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Walmart to Go sells convenience, prices remain consistent

story by Kim Souza
ksouza@thecitywire.com

There are $415 billion reasons Wal-Mart is testing its first convenience store just three blocks from its home office and Walmart Store 100. The big box titan is determined to win more than the 10% marketshare it has for the quick-trip spending consumers do mid-week or when they are crunched for time.

Walmart to Go celebrated its grand opening on Wednesday (March 19) and though it’s been more than a year in the making, the real works starts now, according to Kelly Williams, manager of the hybrid convenience store.

Williams has spent the past decade as an assistant manager for a nearby Walmart Supercenter. Williams said he’s comfortable seeing lots of management in the store. He’s accustomed to it having worked so long in store 100, which is directly across the street from the home office.

TETHERED TO THE SUPERCENTER
Scott Swenson, store manager of Store No. 100, said this 5,000 square-foot convenience format is like his son. The junior is tethered to the senior store in that all products going into the convenience format are replenished from Swenson’s supercenter down the street.

“We have about 10 drivers who actually bring the products from the supercenter in a temperature controlled van restocking the convenience store every night. They are my overnight crew. Before the convenience store closes at 10 p.m. they send over a pick list, my group pulls the items and then restocks the convenience store around 4 a.m. before it opens at 5. During the day, we can also get product down here as needed,” Swenson said.

The cash registers in the convenience store are tied into the replenish system at the supercenter and Swenson said so far restocking the convenience store hasn’t been challenging.  

“For now we are closely monitoring the product mix to make sure we have the items our customers are looking for ... the market fresh and bakery items have been big movers along with the coffee and the F’real blending bar. The Bentonville Butcher & Deli has also been a big draw to the store,” Swenson said.

The Bentonville Butcher & Deli staff said they serve breakfast items until 10:30 a.m. each day and they then switch to lunch and dinner and feature a daily special entree. The deli closes at 8 p.m. daily, which is an hour later than its flagship deli/market down the street. These employees do not work for Wal-Mart.

PRICE CONSISTENCY
“The one differentiator we have against other convenience competitors is low pricing, said Deisha Barnett, Wal-Mart corporate spokeswoman.”The product mix may change from time to time, but the prices will be consistently low.”

The City Wire conducted a basket price comparison on Tuesday (March 18) of 15 items sold at the Walmart to Go, the nearby supercenter and a Neighborhood Market located 1.8 miles away.

Walmart to Go carries roughly 3,500 SKUs, or individual items, and many of those are consumer packaged goods. The City Wire shopping list included:
• Sara Lee white bread
• Tide Pods
• Angel Soft toilet paper
• Huggies diapers
• Jiff peanut butter
• Smuckers jelly
• Starkist tuna
• Miracle Whip mayo
• Classic Lays potato chips 
• Blue Bell ice cream
• 2% Milk - gallon 
• Cheerios
• Raisin Bran 
• Beneful dog food
• Glade aerosal spray
• Nestle bottled water (28 count)
• Duct tape

It took 10 minutes to find and fictionally purchase these items at Walmart to Go. There are no grocery carts, but there are handheld shopping baskets, but store attendants said they are available to help customers get items to their car.

At the Neighborhood Market less than 2 miles away, the same shopping list took 22 minutes to locate and fictionally purchase. That included securing a parking spot and using self check-out with no waiting.

The same experience took 35 minutes to accomplish at the supercenter just three blocks north of the convenience store. Just like at Neighborhood Market there was no waiting for self-check out, but the difference in time spent was the longer distance to the back of the supercenter for the milk and then having to go to the other side of the big box for the duct tape. Parking at the supecenter was also twice as far away as the two smaller venues. During this shopping trip the distance walked was slightly more than a half-mile.

The items were consistently priced at all three formats — 14 items were priced exactly the same, the bottled water at the supercenter did not have a price listed on the shelf, but it was $3.48 at the other two stores. Total spend, excluding the water was $47.60 at all three formats. 

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The retailer looks to be selling convenience in this new hybrid format. The real savings came in time, something there never seems to be enough of for most consumers today.

If time-strapped consumers shop more often at the convenience store for their grocery items, keeping the small store replenished could prove challenging. Barnett said there are plenty of eyes watching that issue.

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Comments

Small business is doomed...and people support this.

Convenience stores are dominated by independent owners. If walmart decides to saturate the market, it would destroy the lives of the independent owners and their employees. Do not support the walmart machine if you profess to support your neighbors and the people they employ.