Monday, April 30, 2007

Wal-Mart, Mini-Mart

The NY Post is reporting this morning that the Walmonster, frustrated in its efforts to penetrate urban markets like NYC, is looking to try a different tack, and is considering smaller, "Neighborhood Markets." The attraction of the smaller market is that it would give the mega retailer more flexibility and a greater revenue stream because of the higher per square footage return that smaller urban stores can generate.

As far as we're concerned, if Wal-Mart wants to come into the neighborhood and operate on the city's commercial strips it will remove an important argument that has been used against the company-that it drains business out of local neighborhoods and increases auto-dependent shopping. It remains to be seen, however, whether Wal-Mart will actually embark on this totally new business direction.

In the meantime, we continue to oppose all of the Walmonster's efforts and don't really anticipate that this new approach will gain any traction. It reminds us of the "Costco Fresh" format that that other box store mega-retailer tried to introduce into NYC at the end of the nineties. That innovation, as the current Wal-Mart fantasy will also, turned stale pretty fast.