Walmart is Reimaging its Retail Footprint as Town Centers
Walmart’s ‘Reimagined Centers’ aim to serve all commercial, recreational, cultural and institutional functions like traditional town centers.
Walmart recently announced plans to repurpose 12 of its retail locations into “Town Centers.” These open outdoor plazas will serve as gathering areas with seating, food, fountains, playgrounds, green space, jogging paths and space for live music and community events. According to Walmart’s website, some Town Centers will even feature mobility hubs where people can access public transportation, rent bicycles or hail rideshare.
Walmart's experimental hard pivot towards this more traditional built-environment format represents a near total departure from the big box, edge-of-town model the company used to scale to retail supremacy. For years, Walmart’s critics have accused the retailing giant of hollowing out and destroying the downtowns of small communities across America.
Now Walmart is eyeing their replacement, or, at least, functionally replicating them
"We want to provide community space, areas for the community to dwell — a farmer's market, an Easter egg hunt, trick or treating," L.B. Johnson, vice president of U.S. Realty Operations for Walmart, told the Atlanta Business Chronicle. “We want to provide pedestrian connectivity from our box to the experiential zones that are planned on our footprint. We want to augment these experiences and activities with more food and beverage, with health and fitness, essential services and entertainment.”
As the keynote speaker at the 2018 International Council of Shopping Centers (ICSC) Southeast Conference & Deal Making this fall, Johnson said:
The company plans to break ground next spring on a “Town Center” project, transforming a Supercenter in Loveland, Colorado, where Walmart owns 12 acres of vacant land next to the store and 6 to 8 acres of parking lot.
“A transformation is underway,” Johnson continued in his ICSC remarks.
It’s not the first new format Walmart has experimented with in recent years, as the old normal has given way to a return to more traditional, hands-free and pedestrian-centered forms. Walmart opened its first smaller footprint “Neighborhood Market” store in 1998, but didn’t take it too seriously until roughly a decade later when Whole Foods and Trader Joe’s began showing tremendous success growing their grocery businesses. Walmart responded by renewing its Neighborhood Markets initiative, which aimed to tuck more these stores at 1/5th the normal size into smaller footprints in communities across America.
Around the same time, in 2011, the company also experimented with “Walmart Express,” which was another smaller format offering a range of services beyond grocery, including check cashing and gasoline. Walmart hoped the concept would take root in small towns deemed unable to support a larger store, and larger cities where real estate cost a premium.
But all 102 Walmart Express locations were closed in January 2016.
This year, along with its new “Town Centers,” Walmart will again test a similar express format. It’s new 3,000-sq.ft. convenience stores—known as Walmart Fuel Station—will include gas pumps and be built into some parking lots of existing 180,000-sq.-ft. Walmart Supercenters that do not already offer fuel service.
By shifting to these new experiential, “Town Center” formats and pivoting again towards physical convenience, Walmart hopes to do more than chase the latest retail fad. Rather, Walmart’s new strategic experiment aims to build up a physical moat to defend itself against ever-encroaching competition online. By offering value that consumers simply cannot get online, Walmart believes these new retail recipes will lock in new, younger generations of consumers who grow in purchasing power and importance by the day.
And it’s not alone. Target is also building smaller, streamlined urban-format stores as it adapts its own brick-and-mortar strategies to survive the new normal and reach younger consumers that may live far from traditional, suburban locations. By the end of 2019, Target will operate more than 130 small-format locations nationally.
It may be too late for Walmart’s many critics, who’ve accuse the company for decades that is was destroying communities, particularly rural communities, and contributed to the great American hollowing out by making the process of deindustrialization even more painful.
But should this new strategy find its footing, it could lead Walmart to reimaging many more of its 5,000+ stores toward higher form and function. It may not replace what some communities have lost, but it’s a start towards reintroducing vital functionality to places that desperately need higher quality places.