WAL-MART TESTS PREPARED FOOD LINE

ROSEANNE HARPER

BENTONVILLE, Ark. -- Wal-Mart Stores is testing a new concept in prepared foods at one of its traditional units in Rogers, Ark., just a few miles from its headquarters here.

The company has designated a "Meals on the Go" section at the front of the store dedicated solely to prepackaged, chilled prepared foods, a limited selection of fresh produce and a handful of commodity items such as milk and fruit juice.

The concept, offering such a wide variety of chilled, prepared foods, represents a departure from anything Wal-Mart has tried so far in the fresh foods arena. And it's unlike anything that's being tried by other retail giants such as Minneapolis-based Target Stores or Troy, Mich.-based Kmart, industry sources told SN.

The 1,200-square-foot section, designed to look like a store within a store, features a line of prepared foods dubbed The Chef. Supplied by 20 different manufacturers -- some of them major industry players -- the line includes more than 200 items. Some of the products are sourced fresh, but others arrive frozen and are slacked out to be sold refrigerated, a local source said. Some of the manufacturers are supplying the items with a custom Wal-Mart label, he added.

The items are packaged in cook-in trays with dome tops. Single-serving sizes range in price from $2 to $4.50, and all are sold self-service, from upright refrigerated cases.

It's significant that this concept is being tested in a traditional Wal-Mart, not a Wal-Mart Supercenter, said Howard Solganik, president of Solganik & Associates, a Dayton, Ohio-based food consulting firm.

"This could be a way to get an edge without making the investment necessary to go into the supermarket business. They can offer the customer the convenience of buying a fresh meal and yet not get into a huge inventory. This is consolidated," he said.

"This is certainly a departure for Wal-Mart. Until now, they've been less aggressive than Kmart or Target with fresh food," said Neil Stern, a partner in McMillan-Doolittle, a Chicago-based retail consulting firm.

"The big challenge with this type of concept is getting the customer to realize the product is fresh. Everybody finds that a problem," he added.

To help present the fresh message in Wal-Mart's test site, one item -- rotisserie chicken -- is being cooked on-site and sold hot. Ironically, it's the hot chickens that are best-sellers.

"We've been surprised that they're selling so well," said Rich Donckers, a consultant to Wal-Mart. He's president of Retail Strategies International, a firm also based here.

Donckers declined to say how many chickens are sold a day. Weighing 3.5 pounds before they're cooked, the chickens are priced at $4.44 each. Signs have recently been introduced to draw attention to chilled side dishes to go with them. Chilled pizzas and green salads are also top sellers. Total sales are about evenly divided between two peaks of traffic -- lunchtime and early evening -- and the stars of the evening are the chickens, Donckers said.

He declined, however, to comment further on sales at the Meals on the Go section. It has not yet been decided whether the concept will be rolled out to other Wal-Mart units, or whether it's best suited for traditional units or Wal-Mart Supercenters, he said.

"It's an experiment, basically designed to capitalize on the Wal-Mart traffic, but it also may be giving us an edge over the competition at this particular location. We're studying that right now," Donckers added. A traditional Kmart is situated just across the road.

He said he knows of no other mass-merchandiser that's offering such a wide selection of prepared, chilled foods. Kmart, in its Super Kmart Centers, has focused more on hot foods in a food court setting. While self-service cases in Super Kmarts offer chilled foods, the selection is limited mostly to salads rather than center-of-the-plate items, said McMillan-Doolittle's Stern.

Target Stores, another huge retailer, has more recently entered the fresh food business with a new SuperTarget format in a store in Omaha, Neb. But again, the emphasis is not on chilled, prepared foods. Fried chicken, hot wings and ribs and sausages are served up hot there and that's where the action is.