Wal-Mart, Kmart draw guns in Texas supercenter duel

Discount Store News, April 4, 1994

VICTORIA, Texas -- Victoria is the arena for two supercenter firsts:

* The first time that WalMart and Kmart have gone head-to-head with supercenter competition;

* The first time that WalMart has paired a Sam's Club with one of its supercenters.

Kmart beat Wal-Mart to the opening gate in Victoria, launchng a Super Kmart Center in January. Wal-Mart followed with its opening festivities March 16.

Just a week before, Wal-Mart had opened a Sam's Club in Victoria. Wal-Mart chief executive officer David Glass said there may be other such pairings of a club and supercenter. Wal-Mart has paired dozens of its conventional discount stores with Sam's Clubs.

The second direct competition of two supercenters will be in Gainesville, Ga., an Atlanta suburb, later this month, when Wal-Mart opens its supercenter there. Kmart again beat Wal-Mart to the punch in that market, opening a Super Kmart Center there last fall.

Kmart can be more nimble on its feet about hopscotching around the country because it is using wholesale food distributors, primarily Felming but also Supervalu, to supply fresh food to its Super KMarts. In contrast, Wal-Mart is supplying food from its own food distribution centers in Arkansas and Texas, so expansion of its supercenter network is tied more closely to the locations of the DCs.

Of course, supplying its own food may offer WalMart a cost advantage over Kmart. Given that it will have to be competitive on food prices, Kmart enters the Victoria fight with built-in margin pressures, as well as the disadvantage of having to compete on food sales with a Sam's Club.

Victoria lies a few miles inland from the Texas Gulf Coast, about half way between Corpus Christi and Houston.

The new Wal-Mart Supercenter there measures 204s,482 square feet, or twice the size of the conventional Wal-Mart is replaced. It is slightly larger than Super K. Both supercenters are open around the clock.

The new Victoria Wal-Mart Supercenter also operates a garden center, pharmacy, vision center, one-hour photo lab, Fantastic Sam's hair salon (a leased operation), tire, battery and oil lub express, video rental and a McDonald's restaurant.

The Victoria supercenter is one of about 70 Wal-Mart combo stores and one of the 230 Wal-Mart stores in Texas. Wal-Mart plans to open about 60 more supercenters this year.

The Victoria Super K is one of about 23. Kmart plans to open about 55 this year.

The Victoria Sam's Club is one of 52 in Texas and 419 nationally. It stocks 3,500 skus, including food.