A Look Inside Walmart’s Urban 90 Supercenter

Walmart recently opened a new small format supercenter prototype in Toronto, Canada in late January. The 90,000 square foot store, commonly known as the Urban 90 format, is dramatically smaller than the traditional 200,000 square foot supercenter and takes only 34 weeks to build, compared to the typical 52 weeks for the typical store. This launch marks another major milestone in Walmart’s push to smaller and more proximity-based stores, after its opening of the Express format last summer. This concept is not unique, as other big box retailers are testing similar small formats, including Target’s “City Target”, set to launch five stores this year (previously highlighted on instoretrends). How has Walmart adapted its big box to this more limited footprint?

Full Assortment, Limited Space

Limited Facings

The Urban 90 format offers all categories that a traditional 200,000 square foot supercenter does, so Walmart has addressed the space restriction issue with some reduced options in the category and limited shelf space dedicated to each SKU. Throughout the store, it is evident that Walmart has significantly reduced the shelf facings that SKUs receive across categories. For example, in the refrigerated orange juice section, some brands and varieties receive only six facings, and this small refrigeration unit holds a total of ten unique SKU’s. For shoppers, this means brands will be harder to find and easier to overlook. Retailers and brands will need to evaluate how to balance product depth vs. product width with such limited space.

Dedication to Fresh

Roughly 30% of store space is dedicated to fresh, indicating that Walmart’s urban format supercenter will compete aggressively in this category. This is in line with Walmart pushing into urban areas – a proximity store is inherently more convenient and can more easily serve higher frequency shopping trips. Walmart has to compete in this space to win the trips that fresh and perishables generate.

Large Focus on Fresh Food

The commitment to fresh provides an interesting insight into some of Walmart’s goals with this new format. Evidenced by their commitment to the full assortment, they are unwilling to sacrifice their role as the one-stop shop. However, they are simultaneously making a push toward capturing the frequency and fill-in trip with the focus on fresh and the urban location.

Seasonal Space

To maximize assortment variety in the smaller box, some departments and spaces have been reduced. For example, action alleys are noticeably smaller as there is not sufficient space for the typical number of pallets. However, the Urban 90 format still sets aside significant space for a seasonal department.

Seasonal Merchandise Assortment

Seasonal events are an important trip occasion. It is a high impulse trip and one that retailers can reliably count on.  Walmart’s focus on fresh while also offering the full assortment highlights the challenge they are facing;  finding the balance between capturing more frequent trips and being the one-stop shop and stock-up retailer. Seasonal helps serve both the frequency and stock-up trip.

What Does it Mean, Strategically?

Walmart’s Urban 90 format aims to bring the one-stop shop of the big box supercenter to a far smaller footprint and more urbanized area and ultimately is a trial to achieve greater space productivity. The limited product facings of these smaller formats present an inventory and labor challenge, and consistent and efficient execution of these issues will be critical to making the smaller store economics work.  Walmart’s attempt to toe the line between one-stop shop and proximity retailer may prove to be the blueprint for other retailers launching small formats and entering urban areas.  Its success or failure will have an impact on other retailers’ interest in the small format concept.

Download a more comprehensive analysis of Walmart’s Urban 90 store features HERE.

Take a virtual tour of this store through the photo gallery on RetailNet Group’s corporate website.

About Doug Koontz

Doug is a Research Analyst at RNG. His global retail focus is Small-Box and Proximity retail, and he's responsible for the forecasting and analysis across this high-growth segment of retail that includes Discounters and Convenience Stores. Doug is responsible for STEIP market analysis of Latin America.

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