Tuesday, January 15, 2008

Wal-Mart's New Concept

Leveraging the success of its grocery sales, Wal-Mart (WMT) has an new small concept rolling out called "Marketside".

The new stores are about 20,000 sq ft, a 10th of the size of its Supercenters and unlike them, the planning process for the new Marketside stores does not require public consultation. This will pave the way for Wal-Mart to grow into cities and states where its Supercenter expansion has been slowed by union-backed political opposition. Huge.

The new logo has green lettering with a fancy tomato, egg and grape topped by a Wal-Mart blue star. Wal-Mart also registered new trade names in recent months, such as City Thyme and Field & Vine, which one would think would be used for private-label fresh food offerings.

This is a great move for Wal-Mart. Its scale will make it a low cost producer and this allows it to get into localities without the public rancor that seem to accompany them currently. It also seems to show that Wal-Mart is paying particular attention to the wants and tastes of potential customers it current does not serve.

There is no reason Wal-Mart cannot run a low cost upscale grocer and be successful at it.

Disclosure: Long WMT

Todd Sullivan's- ValuePlays

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