Walmart Goes to College

In What Appears to Be Format Test, Retailer Opens Small Store at University of Arkansas

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BATAVIA, Ohio ( -- The biggest retailer on Earth is preparing to try its hand at being big man on campus, readying a "Walmart on Campus" store at the University of Arkansas in what appears part of a series of tests of smaller-format stores for the giant retailer.

The 10,000-square-foot space under development replaces a university-run pharmacy that's set to close Dec. 20. Walmart on Campus is expected to open by next month when classes resume at the university, though it will also be open for nonstudents. In a release, the university said patients have the option of moving their prescriptions to the Walmart on Campus pharmacy or another store.

Walmart U.S. CEO Bill Simon has talked of plans by the retailer to try a wide variety of "small-store" formats that will allow it to expand to places its supercenters -- often around 200,000 square feet in the past or even around the 180,000 square feet in the current configuration -- won't fit or can't get zoning.

Local restrictions, backed by unions and other opponents of Walmart expansion, have kept the giant retailer out of many urban areas on the East and West Coasts. But Walmart is again eying the New York market (a chorus sang "New York, New York" during its October analyst meeting). Drug or convenience stores of around 10,000 square feet could easily allow the retailer to enter urban markets, and if the format proved successful, the retailer could look to acquire a drug chain such as Rite Aid.

During a presentation at the October investor conference, Mr. Simon said the retailer will open 30 to 40 small and medium-format stores of varying sizes by next year. The medium stores are in the 30,000- to 60,000-square-foot range, he said, including the retailer's existing Neighborhood Market format.

Of the smallest stores, he said, "You won't see a material amount of capital spent here, but we will be building these stores to learn from them." He said Walmart will draw from its own experience, and that of competitors with small stores in overseas markets. "There are hundreds and hundreds if not thousands of opportunities in the U.S. for small formats," Mr. Simon said, adding that the pharmacy business, which has been driven by the $4 generic prescription program he led four years ago for Walmart, has helped make supermarket-sized Neighborhood Markets more profitable.

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