WAL-MART TO TAKE MARKET FORMAT EAST TO MEMPHIS

BENTONVILLE, Ark. -- Wal-Mart Stores here said last week it is crossing the Mississippi with its Neighborhood Market format.The company told SN it will build two of the food-drug combo, conventional-sized stores in the Memphis, Tenn., area, which will make them the first Neighborhood Markets outside Arkansas, Oklahoma and Texas and the first east of the Mississippi.Industry observers told SN the move

BENTONVILLE, Ark. -- Wal-Mart Stores here said last week it is crossing the Mississippi with its Neighborhood Market format.

The company told SN it will build two of the food-drug combo, conventional-sized stores in the Memphis, Tenn., area, which will make them the first Neighborhood Markets outside Arkansas, Oklahoma and Texas and the first east of the Mississippi.

Industry observers told SN the move into a new market probably does not signal the beginning of the format's wide-scale rollout, which they said is still likely to be three or four years down the road.

Meanwhile, they said, the company continues to tweak the format in a variety of fashions, including:

Improving perishables;

Finding the correct product mix; and

Moving to a 24-hour schedule.

David Rogers, president, DSR Marketing Systems, Deerfield, Ill., told SN that Wal-Mart has "done a good job on convenience and store design."

He added the company still needs to find the "right balance in food categories" as well as improve "the quality and selection of perishables."

Burt Flickinger, managing director, Reach Marketing, Westport, Conn., told SN that Neighborhood Markets had started out as 18-hour-a-day operations, but "couldn't handle the volume. The move to 24 hours was consumer-dictated."

Expected to open next year, both Memphis-area stores will be open 24 hours, and both will measure 39,910 square feet, a company spokesman said.

Rogers said the format is a few years away from a widespread rollout. "The emphasis for the short term is on rolling out supercenters," he said. "Wal-Mart is too smart an organization to advance on too many fronts at once."

As previously reported, Wal-Mart has said it plans to open 15 to 20 Neighborhood Markets in 2002. While the company declined last week to say where it planned to build those stores, Flickinger said he expected the format to follow the trail blazed by the company's recent distribution center expansions and open in Tennessee, Louisiana, Georgia, Kentucky, Missouri, Kansas and Nebraska, as well as in the three states the format currently operates in.