WAL-MART GOES URBAN: PROTOTYPE SUPERCENTER TO OPEN IN DALLAS
Byline: Rusty Williamson
DALLAS — Welcome to the new downtown: Chanel, Prada, Ralph Lauren — and Wal-Mart.
The $218 billion discounter is expanding its reach to the inner city and moving into Target territory. The chain said Friday that it plans to open a revolutionary new Supercenter concept store near densely populated downtown Dallas with a look and feel unlike any other Wal-Mart.
The new store will be among Wal-Mart’s most densely populated locations in the world, rivaling one in Brazil, according to a spokeswoman.
The new design signals a first step toward moving into other heavily populated cities and regions, like the New York area, where it currently only has stores in distant suburbs.
The Bentonville, Ark.-based chain has long coveted a piece of the highly lucrative urban mass and discount business now dominated by Target and bankrupt Kmart and has a few urban locales, including in the Los Angeles and Baltimore areas. But the world’s biggest company has yet to crack those small pieces of inner-city land with its Wal-Mart Supercenter merchandising layout and product assortment. That dilemma seems to have been solved with the two-story concept store in Dallas that will occupy 11 acres of land, as opposed to Wal-Mart’s typical 20-plus acre layouts in small-town America. The new design allows Wal-Mart to use half the amount of land usually required for its Supercenters. Parking will be under the store.
The company expects to get final zoning approval in August, and groundbreaking will begin after that. The store should open in mid-to-late 2003.
The Dallas store, which could do between $40 million and $60 million in annual sales, will be about 200,000 square feet in size, which is just slightly smaller than the biggest Supercenters, which weigh in at 204,000 square feet, and larger than many stores in the format that are around 170,000 square feet. Wal-Mart discount stores, which don’t have the grocery component, are generally around 110,000 to 120,000 square feet.
The Dallas Supercenter will be located near Love Field airport on Mockingbird Lane on a site now partially occupied by a Syms off-price store that ironically will relocate to a Wal-Mart site in the Dallas suburb of Plano.
“We’ve never built a store like this before,” said a Wal-Mart spokeswoman. “This is an incredibly unique design. We are eager to be more convenient for our customers in this area who may travel some distance to our stores in the suburbs. This proposal allows us to be close to our customers and build a store that fits in an urban area.”
There are two other Wal-Mart Supercenters within about 10 miles of the new site.
“This is a hugely important development for Wal-Mart and its future growth. It’s a radical move into the urban retail environment. Target will be watching this very closely,” said Walter Loeb of Loeb Associates in New York. “It could easily have yearly sales of $40 million to $60 million, which is a little higher than the average Supercenter. This is a new concept and will attract upscale urban customers who now won’t have to travel several miles to the suburbs to shop Wal-Mart.”
The radical new Supercenter format will feature an urban design scheme and construction innovations that are revolutionary for Wal-Mart. For example, the new format will feature a ground-level parking garage that sits directly beneath the elevated store. Escalators will be big enough to accommodate shopping carts. The store will front right on the street to be accessible via sidewalk, a far cry from Wal-Mart’s standard big box that’s much like a discount island surrounded by a sea of concrete or asphalt and acres of parking spaces.
Wal-Mart said it made a concerted effort to add lots of visually appealing design elements to the store so that it will blend seamlessly into the neighborhood, such as a Spanish tile roof, arched facade, decorative windows, festive awnings and colorful gardens. The Love Field locale is a demographic melting pot and is surrounded by a disparate range of neighborhoods, including wealthy Highland Park, young, fashionable and heavily gay Oak Lawn and Hispanic pockets throughout.
The prototype was designed by Middough Associates Inc. of Cleveland. Due to the complexity of the design, construction is expected to take longer than the usual 10 months required for a standard Supercenter.
“Our design reflects elements of a traditional retail center similar to the appearance of the venerable Highland Park Village. Yet it also allows our customers the convenience of one-stop shopping and a full grocery section,” added the spokeswoman
Highland Park Village is an open-air Mediterranean-style strip center with mostly designer stores such as Calvin Klein, Chanel, Prada and Ralph Lauren. It is located on the corner of Mockingbird Lane and Preston Road, not far from the new Wal-Mart site.
“In designing the urban Supercenters, we’re looking at the uniqueness of each neighborhood and how best to customize the store to fit into the setting. We have plans to open several other urban Supercenters, including in New Orleans, where we’re going into a former public housing project. We’re working with the city to preserve many of the old architectural and design elements of the area, including an old cotton mill.”
The new Dallas store will employ 500 people with an annual payroll of $6.5 million, and Wal-Mart estimates that it will contribute at least $5 million in total revenues for state, local and the Dallas Area Rapid Transit, or DART, that will be generated by sales taxes. The company said it will pay more than $400,000 in property taxes each year.
The move closer to cities and their sophisticated clientele means that Wal-Mart’s apparel assortments will have to improve. Right now, the retailer lags behind Target and Kohl’s in the clothing arena in terms of style and quality — even though by virtue of its size, Wal-Mart’s apparel business, estimated to be at least $25 billion, is already the largest in the world. As reported, over the last five years, Wal-Mart has been trying to upgrade, adding quality controls, recruiting talent to build up a fashion office, introducing trendier casual styles and, in a show of pride and even laying new carpeting down at many locations.
Wal-Mart is determined to increase apparel sales productivity per square foot, bring in better brands, enhance visual displays and — perhaps its tallest order — change consumer perceptions about its lack of trendiness.