Food/drug combo ushers in format of the future - reprint of article about Wal-Mart from 10/26/98

Discount Store News, Oct, 1999

BENTONVILLE, ARK., OCT. 26, 1998

Wal-Mart's assault on the nation's supermarket and drugstore operators has intensified with the recent debut of the discounter's Neighborhood Market food and drug combo store format.

The 40,000-sq.-ft. stores, located in Bentonville and Sherwood, Ark., represent a promising new growth vehicle for Wal-Mart to capture food and H&BC market share from competitors that position themselves as a more convenient alternative to the retailer's large supercenters, Sam's Clubs and discount stores.

As many as eight Neighborhood Market stores are reportedly planned, with two additional units scheduled to open in early November in Springdale and Fort Smith, Ark.

However, before any official rollout takes place, Wal-Mart will analyze its new concept extensively and monitor customer reactions closely.

While company officials were emphatic about calling the four stores a test, they also kept alluding to grander possibilities. "You are at the start of something that has the prospect of growing into another great company," said Tom Coughlin, executive vp and coo of the Wal-Mart Stores division.

Glass also hinted at the Neighborhood Market's potential by pointing out how the retailer's other major accomplishments also began as experiments. He recalled that 36 years ago on the town square in nearby Rogers, Sam Walton opened an experimental discount store ...

As Wal-Mart's supercenter rollout was rapidly reshaping the contours of the retail industry, the debut of its Neighborhood Market concept proved that Wal-Mart was already experimenting with formats that could constitute a future wave of growth for its domestic operation. Although still classified as a test, the combo store operation is widely considered the company's next great U.S. growth vehicle.