Walmart observations

Predicting the demise of Sears & Kmart since 2017!
arizonaguy
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Re: Walmart observations

Post by arizonaguy »

storewanderer wrote: January 16th, 2021, 11:49 am I am curious what Wal Mart will do with the Neighborhood Markets. I think that is a low hanging fruit at this point that does not perform well and needs to be dealt with. It seems if they could figure a way to transition those into fulfillment centers for online orders, they may have something. But are they in the right locations for that? I am not so sure. The physical plant of the neighborhood market (size, structure) is quite similar to these Amazon Fresh stores...
I think Neighborhood Markets that serve or overlap a trade area with a Supercenter will be eventually closed (they've already done that with a few of the recent Neighborhood Market closures here in Arizona). Others will be set up similar to Amazon Fresh where they are optimized for pickup / delivery but they will continue to allow customers to shop in person.

Walmart opened a pickup only store in Lincolnwood, IL and I could see this format potentially expanded (although what's interesting about this store is that it's only 1 mile from a traditional supercenter): https://www.chicagotribune.com/suburbs/ ... story.html

One thing to remember about Neighborhood Markets is that most (all?) have pharmacies. Walmart could devote more space at some of them to their Walmart Health concept as well.

I don't see them completely eliminating their Division 1 or Neighborhood Market concepts however I don't see either format growing.
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Re: Walmart observations

Post by storewanderer »

arizonaguy wrote: January 16th, 2021, 9:17 pm I think Neighborhood Markets that serve or overlap a trade area with a Supercenter will be eventually closed (they've already done that with a few of the recent Neighborhood Market closures here in Arizona). Others will be set up similar to Amazon Fresh where they are optimized for pickup / delivery but they will continue to allow customers to shop in person.

Walmart opened a pickup only store in Lincolnwood, IL and I could see this format potentially expanded (although what's interesting about this store is that it's only 1 mile from a traditional supercenter): https://www.chicagotribune.com/suburbs/ ... story.html

One thing to remember about Neighborhood Markets is that most (all?) have pharmacies. Walmart could devote more space at some of them to their Walmart Health concept as well.

I don't see them completely eliminating their Division 1 or Neighborhood Market concepts however I don't see either format growing.
The Division 1 Stores that are left seem to be left for a reason of some kind: mainly they cannot expand them into a Supercenter and there is no suitable relocation option nearby. There are still a few 40 year old Division 1 Stores in the plains states that are only 40,000 square feet but I think those are very few at this point.

My view is the Supercenter is Wal Mart's only winning format. But the old Division 1 format seems workable too. Neighborhood Market does not seem to be successful (except on a limited basis in Northern California, and really that is only because of prices).
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Re: Walmart observations

Post by babs »

storewanderer wrote: January 16th, 2021, 10:53 pm
arizonaguy wrote: January 16th, 2021, 9:17 pm I think Neighborhood Markets that serve or overlap a trade area with a Supercenter will be eventually closed (they've already done that with a few of the recent Neighborhood Market closures here in Arizona). Others will be set up similar to Amazon Fresh where they are optimized for pickup / delivery but they will continue to allow customers to shop in person.

Walmart opened a pickup only store in Lincolnwood, IL and I could see this format potentially expanded (although what's interesting about this store is that it's only 1 mile from a traditional supercenter): https://www.chicagotribune.com/suburbs/ ... story.html

One thing to remember about Neighborhood Markets is that most (all?) have pharmacies. Walmart could devote more space at some of them to their Walmart Health concept as well.

I don't see them completely eliminating their Division 1 or Neighborhood Market concepts however I don't see either format growing.
The Division 1 Stores that are left seem to be left for a reason of some kind: mainly they cannot expand them into a Supercenter and there is no suitable relocation option nearby. There are still a few 40 year old Division 1 Stores in the plains states that are only 40,000 square feet but I think those are very few at this point.

My view is the Supercenter is Wal Mart's only winning format. But the old Division 1 format seems workable too. Neighborhood Market does not seem to be successful (except on a limited basis in Northern California, and really that is only because of prices).
Walmart closed many Neighborhood Markets in the Portland area. You could tell these locations struggled to get any traction by the vast amount of markdowns. Yet I think the remaining locations do quite well. There is a Neighborhood Market in the Murray Hill area that does a steady business. It helps that it is surrounded by three overpriced Safeway/Albertsons locations and little else near it. A good location seems to overcome a shaky format.
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Re: Walmart observations

Post by pseudo3d »

storewanderer wrote: January 16th, 2021, 11:49 am
I am curious what Wal Mart will do with the Neighborhood Markets. I think that is a low hanging fruit at this point that does not perform well and needs to be dealt with. It seems if they could figure a way to transition those into fulfillment centers for online orders, they may have something. But are they in the right locations for that? I am not so sure. The physical plant of the neighborhood market (size, structure) is quite similar to these Amazon Fresh stores...
The "Site to Store" system is already in place at many of the existing Supercenter locations, and I don't see a strictly online fulfillment center working on a mass scale, especially with fresh groceries. I remember in the early 2010s, SHLD premiered the "MyGofer" store, which basically was a fulfillment center (with a warehouse in the back for goods that were high-turnover) with a small showroom inside. Obvious shortcomings aside (pre-COVID + Eddie Lampert), it's not guaranteed to be an instant winner.

They really should just pull the plug on it and put it on the market (and a good number of NM stores are converted from traditional grocer sites).
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Re: Walmart observations

Post by Super S »

babs wrote: January 17th, 2021, 12:38 am
storewanderer wrote: January 16th, 2021, 10:53 pm
arizonaguy wrote: January 16th, 2021, 9:17 pm I think Neighborhood Markets that serve or overlap a trade area with a Supercenter will be eventually closed (they've already done that with a few of the recent Neighborhood Market closures here in Arizona). Others will be set up similar to Amazon Fresh where they are optimized for pickup / delivery but they will continue to allow customers to shop in person.

Walmart opened a pickup only store in Lincolnwood, IL and I could see this format potentially expanded (although what's interesting about this store is that it's only 1 mile from a traditional supercenter): https://www.chicagotribune.com/suburbs/ ... story.html

One thing to remember about Neighborhood Markets is that most (all?) have pharmacies. Walmart could devote more space at some of them to their Walmart Health concept as well.

I don't see them completely eliminating their Division 1 or Neighborhood Market concepts however I don't see either format growing.
The Division 1 Stores that are left seem to be left for a reason of some kind: mainly they cannot expand them into a Supercenter and there is no suitable relocation option nearby. There are still a few 40 year old Division 1 Stores in the plains states that are only 40,000 square feet but I think those are very few at this point.

My view is the Supercenter is Wal Mart's only winning format. But the old Division 1 format seems workable too. Neighborhood Market does not seem to be successful (except on a limited basis in Northern California, and really that is only because of prices).
Walmart closed many Neighborhood Markets in the Portland area. You could tell these locations struggled to get any traction by the vast amount of markdowns. Yet I think the remaining locations do quite well. There is a Neighborhood Market in the Murray Hill area that does a steady business. It helps that it is surrounded by three overpriced Safeway/Albertsons locations and little else near it. A good location seems to overcome a shaky format.
Walmart also opened the Neighborhood Market locations in some weird locations. In Vancouver, they opened one in part of a former WinCo (which moved to a new location nearby), in a strip mall shared with Target, which eventually closed. The other one in Vancouver is a new build on the site of an old Fred Meyer and is still open. It fills a need in that location, Fred Meyer moved to a new location down a hill that is not exactly walkable for the immediate neighborhood.

The Division 1 format is what Walmart became known for, and with the demise of Kmart as well as regional chains such as Shopko, there is still room for this format to exist especially in areas where local regulations won't allow larger stores. It also would likely work better in areas where Target is welcomed with open arms and is more similar in format.

Every one of Walmart's formats is suitable for some situations. They still seem to be figuring out where the Neighborhood Markets work best though.
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Re: Walmart observations

Post by BillyGr »

storewanderer wrote: January 16th, 2021, 10:53 pm The Division 1 Stores that are left seem to be left for a reason of some kind: mainly they cannot expand them into a Supercenter and there is no suitable relocation option nearby. There are still a few 40 year old Division 1 Stores in the plains states that are only 40,000 square feet but I think those are very few at this point.
Super S wrote: January 17th, 2021, 6:33 am The Division 1 format is what Walmart became known for, and with the demise of Kmart as well as regional chains such as Shopko, there is still room for this format to exist especially in areas where local regulations won't allow larger stores. It also would likely work better in areas where Target is welcomed with open arms and is more similar in format.
That makes sense - for instance I can think of one that we ran into a few years back in western NY state.
An area south of Rochester, which is fairly rural (surrounding a large state park). Most of the towns are the type that are lucky to have a small supermarket, possibly of a chain (somehow many are connected to Shop n Save out of Pittsburgh PA area).

This particular town is the one in the area that has a plaza with a standard Walmart and a larger chain grocery (Tops). So unlikely that Walmart would be able to expand to a superstore where they are, and most likely an area that is not going to approve them building a new superstore either, but also an area where they can do well with the existing store due to lack of anything similar in a nearby radius for all the non-grocery items.
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Re: Walmart observations

Post by Alpha8472 »

Walmart has a Neighborhood Market and a Division 1 store in Pleasanton, California and another Neighborhood Market a few minutes away in San Ramon. This has caused the Division 1 store to drastically lose business. They have cut employees and work hours at the Division 1 store. The Neighborhood Markets have cannibalized sales from the Division 1 store. The results are very few employees and many out of stocks at the Division 1 store. The Neighborhood Markets do not do much business.

If they close down the Division 1 store the business will simply go to Target. In the end, these Neighborhood Markets are more trouble than they are worth. The local cities ban supercenters so the Division 1 store cannot expand to a Supercenter.
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Re: Walmart observations

Post by storewanderer »

Alpha8472 wrote: January 17th, 2021, 2:02 pm Walmart has a Neighborhood Market and a Division 1 store in Pleasanton, California and another Neighborhood Market a few minutes away in San Ramon. This has caused the Division 1 store to drastically lose business. They have cut employees and work hours at the Division 1 store. The Neighborhood Markets have cannibalized sales from the Division 1 store. The results are very few employees and many out of stocks at the Division 1 store. The Neighborhood Markets do not do much business.

If they close down the Division 1 store the business will simply go to Target. In the end, these Neighborhood Markets are more trouble than they are worth. The local cities ban supercenters so the Division 1 store cannot expand to a Supercenter.
They can potentially use that Neighborhood Market to fulfill online orders within a certain radius of the store.

Unfortunately that San Ramon location was a very nice Ralphs (that was a mid 90's Albertsons build oddly placed there in the bay area-given Albertsons other bay area stores were early 80's at best) then became an Asian grocery store (may have gone through multiple owners) that for whatever reason did not end up surviving.
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Re: Walmart observations

Post by Alpha8472 »

Walmart is getting rid of their automated Pick Up towers. Apparently customers do not want to come into the stores due to the pandemic. Now they want parking lot pick up.

Many of the towers are now turned off. Some stores now have an area of refrigerators for employees to store grocery pick up items. This seems very labor intensive. You have Walmart employees running around acting as personal shoppers and then they deliver the merchandise or groceries to your car at no extra cost.

This is a money losing process. You also lose out on impulse buying. Most sales are spur of the moment impulse buys. Previously people would fill an entire cart full of impulse buys, but now they just buy a few items and leave it at that.
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Re: Walmart observations

Post by J-Man »

What they lose out in impulse buys they make up for with people like me who end up buying things they don't really need in order to reach the $35 minimum threshold for curbside pickup.
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