Walmart’s efforts to gain share in California’s grocery market continued this week with the opening of another Neighborhood Market in San Jose.
The 41,000-sq.-ft. store is Walmart’s second Neighborhood Market in San Jose and third in the San Francisco area and could be a sign of more to come. Since opening it first Neighborhood Market in California last summer, the format has quickly grown to approximately 20 locations. And there are likely more to come as Walmart looks to accelerated expansion of smaller format stores nationwide in the coming years.
It is much easier to find suitable locations for the smaller stores, especially in California’s densely populate urban areas, which indicates Neighborhood Market is a more suitable growth vehicle. Walmart has faced some of its stiffest opposition in California – although it does currently operate 92 supercenters in California – but some residents are likely to find the smaller units less objectionable even though they are still operated by Walmart.
This is especially true in situations where the alternative to Walmart is a building left vacant by an unsuccessful retailer. The new store in San Jose is located in the Evergreen Village Square shopping center and fills a space previously occupied by Lunardi’s Market.
"Shappell (Properties) built the first few phases of Evergreen Village in 2002 with the vision of having a vibrant merchant square for the community to gather and shop close to home, " said Kelly Erardi, VP of Shapell Properties. "We have been working to bring a grocery store anchor back to Evergreen Village Square, and are pleased that Walmart has stepped up to fill the void."
Even other tenants of the shopping center were also glad to see Walmart fill the void as they will benefit from the traffic generated by a food retailer.
"The square has long sought another grocery store anchor for the vacant space. We are excited for Walmart to join our special community," said Denise Belisle, owner of Evergreen Coffee Company.
Walmart got a similar reaction when it opened its first California Neighborhood Market in Huntington Beach last summer. As was the case with the recently opened store, Walmart took advantage of real estate that another retailer had abandoned. The store in Huntington was located inside a 31,000-sq.-ft. former Rite Aid location that had been vacant for two year. Rite Aid stores tend to be much larger on the West coast as the struggling drug chain had picked up the real estate as during an acquisition.
"The Huntington Beach Neighborhood Market will help re-energize a shopping center deflated by years-long vacancies and bring increased visibility to surrounding businesses. This neighborhood-oriented store will bring added convenience for area residents and beach-going tourists," Huntington Beach mayor Don Hansen said at the time. "With the approximately 65 jobs it is expected to create, the tax revenue it will generate, and the convenient access to fresh groceries it will provide, the Neighborhood Market is a welcome addition to our city."