Wal-Mart, Target Aiming to Expand into Urban Markets (WMT) (TGT)
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Wal-Mart (NYSE: WMT) and Target (NYSE: TGT) are taking a different route when it comes to opening new stores in cities.
The two companies have begun opening smaller storefronts in dense urban areas where its larger stores have seen trouble.
Last week Wal-Mart opened its first Wal-Mart Express Store, which is roughly 15,000 square feet -- drastically smaller than its average store of 185,000 square feet. The rate at which Wal-Mart plans to open the new Express stores is slow: about 15 new Express stores this year in Arkansas, North Carolina and the Chicago area.
Target, meanwhile, has set plans to open four CityTarget centers between 2012 and 2013. The new stores will be opened in Chicago, Seattle, Los Angeles, and San Francisco. CityTarget will be between 60,000 and 100,000 square feet, versus an average store size of about 135,000 square feet.
The new smaller and more urban stores will help the companies compete with dollar stores and smaller pharmacy chains. Becoming more convenient for customers may also bring more customers from small mom and pop stores.
Although the new stores seem to be a large positive for the companies, many investors are waiting to see how management handles the change. Many factors come into play when transferring between large stores with almost unlimited storage space.
A spokesman for Wal-Mart confirmed the new Express stores will still hold a wide variety of products ranging from food, apparel, automotive, and house ware.
Elsewhere across the retail space, Best Buy (NYSE: BBY) and Staples (Nasdaq: SPLS) have both recently announced they too are trying new store models in an attempt to gain market share. Best Buy will try a new "stand alone" approach where as Staples will downsize its new stores.
The two companies have begun opening smaller storefronts in dense urban areas where its larger stores have seen trouble.
Last week Wal-Mart opened its first Wal-Mart Express Store, which is roughly 15,000 square feet -- drastically smaller than its average store of 185,000 square feet. The rate at which Wal-Mart plans to open the new Express stores is slow: about 15 new Express stores this year in Arkansas, North Carolina and the Chicago area.
Target, meanwhile, has set plans to open four CityTarget centers between 2012 and 2013. The new stores will be opened in Chicago, Seattle, Los Angeles, and San Francisco. CityTarget will be between 60,000 and 100,000 square feet, versus an average store size of about 135,000 square feet.
The new smaller and more urban stores will help the companies compete with dollar stores and smaller pharmacy chains. Becoming more convenient for customers may also bring more customers from small mom and pop stores.
Although the new stores seem to be a large positive for the companies, many investors are waiting to see how management handles the change. Many factors come into play when transferring between large stores with almost unlimited storage space.
A spokesman for Wal-Mart confirmed the new Express stores will still hold a wide variety of products ranging from food, apparel, automotive, and house ware.
Elsewhere across the retail space, Best Buy (NYSE: BBY) and Staples (Nasdaq: SPLS) have both recently announced they too are trying new store models in an attempt to gain market share. Best Buy will try a new "stand alone" approach where as Staples will downsize its new stores.
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