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One-stop shopping seen as future.

WASHINGTON, Mo.--For the second time in slightly more than two months in early 1988, Walmart unveiled a new store format.

The debut of the company's first Supercenter here in early March marked the first time that Walmart ventured into the food business on its own. The company's Hypermart USA stores that debuted at the end of December 1987 saw the company partner with an established supermarket operator for the food side of the outlets.

Executives said that while both concepts are still experimental, they represent what Walmart sees as the future of mass market retailing, where consumers will demand one-stop shopping.

The Supercenters, they say, will be located primarily in smaller markets, while the larger hypermarkets will fill the need for one-stop shopping in more populous areas.

The 126,000-square-foot Supercenter with more than 1,100 parking spaces was expected to be a magnet for shoppers from the small towns surrounding Washington, and executives said it would likely draw consumers from as far as 25 miles away.

They also said the store could be the start of something new for Walmart, noting that if the concept proved successful, the company would consider building a Supercenter in any market with demographics suitable for a Walmart store.

The 30,000-square-foot food portion of Walmart's first Supercenter carried about 6,500 SKUs and included full-line meat, produce and dairy departments, a large grocery selection, and a snack bar, deli and bakery.

While it occupied only about a quarter of the floor space, the food section was expected to generate nearly 40% of the store's sales, executives said.

Due to the lower margins that food delivers, they said the company might see its Supercenters generate lower profit margins than traditional Walmart discount stores.

"We will necessarily make less because of the mix," executive vice president of merchandise and sales Bill Fields said at the opening of the first Supercenter, "but volume drives your expenses down, so the margin may approach those of a regular Walmart."

Meanwhile, the store's 83,400 square feet devoted to general merchandise offered shoppers nearly 60,000 SKUs of branded and private label items across 36 departments, including apparel and accessories, jewelry, an auto center, a lawn and garden center, a pharmacy, and a one-hour photoprocessing center.

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Title Annotation:50 Walmart
Publication:MMR
Date:Jul 23, 2012
Words:378
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