Kristina Smith popped into the new Wal-Mart Neighborhood Market in Goose Creek looking to pick up a few items.
“I feel like you can get in and out pretty quickly,” said Smith, who lives on the nearby Naval Weapons Station.
Tammy McCain, also of Goose Creek, called the smaller-format store convenient.
“There aren’t as many people, and it’s not as crowded as the bigger stores,” she said. “They have everything that Wal-Mart Supercenters have in a grocery department.”
Devin Wright, an instructor at the naval nuclear school at the Naval Weapons Station, echoed their remarks.
“People don’t have to wait in line to check out,” Wright, of Summerville, said as he scanned his items at one of the four self-checkout lanes. “I like that.”
Store manager Joey Peters said that’s what Wal-Mart is aiming for with the new smaller-format stores springing up around Charleston, and across the country. By the end of the summer, four will be open in the suburbs: two in Goose Creek, one in Ladson and another in Summerville.
“We are going to promote faster customer service,” he said while standing in front of the 11 checkout lanes at the first Neighborhood Market store to open in the area. The smaller stores average about 37,000 square feet, one-fourth the size of a typical Wal-Mart Supercenter.
Responding to concerns about slow checkout service many customers experience at supercenters, Peters said, “Every person who works here will be trained to run a register. I’m not going to have someone from my church tell me they had to wait in line. That’s what I think is going to make us different.”
The last experience a customer has before he leaves the store is the one he remembers, said Greg Ferrara of the National Grocers Association.
“The checkout process can be tedious,” he said. “If they (Wal-Mart Neighborhood Markets) can address that, it will address one of their frustrations.”
The smaller Wal-Marts don’t carry apparel, electronics, sporting goods or garden supplies.
“We are really a grocery store with a hot deli line and a drive-through pharmacy,” Peters said.
The smaller stores are all about ease and convenience, retail industry experts say.
“Customers were saying they wanted a smaller feel in a store easier to get around,” said Marianne Bickle, department chair of retailing at the University of South Carolina. “Consumers are able to get around faster and easier.”
The introduction of smaller grocers doesn’t mean superstores are going away, she added.
“They are extremely popular,” Bickle said. “It is saying we are going to adapt our big-box stores into smaller footprints and help consumers save on prices and allow them to maximize profit margins. It is the best of both worlds for Wal-Mart.”
In Goose Creek, a new Wal-Mart Neighborhood Market opened earlier this week a couple of miles away from a Wal-Mart Supercenter.
“Consumers need to know that when you put stores very, very close by each other, it’s a good thing,” Bickle said. “Sometimes consumers or local retailers will ask, ‘Why are they doing that?’ It’s to relieve pressure off the other store.”
Peters, the manager of the first Wal-Mart Neighborhood Market, said the supercenter in Goose Creek handles the largest sales volume in the region and the new store is meant to draw off some of those customers.
Wal-Mart is just being business savvy, Bickle said.
“They know consumers will look at the parking lot of a superstore and say, ‘It’s so packed. I don’t know if I want to go in there.’ Now, they can go in and get out fast at the new smaller stores,” she said.
Bickle added that Wal-Mart’s small-format stores are not in response to drugstores or dollar stores carrying more food items, and they are not in competition with convenience stores, which tend to be more expensive.
“Wal-Mart is extremely good at listening and responding rapidly to their consumers,” she said. “Wal-Mart is saying, ‘We are adapting.’ They are the world’s largest retailer and they got there by being smart, by looking at the bottom line and listening to their consumers,” Bickle said.
Because of its size, Wal-Mart has the capital to react quickly to changing market conditions and demand, she said.
Bickle called the new stores “a really wise business plan.”
Britt Beemer, chairman and CEO of Summerville-based America’s Research Group, a retail analytics firm, said Wal-Mart’s smaller stores, which focus on groceries, are a way to tap into something people buy every day without going into a larger store.
“They already have a low-cost image unlike somebody opening up a new grocery store,” Beemer said. “People have a preconceived notion of low prices with Wal-Mart.”
The stores also give Wal-Mart more bargaining power with suppliers. “The bigger they get, they can negotiate better deals with suppliers,” Beemer said.
He also said Wal-Mart took some cues from Walgreens, which started stocking more groceries a few years ago.
“Wal-Mart said if Walgreens can do that, then we can, too,” Beemer said.
He said dollar stores started offering groceries to bring shoppers in more often. The less-expensive product offerings raised an eyebrow at consumer-conscious Wal-Mart, he said.
Another worry for Wal-Mart is Aldi, Beemer said. The supermarket chain, a wholly owned subsidiary of Hofer KG of Austria, requires very few workers and offers low prices.
Two Aldi small supermarkets are in the works for the Charleston area — one in northern Mount Pleasant and another near Summerville on Dorchester Road. The latter will open this summer.
Aldi offers low prices and store-brand products but customers have to take their own bags and deposit quarters in shopping carts to retrieve one. The quarter is returned if the cart is taken back to its port. The grocer doesn’t accept credit cards because processing fees drive up product costs. It also carries just 1,400 products, mostly fast-moving grocery items, where a large supermarket stocks nearly 30,000.
An Aldi official said in an email that the company chose the Charleston market for expansion based on a number of reasons.
“Aldi chooses its site locations based on population density, proximity to competition, cost of the property and traffic patterns to be conveniently based where shoppers are located,” said Krysta Cearly, a division vice president.
“Like with many retailers, you can expect to find a greater concentration of stores where there is a greater concentration of people.
“Rising demand for Aldi is fueling significant expansion as growing numbers of smart shoppers are discovering they can save time and money at Aldi without sacrificing quality,” she said.
She did not address a reason for the growth of smaller-format grocery stores.
Another factor driving smaller grocery stores is location.
“A larger store takes a much larger piece of real estate, and some communities are adverse to that,” said Ferrara of the National Grocers Association. “They are looking for smaller markets and looking to compete there.”
He said drugstores and dollar stores carrying groceries may not be driving growth in the smaller-store market.
“It’s just that a lot more formats are competing for that same dollar,” Ferrara said.
Peters said Wal-Mart’s move to smaller stores while keeping its 10 supercenters in the Charleston area is not in response to Aldi’s proliferation or drugstores’ or dollar stores’ stocking grocery items.
But Beemer said of Aldi, “From a grocery perspective, Aldi is who I would be worried about the most. It’s cheaper than anybody else. They run with four or five employees a day. That’s what’s made them cheaper.”
Nevertheless, he said Wal-Mart knows what it’s doing.
“There’s no question that they are the finest retail machine in the world,” Beemer said.
Reach Warren L. Wise at 937-5524 or twitter.com/warrenlancewise.