Is Bigger Better for Walmart’s Neighborhood Markets?

Walmart is testing two Neighborhood Market locations that span 57,000 square feet of selling space, about 17,000 square feet larger than average. The new prototype also adds pickup and delivery space.

First opened in 1998, Neighborhood Markets had 673 locations in the U.S. as of April 30, 2024, and the concept remains Walmart’s smallest concept even at the expanded size. In the U.S., Walmart also has 3,559 Walmart Supercenters averaging 178,000 square feet and 357 Walmart Discount stores at 105,000 square feet on average.

“Since 1998, Walmart customers have looked to the convenience of Neighborhood Markets to get what they need,” said Kyle Kinnard, SVP of Neighborhood Markets at Walmart U.S., in a blog entry. “A smaller size meets a stellar assortment, creating a store that places the community at its very center. And that’s not changing.”

Kinnard said the expanded space at the two stores in Santa Rosa Beach, Florida, and the Vine City neighborhood of Atlanta “will allow us to sharpen our focus on value, speed and convenience.”

Around value, the larger layout will enable Neighborhood Markets to offer broader assortments, with the biggest gains coming in Walmart’s fresh departments, including bakery, produce, meat, and dairy. An expanded service deli will offer additional hot case options.

“We work hard to maintain price leadership,” said Kinnard. “So, whether customers are looking for last-minute necessities for the beach or a meal for the family, they can be confident they’re getting their items at the Every Day Low Price they can count on at Walmart.”

Supporting speed, the updated stores feature wider aisles to ease navigation for in-store shoppers, while the additional pickup and delivery space quickens the purchase path for online shoppers. Kinnard said, “The larger space includes dedicated room for refrigerated goods, so associates can keep orders moving at an even faster pace.”

Finally, the two new stores aim to support convenience by adding a Health Services Room to their pharmacies to provide customers with privacy for vaccinations and consultations as well as a Mother’s Room for nursing moms. The new pickup spots also add convenience.

The initiative follows Walmart’s announcement in January that it will add more than 150 supercenters and Neighborhood Markets in the U.S. over the next five years. Kinnard said Walmart is taking a “thoughtful” approach to remodeling, converting, and building new Neighborhood Market stores.

The larger locations promise to help Neighborhood Markets compete better with conventional grocers that have been reconfigured in recent years to support pickup and delivery. Kroger’s average store size is 66,000 square feet. Publix’s average store size ranges from 45,000 to 50,000 square feet, although it recently began testing an experiential store prototype at around 56,000 square feet featuring additional hot food offerings, upstairs and outdoor seating, and a bar.