It's unlikely Wal-Mart Stores will grow its Neighborhood Markets format through acquisition -- or is it?
Pam Kohn, senior vice president, Neighborhood Markets, said Wal-Mart will continue to look at opportunities that arise. "But we're really focused on convenience and being convenient in a way that makes sense for a particular market, so we really prefer the 'ground-up' concept. However, we do have a couple of stores that were previously used by other retailers."
Observers contacted by SN were divided on the possibility.
"Wal-Mart is so prototype-oriented that I can't see it making acquisitions," said Jeff Green, a retail feasibility consultant based in Mill Valley, Calif.
Jonathan Ziegler, principal in PUPS Investment Management, Santa Barbara, Calif., said it's possible Wal-Mart might seek to acquire individual locations "because handfuls of stores get it property and locations at the right price, and it's one more real-estate strategy Wal-Mart can pursue."
In a similar vein, David Livingston, managing partner at DJL Research Co., Pewaukee, Wis., said Wal-Mart might consider a small acquisition to grow its Neighborhood Market base, "but it would have to be something that falls below a volume of $50 million to keep the Federal Trade Commission from getting involved."
Bob Gorland, vice president, Matthew P. Casey & Associates, Clark, N.J., also thinks it could happen. "It wouldn't surprise me," he said, "because as properties become more scarce, strategies can change.
"Wal-Mart has acquired locations in the past that it converted to other formats, and there's no reason to think that, with all those Winn-Dixies out there, that it wouldn't acquire some properties.
"But Wal-Mart has to be careful about acquisitions," Gorland added, "because it has so many stores with such high market shares in some areas that it could become an FTC concern."
