Wal-Mart to enter local grocery wars

Mid-size market set for Somerville

July 22, 2011|By Kaivan Mangouri, Globe Correspondent

Wal-Mart Stores Inc. is opening its first Market grocery store in the Northeast in Somerville, becoming the latest - and biggest - new competitor to try to shake up the once-staid supermarket scene in New England.

The Arkansas retail giant expects to soon sign a lease for the former Circuit City store on Mystic Avenue at the edge of the Assembly Square shopping district, and company spokesman Steven Restivo said the grocery should be open within a year.

Operating under the name Walmart Market, the grocery will be about 34,000 square feet, similar to a mid-size supermarket. Such smaller stores are part of a marked change in strategy for a company that built its reputation on sprawling big-box sites. Wal-Mart is now concentrating on opening smaller stores to improve its penetration in urban areas - especially New England, which the company has targeted as a major focus for expansion.

Analysts said the Walmart Market should benefit consumers by offering a another low-cost competitor to a region that only recently has seen new chains open stores. German discounter Aldi has recently opened stores in the state and New York chain Wegmans Food Markets Inc. has said it would soon open several of its large supermarkets here, too.

Wal-Mart “will be another thorn in the competition,’’ said Kevin Griffin, the head of Griffin Publishing, which produces industry market analysis. “Grocery retailing is coming around full circle in this area where we went from neighborhood markets to larger grocery stores to superstores to big-box retailers and, ultimately, the Wal-Mart footprint.’’

While it may be too early to know Walmart Market’s impact on other grocers, Griffin noted that any additional competition would be good for shoppers.

“I think the consumer can expect to see the typical grocery store get a reduction in size, and a little better product mix on the interior,’’ Griffin said.

One explanation for the recent surge of interest from outside competitors is that Massachusetts appears to have fewer supermarkets than other states. A study released earlier this year by the Massachusetts Public Health Association found the Bay State ranked near the bottom of states in having enough supermarkets with fresh nutritious food. The study said the shortage was particularly acute in dense urban areas, where land is scarce and big, suburban-style supermarkets have a harder time fitting in.

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