GENTRY, Ark. _ Wal-Mart Stores Inc. is thinking small as it takes its fight against the growing threat of dollar stores to its own backyard.
In rural Arkansas, the first drugstore-sized Walmart Express store offers a peek at how the world's largest retailer plans to expand in big cities and tiny towns.
The world's largest retailer unveiled to the press Thursday the first of the stores, about a half-mile away from rival Dollar General in rural Gentry.
The store look like a tinier version of Wal-Mart's usual sprawling self.
The long, narrow concrete box, which features a powder-blue Walmart Express sign, is less than one-tenth of the size of a super center. The store, which has exposed pipes and yellow walls, carries most of the basics that its bigger cousin carries, from bacon and milk to socks and DVDs.
That's ideal for customers who are in a fix _ they've run out of milk or their toaster just broke, or they're just bored and need to pick up a DVD. But the selection is less _ 11,000 to 13,000 items, a tenth of what a superstore carries.
The Gentry store, nestled among cow pastures and rolling hills, will open June 8, along with another Walmart Express test store about 30 miles away in Prairie Grove, Ark. Another is planned to open in Ridgefield, N.C., a week later.
Walmart Express is intended to be a two-pronged strategy: stores in small towns that aren't big enough to support a full-sized Walmart, and stores in big cities where building a whole supercenter is impractical.
Wal-Mart is experimenting with a Walmart Express prototype for urban markets in Chicago, to open later this summer.
It plans to build 15 to 20 Walmart Express stores, focusing on Arkansas, North Carolina and Chicago, by the end of its fiscal year in January 2012.
"This is about access to breadth of assortment" and everyday low prices, said Anthony Hucker, vice president of strategy and business development, which is spearheading the new format.
If the retailer gets the prototypes right for both urban and rural areas, it sees the potential to build about 350 per year, the same pace as the height of its super center expansion in 2005 and 2006.
Walmart's U.S. business has been chipped away by dollar stores, which have adroitly maneuvered the post-recession economy.
Dollar stores, with their small size and convenient locations ideal for quick shopping, have added brand-name products and become more competitive on price. They're also expanding quickly, opening stores closer to customers' homes, an advantage in era of high gas prices.
Already, the average round trip to a dollar store is six miles, compared with 30 miles for a typical Wal-Mart trip, Credit Suisse analyst Michael Exstein estimates.
Analysts will be carefully monitoring how the fight unfolds in Gentry, whose population is a little over 3,000 and about a 16-mile round trip to the nearest Wal-Mart supercenter in Siloam Springs, Ark.
Hucker emphasized Thursday that it's still testing the format.
Most Walmart Express locations will have a pharmacy. Some, like the store in Prairie Grove, will even sell gasoline. All stores will have check cashing and take food stamps, which was advertised on the exterior of the Gentry store.
Inside the store, a wall of coolers featured refrigerated foods and frozen items, including ready-to-go meals like $4.98 Hormel's Roast Beef. The store highlights that its fresh produce comes from local producers.
For ease of shopping, some related general merchandise was featured alongside groceries. For example, tea kettles and toasters were in the bread and tea and coffee aisle. Shoppers can even find prepaid phones and greeting cards.
Walmart Express is looking to customers to tell it what the small stores should carry. Signs throughout the store feature "If you want it, we'll get it." So customers can order an item on its Web site and have it delivered to the store through its "Site to Store" service.
It also has a small suggestion box in the front where customers can voice their opinions on what should be carried by filling out a form.
"We have to look through the consumers' eyes," Hucker said.