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2004-07-06
Bentonville, AR. Wal-Mart to Build Hundreds of "Urban 99" Superstores

It seemed like a corporate joke when Wal-Mart responded to a Tampa, Florida size limit on retail stores by building a store just under the cap. When Tampa set the cap at 100,000 s.f., Wal-Mart came in with a 99,000 s.f. supercenter. How cute! Now, according to the Northwest Arkansas Business Journal, a report from Merrill Lynch Global Securities says Wal-Mart wants to build 850 of these smaller Supercenters, known as the "Urban 99" prototype, over the next ten years. Hey, it beats the 200,000 s.f. variety, and would represent a victory for citizen's groups that have been fighting the supersize me stores. Wal-Mart "baby" superstores are still almost twice the size of a football field, and were designed to fit onto 10 acres of land -- at least one-third smaller than the land needed for the larger supercenters. Wal-Mart also builds the 40,000 s.f. Neighborhood Markets -- but very few of these are being rolled out this year. Merrill Lynch claims that 90% of Wal-Mart’s 200 new Supercenters that will be built in the year 2013 will be some variation of the Urban 99 format. But why wait? Wal-Mart believes it can build 1,000 to 1,500 more full-sized Supercenters in the United States -- which is twice as many as it has now. Given the fact that some of these supercenters will be 3 miles apart, the saturation of superstores is a likely bet. Wal-Mart’s Urban 99 store in Tampa could reach sales of more than $70 million in its first year, Merrill Lynch said. If so, that would mean the sales per square foot at a 99 prototype would be significantly higher than the larger supercenters. A 200,000 s.f. Wal-Mart might have sales of $90 million, or $450 per square foot. This figure cited by Merrill Lynch translates in $707 per square foot, signficantly higher than the larger stores.

What you can do: If Wal-Mart can produce 99,000 s.f. stores in response to a city size limit, the obvious message to small town America is: put on a size cap and put it on immediately. If Wal-Mart is going to do the limbo (How low can you go?) to come in under the radar, communities should be busy lowering the cap size to 60,000 s.f. or lower. For years, Wal-Mart told local officials they could not build a smaller supercenter prototype. Now they are rumored to be planning hundreds of Urban 99s. Well, let's go for Urban 66s. Smaller is better for most communities, and Wal-Mart has opened the door to smaller. Local officials just have to have the guts to walk through. For more background on size caps, search this database by "caps".










 
 
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