John Seelmeyer

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February 21, 2011
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Walmart may build smaller stores in area

Walmart appears to be looking once again for Reno-area locations to develop Walmart Neighborhood Market stores, which are similar to traditional grocery stores.

The company apparently is looking to develop four or five of the Neighborhood Market stores in the Reno area, said Roxanne Stevenson, a veteran broker of retail space at Colliers International.

Walmart, which keeps its real estate plans close to the vest, isn't saying anything.

But Douglas Baker, whose Scottsdale-based B.D. Baker Co. handles Walmart site acquisitions in Nevada and Arizona, said the company has opened 11 Neighborhood Market locations in Las Vegas.

"With five Supercenters open in the Reno area and one under construction in Stead it is only logical in time that we backfill with the Neighborhood Market format," Baker said.

Walmart's Neighborhood Market stores run about 42,000 square feet. That's about the size of a typical grocery store in a neighborhood center, as the median size of a grocery store in the United States is 46,000 square feet, says the Food Marketing Institute.

Stevenson said the company locates the stores to fill holes in the market that aren't served by its SuperCenters.

Along with grocery offerings, Walmart Neighborhood Markets include a drive-through pharmacy. Prices are similar to those in Walmart's SuperCenter locations.

Each of the Neighborhood Markets employs about 95.

Since the concept was launched by Walmart in 1998, the company has opened 182 Neighborhood Market locations.

In fact, Walmart was looking closely at Reno locations for the Neighborhood Market concept as long ago as 2005, when the stores were rumored to be open by 2007.

But those plans were put on the back burner as the company rethought its real estate strategy and worked its way through the worst days of the recession.

Stevenson says Walmart's plans are just one of several factors that are roiling the waters for grocery retailers.

"Retailers better known for selling clothes or prescriptions, such as Target, Walgreen's and CVS, are expanding into the grocery business in a big way," she says. Traditional retailers are squeezed, too, by wholesale clubs such as Costco.

One sign of the change: Raley's is preparing to convert its store at Reno Town Mall to its discount Food Source brand after 37 years of operation under the Raley's name.

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Northern Nevada Business Weekly Updated Feb 21, 2011 12:00AM Published Feb 21, 2011 12:00AM Copyright 2011 Northern Nevada Business Weekly. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.