Wal-Mart's new '99' center packs in the potential

DSN Retailing Today, Feb 9, 2004 by Mike Troy

TAMPA, FLA. -- Combine a 200,000-square-foot Wal-Mart supercenter with a 40,000-square-foot Neighborhood Market and the result is a hybrid concept referred to internally at Wal-Mart as the "urban 99 proto."

As the name implies, this 99,000-square-foot prototype that opened last month is designed to serve densely populated markets where the lack of real estate has prevented Wal-Mart from building larger stores. Its newest prototype occupies just 10 acres of land, roughly half the amount needed for a large supercenter, along Dale Mabry Highway in Tampa at a site that was once a Sam's Club.

Although the size of the urban prototype has been reduced, 99,000 square feet is still a large store, and the concept remains true to its food and general merchandise roots. The floor plan is roughly the same as found in larger stores, yet it has a unique appearance due to the blending of attributes from Neighborhood Markets and supercenters.

For example, the presentation of food, perishables and dell bears a striking resemblance to Neighborhood Market, a situation explained by the fact that former senior vp of Neighborhood Market, Ed Kolodzieski, was involved in the store's creation prior to his recent promotion as coo of Wal-Mart International. Neighborhood Market influences are evident in the deli, where a rotisserie chicken cooker was added, as well as a Grab It and Go coffee and pastry area where customers pay on the honor system. The store also has a single entrance, whereas supercenters and some large discount stores have dual entrances.

The supercenter influence is most evident on the general merchandise side of the store. The product mix is nearly identical to a supercenter, with regional and divisional Wal-Mart executives in attendance at the store's Jan. 21 grand opening reporting a minimal reduction of SKUs and categories. Notably absent are a Tire and Lube Express department, leased areas across the front of the store and a food service component. Most house a snack bar or McDonald's restaurant.

In addition to these changes, the store also contained several new merchandising features and operational-oriented changes related to its reduced size. Among these were:

* A strong emphasis on health care. The store features a dual-lane drive-through pharmacy, and the beauty care, pharmacy and optical departments are located just inside the store's single entrance.

* Extensive merchandising of Hispanic-oriented products throughout the store in the food, hardline and softline categories. The store also features numerous signs in English and Spanish.

* A combination photo lab and cellular phone service department in a bullpen configuration at the rear of the store between the refrigerated foods and home entertainment departments.

* The holding capacity of fixtures was increased to improve the likelihood of being in stock. Apparel fixtures were modified, gondola shelves were lengthened to 22 inches from 16 inches and the depth of freezer cases was increased to 34 inches.

* The addition of a 6,000-square-foot mezzanine level at the rear of the store with space for offices, training and an employee break area. It also functions as a stockroom and storage area for layaway and is accessed by a freight elevator and a specially designed lift for the layaway department.

Since the efficient use of space was a significant consideration in the design of the store, planners also reduced the size of fixtures, such as the jewelry display case, the sporting goods bullpen and the fabric cutting tables. Outside, in the small lawn and garden department, space was saved by stacking landscape materials vertically in steel racks similar to those commonly seen at The Home Depot and Lowe's.

While Wal-Mart has attempted to replicate the supercenter shopping experience in a format half the size, customers may not like some of the change made to achieve that goal. In some hardline and consumable departments, aisles have been narrowed to the point where shoppers will have to exercise caution when passing each other with carts. In the apparel departments, shorter customers may find it difficult to access garments hung from the top of grid wall fixtures. The store's single entrance may also be an issue since it is located on the far right side of the store. Customers shopping for food have to go the far left side of the store, whereas at larger supercenters they have the option of entering on the food side of the store.

It is doubtful whether these issue will prevent residents near the store from shopping at this new Wal-Mart since currently there are few nearby shopping options for food and general merchandise at the prices offered by Wal-Mart. That is a situation in which many urban residents find themselves, which explains why Wal-Mart developed an urban prototype concept. If successful, the format creates expansion opportunities in urban areas where suitable real estate is difficult to find and often requires the demolition of existing structures or assembling several parcels. It is virtually impossible for Wal-Mart to build a typical, single level supercenter in the 180,000-square-foot to 200,000-square-foot range, since those units require between 20 and 25 acres.