NEIGHBORHOOD MARKETS COMING SOON TO HOUSTON

MARTIN SCHNEIDER

BENTONVILLE, Ark. -- Wal-Mart Stores here said it will introduce its Neighborhood Market conventional supermarket format in Houston, opening five stores in the next two years.

Construction on the first unit, scheduled to open this summer, began in early January.

Wal-Mart has been rolling out on a limited basis over the past few years the 40,000- to 55,000-square-foot experimental format. Currently, there are 19 units in operation.

Nationally, Wal-Mart has said it plans to open about 15 to 20 Neighborhood Market units this year, said Wal-Mart spokesman Rob Phillips.

Opening several Houston units makes sense for the company from a distribution and pricing standpoint, according to Phillips.

"We are looking to tie in the distribution to the Neighborhood Markets with our supercenter distribution. That way we can keep our costs down and ultimately keep prices low for our customers," Phillips told SN.

Other markets where Wal-Mart has opened these formats include Oklahoma City and Dallas, which with the addition of Houston will create a small distribution matrix for the new store concept, connecting these stores to the initial Neighborhood Markets opened in northwestern Arkansas.

"We have been trying different things with these stores, but the format is mostly set," Phillips told SN.

"We have been pleased with the Neighborhood Markets' performance so far, though we are still in the experimental phase, and are always looking for ways to improve the format," Phillips added.

The company said it does not plan on stopping with just five Houston locations. Wal-Mart has said it will eventually open 10 to 15 Neighborhood Markets in the area.

Phillips said that in general the Neighborhood Markets will open in areas with existing supercenters, but said the company is not discounting other options.

"If we can operate in areas where we do not have supercenters and remain competitive, we are certainly not limited to operating Neighborhood Markets in areas with supercenters," Phillips said.