundreds of small-format stores, while Target is readying a modified version of its own big box.

Someday soon, most neighborhoods will be served by different kinds of Walmart stores in a variety of sizes and flavors. Large supercenters and discount stores for monthly stock-up trips, supermarkets for weekly groceries, and convenience stores for everything else. This has long been the company's plan, but Walmart is finally pushing forward with plans to open thousands of small markets.

Walmart announced it will open the first Walmart Express just 20 miles from its corporate headquarters in Bentonville, Ark., with a second location following soon on Chicago's South Side. The plan is to have 40 such stores open this year and hundreds more to come along with two other small formats: Walmart Market and Walmart on Campus.

Walmart's Neighborhood Market is being rebranded Walmart Market -- there are 183 units -- and Walmart on Campus is an even smaller, 3,300-square-foot convenience style format. A prototype that opened on the University of Arkansas campus in January is already exceeding the company's expectations, Bill Simon, president and CEO of Walmart U.S., told analysts.

Small formats are considered the future of big discount chains, especially when it comes to expanding in urban markets. Chicago in particular is considered a battleground for space, and a test market for both Target and Walmart as they aggressively try to open stores there. Target will open its first City Target store on Chicago's State Street in the historic building that housed the former Carson Pirie Scott department store.

Minneapolis-based Target has had a much easier time expanding in urban markets, and its development is often met with open arms and tax subsidies, while Walmart fights tooth and nail for every location with city government and union interests. Still, small formats are the key to Walmart's future and growth in the U.S., according to Simon.

What does this all mean for consumers? For those who enjoy the benefits of Walmart's low pricing, and the many who live in urban areas with few grocery options, it's a chance to take advantage of Walmart's and Target's low pricing. For those dismayed by the growth of big box stores it's one more thing to fear, but this universe of discount formats in various sizes is coming.

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