- Associated Press - Wednesday, December 10, 2014

EDGEWOOD, Texas (AP) - Wal-Mart is rediscovering small-town Texas. This time it’s focusing on even smaller towns than it did in the 1970s and 1980s.

Wal-Mart will open 37 stores in the state through the end of January.

And it’s doing so with its smaller Wal-Mart Neighborhood Markets in two sizes: a 40,000-square-foot traditional grocery store and its newer 12,000-square-foot store, which sells an abbreviated selection of fresh produce, meats and groceries and has a pharmacy and fuel pumps.

The chain’s fourth-quarter blitz includes one of the smaller Neighborhood Markets in the East Texas town of Edgewood, population 1,325. It’s right across U.S. Highway 80 from Paw Paw’s Fireworks.

“We’re the biggest thing to happen in Edgewood since the second stoplight came to town in 2002,” said Terry Mullican, manager of the Edgewood Neighborhood Market.

The closest Wal-Mart Supercenter is 13 miles away in Canton, Mullican said, and his store will have the same prices and be more convenient. It will stock 18,940 items; a Supercenter carries 100,000.

Mullican came up through the ranks at Wal-Mart, starting out as an hourly employee 16 years ago. He already lived in Edgewood, about 55 miles east of Dallas, and had commuted to Dallas to work.

The Edgewood store has 36 employees, and about half of them had been jobless for a while, Mullican told The Dallas Morning News (https://bit.ly/1yyVjjZ ).

The store feels like just like a Wal-Mart only scaled down, with three checkouts instead of more than 25 and two self-checkouts instead of a dozen.

The cold & flu section has the same selection a Supercenter does, but it’s displayed in 12 feet of aisle space vs. 20 feet. “We have every category represented, and if something doesn’t sell and people want other products and we have it in the warehouse, we’ll change it,” he said.

It also carries some general merchandise, items such as printer cartridges and greeting cards and wrapping paper.

Wal-Mart developed this small concept in a test in North Carolina and originally called the stores Wal-Mart Express, spokeswoman Anne Hatfield said. The Texas expansion accounts for 20 percent of the 170 Neighborhood Markets Wal-Mart is opening in the fourth quarter.

Wal-Mart U.S. President Greg Foran said last month during the company’s third-quarter conference call that Neighborhood Market stores posted a 5.5 percent same-store sales increase, stronger than the company’s overall increase of 0.5 percent. It was the first quarterly sales increase for Wal-Mart’s U.S. stores in seven quarters.

Wal-Mart said last summer that it’s shifting its focus to smaller stores. The Neighborhood Market is about the size of a Walgreens but larger than a Dollar General, which is about 7,300 square feet.

Texas is Dollar General’s largest state. It operates 1,238 stores here, mostly in small rural towns like the ones Wal-Mart is targeting for its 12,000-square-foot stores.

Dollar General, the largest U.S. dollar chain, has been aggressively expanding its food selection, but it doesn’t carry fresh meats and produce in Texas and has no plans to do so, Dollar General spokesman Dan MacDonald said.

“Texas has been a great state for us,” MacDonald said. “We have a really strong relationship with our consumers in Texas. Our stores do really well there.”

The chain’s low-cost economic model allows it to serve areas with fewer than 1,500 households, MacDonald said. “About 70 percent of our stores are in communities of less than 20,000 people.”

Dollar General has operated a store in Edgewood for 10 years.

Visiting a town like Edgewood, it’s hard to understand how Wal-Mart could make a lot of money there, especially since it has several Wal-Marts that are 10 to 20 miles away.

The town has three other places to buy gas, a local produce stand and a Brookshire Brothers grocery store.

Asked about the impact of Wal-Mart moving into Edgewood, Carol Martin of nearby Fruitvale said: “I’m glad to have it here. I would hate if it puts any mom-and-pops out of business, but it’s not like we have many here.”

She had stopped by Dollar General for a gallon of milk and some stocking stuffers for her grandchildren.

Texas was one of the first states Sam Walton moved into as he started to build the world’s largest retail company. Wal-Mart operates more than 500 stores here.

“Wal-Mart has been committed to Texas for nearly 40 years,” said Randy Green, Wal-Mart’s vice president over small formats in the Southwest. “The Texas economy is very strong, and we continue to see the population grow here as a result, creating a need for affordable grocery and household merchandise.”

About half of the new Neighborhood Market stores in Texas are in cities such as Amarillo, Mission and San Antonio. Others are in suburbs, including Sachse, Wylie, DeSoto and Lancaster.

The 12,000-square-foot stores are in rural markets including Leonard, Hughes Springs, Anson, Whitewright and Merkel.


Information from: The Dallas Morning News, https://www.dallasnews.com

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