Walmart, Target 'Small Box' Stores to Compete with Small Businesses

Big box retailers are opening smaller stores to reach rural and urban markets, posing direct competition to local businesses.

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Big box retailers like Walmart and Target are using smaller Walmart Express and CityTarget stores to reach rural and urban markets.Make way for the big guys: Big box stores like Walmart have begun opening smaller outposts across the country, raising concerns that they'll pose a competitive threat to small local businesses.

The first Walmart Express stores opened in Arkansas earlier this month, with plans to slowly introduce a total of 15 stores throughout Arkansas, North Carolina and the Chicago area this year.

This move toward "small box" stores is the result of an effort to reach customers in the most rural and urban environments, where Walmart's typical 185,000-square-foot mega-centers are too far or too big. The Express stores will average about 15,000 square feet and carry a general stock of foods, produce, personal care and home items.

This approach may also earn Walmart coveted urban space in cities like New York, where mega-store proposals have been been met with radical opposition by locals.

Meanwhile, Target has unveiled a plan to open four CityTargets, which will hit major cities like Chicago, Seattle, Los Angeles and San Francisco in 2012. Target is focusing on more urban spaces, where their scaled-down stores can fit into existing city buildings without disrupting neighborhoods.

With this big push into smaller markets, the stores will challenge local businesses and mom-and-pop stores, including bargain chains like Dollar General, which have benefited greatly from the lagging economy. "In many of our rural communities, we do have competitors that are dollar stores," Walmart spokeswoman Tara Raddohl said. Some Express stores may also contain pharmacies, which will further challenge private stores and popular pharmacy chains.

Other big retailers are also thinking small: Best Buy claims its smaller Best Buy Mobile stores have helped boost business, while Staples recently announced to investors that it's considering making new stores smaller.

Tags: CityTarget, News, Target, Walmart Express

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