Wal-Mart Says “Watch Out Tesco!”
By LC on Jan 15, 2008 in Commercial Real Estate, Strip Malls
Strip Malls Soon To Get A New Player with Marketside
Today Wal-Mart announced plans to roll out “Marketside,” a concept intended to compete head on with the UK Giant Tesco, doing business in the U.S as Fresh and Easy.
The story is still developing, and the figures in the Forbes article below are incorrect. They state that the Marketside stores will be “a tenth the size of Wal-Mart’s 200,000 SF stores, even “smaller than Fresh and Easy stores that are 10,000 SF.”
First, Fresh and Easy stores in the U.S and 14,000 square foot, not 10,000 square feet, and clearly 20,000 is larger than 10,000 so we do not have the full store, which certainly is characteristic of the cloak of secrecy typical of Wal-Mart. No geo-targeting has been released from the giant discounter.
Strip malls are entering a new paradigm with the densification of the suburbs, and Marketside provides yet another fine mini-anchor for strip mall developers. A possible downside could be Wal-Mart’s ability to be a category killer, maybe with any size.
On Jan 15, 2008, SportsCuts said:
It is a very interesting concept. I think Wal-Mart will have trouble catering to an upscale market, which appears to be Fresh and Easy’s niche.
Time will tell I guess.
On Jan 15, 2008, LC said:
I am going to disagree with you. Here is the comment I posted on www.retailwire.com
Both Fresh and Easy and Marketside are a new paradigm for the U.S., responding to the densification of the suburbs.
Wal-Mart has several advantages over Tesco. Initially, they have a must better understanding of their existing customer metric, and the demographic and sociographic properties of their target areas. They have the capability to actuate a successful neighborhood pod retail concept through sheer buying power and vendor relations as well as familiarity with top SKUs in their conventional grocery store, traditional Wal-Marts, and the Super Centers. Another rather basic factor is that Wal-Mart has the reputation of paying up for a site they want, and Tesco is attempting to drive extremely difficult rent and land lease deals with their 14,000 SF concept which we are seeing in Northern California.
I believe this will be Hollywood and Blockbuster all over again, and that both ops will share the identical niche. The fundamental problem with this vertical is that the presence of two in very close proximity does not drive additional synergistic sales; these are convenience stores, not comparison shopping stores.
John Wallace, Owner, www.LocalCenters.com
On Jan 15, 2008, SportsCuts said:
I keep remembering all those efforts by McDonald’s to capture a share of the upscale dining market and failing each and every time because when you think of McDonalds you think of burgers and fries.
How far will Wal-Mart go to distance itself from this new venture, or, is the market they are after the same one they currently cater to?