John Stancavage: Wal-Mart eyes convenience store market
An experiment is under way 120 miles from here that could change the landscape — literally — of the convenience store industry. Retail giant Wal-Mart is testing a convenience store concept in its hometown of Bentonville, Arkansas. Called Walmart To Go, the 5,200-square-foot store offers gasoline, groceries and hot food, along with the usual staple items. The store, which opened quietly in March, employs 14 people. It is the only one of its kind at the moment for Wal-Mart. “We have no plans for more,” Wal-Mart spokeswoman Betsy Harden told me in a telephone interview. “Right now this is about listening to our customers and learning what they want.”
One thing Wal-Mart believes people want is discount pricing. Most items at Walmart To Go cost about the same as they would in one of the company’s full-size stores. Despite Wal-Mart’s attempt to play down the test, the retailer’s history shows it doesn’t do anything in a small way. After testing a grocery store concept, for example, Wal-Mart rolled it out aggressively, including locations in Tulsa. There now are 300 Walmart Neighborhood Market units nationwide.
More recently, the company has been opening Walmart Express stores, a scaled-down grocery concept. Company officials plan to open 300 of those this year. “These smaller-format stores are the result of us listening to our customers,” Harden said. “They are telling us they want new ways to shop.” With its convenience store test, Wal-Mart is seeking to learn what customers want from a grab-and-go retailer.
The Bentonville Walmart To Go is somewhat larger than many quick-stop stores. It has a bigger fresh grocery area, along with packaged foods, snacks, soft drinks, coffee, fresh-cut flowers and household items. Wal-Mart also partnered with Bentonville Butcher & Deli to offer hot meals throughout the day. In addition to soft drink dispensers, the company is trying a make-your-own-milkshake bar. Walmart To Go also has reserved some space for rotating stock. The store started selling wine in this area, then switched to summer items such as small grills, beach towels, pool toys and folding chairs. “We may switch again at the end of the summer to back-to-school items,” Harden said.
Wal-Mart is famous for putting weaker competitors out of business and making life miserable for bigger competitors. One Tulsa-based convenience store chain said, however, that it is not spending a lot of time worrying about a challenge from the fearsome retailer. QuikTrip, which operates 697 stores in 11 states, is busy doing its own testing and improvements. “We respect Wal-Mart,” QuikTrip spokesman Mike Thornbrugh said. “But we’re constantly changing every day ourselves based on what our customers want.”
QuikTrip is in the process of remodeling or moving every one of its locations. The stores are being updated to QuikTrip’s Generation 3 design, which is a larger store — 5,700 square feet versus Generation 2’s 4,200 — stocked with more hot food and groceries. “Everyone in the retail industry is trying to grow their business,” Thornbrugh said. “Even Home Depot is trying to sell gasoline.”
QuikTrip is a fixture on best-employer lists. It believes in paying its people well, promoting from within and weeding out poor-performing or bullying managers. This culture gives QuikTrip an advantage in any battle, its leaders believe. “If you don’t have the right people who can provide great customer service, then your concept — whatever it is — is not going to work,” Thornbrugh said. “We believe we have the best people in the industry.”
Wal-Mart, meanwhile, is experimenting with more than the convenience concept. For two years, it has been trying out a service that allows users to order groceries online and either have them delivered to their home or brought out to their car at a warehouse. “Those tests are going on in Denver and San Jose, California,” Harden said. Interestingly, the grocery-delivery service also is called Walmart To Go. I asked Harden whether the name of one of the businesses would have to change if it went nationwide. “We’re not that far along,” she said. So far, Wal-Mart has been able to determine that its convenience store concept is popular. “I talked to the manager recently,” she said. “And he said Walmart To Go has been attracting about 2,000 people a day.”
Largest convenience stores
| Rank Chain | Total S |
| 1. 7-Eleven Inc. | 7,790 |
| 2. Alimentation Couche-Tard (Mac's, Circle K) | 5,700 |
| 3. CST Brands Inc. (Valero) | 1,887 |
| 4. Casey's General Stores Inc. | 1,759 |
| 5. The Pantry (Kangaroo Express) | 1,567 |
| 6. Speedway LLC | 1,468 |
| 7. Hess Corp. | 1,354 |
| 8. Murphy USA Inc. | 1,184 |
| 9. BP America (am/pm) | 950 |
| 10. Kroger Co., Convenience Division | 784 |
| 11. Suncor Energy Inc. (Petro-Canada) | 759 |
| 12. Chevron Corp. (ExtraMile) | 720 |
| 13. QuikTrip Corp. | 697 |
| 14. Pilot Flying J | 690 |
| 15. Sunoco Inc. | 650 |
Source: CSP
No comments:
Post a Comment