Thursday, October 14, 2010

Smaller Stores for Big Cities

Walmart recently announced it will open smaller stories in big urban markets to take the competitive battle to the small-store competitors and grocery retailers in these areas of opportunity. This new strategy is not so different from what UK supermarket giant Tesco is doing by matching store size to neighborhood needs, real-estate realities, and competitive pressures.

This move will also allow Walmart to better tailor its merchandise mix according to highly local buying patterns, an important advantage for building shopper loyalty and increasing frequency of purchase. It could also add another dimension to Walmart's famously efficient distribution strategy by boosting buying from local suppliers for sale in local markets, rather than having to shift merchandise to and from regional distribution centers. In short, Walmart is showing yet again that it's got merchandising savvy. 

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