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Wal-Mart Moves Into La Mesa With Small Grocery Store Strategy

This fall, La Mesa will see the opening of a new grocery store powered by a retail giant better known for ‘everyday low prices’ than selling fresh veggies and packed meat.

If you guessed Walmart, you’ll find that the arrival of the first food-focused Walmart Neighborhood Market in San Diego is seen as a bag of mixed news. La Mesa city leaders and Walmart say the store will stimulate economic growth, such as create 65 new jobs, while offering money-conscious grocery shoppers an alternative to supermarkets.

Analysts, however, predict that the neighborhood markets’ wide assortment of groceries, fresh produce, meats, pharmacy and photo processing will take away market share from nearby grocery stores like Vons, drugstores and other retailers.

Mary England, president and CEO of the La Mesa Chamber of Commerce, said she is thrilled that the vacant 39,000-square-foot space on 8820 Grossmont Blvd. will soon be home to the new neighborhood market.

“The addition of this grocery store fills a large previously vacant space, will add sales tax to the City of La Mesa for non-food products, add jobs to our local economy and will give consumers, who are on a limited budget, price relief,” England said in an email.

 La Mesa Mayor Art Madrid echoed England’s sentiments.

‘Welcome Addition’

“The store will be a welcome addition to our city and will help generate more economic activity for neighboring businesses,” Madrid said in a written statement. He could not be reached for comment.

Rachel Wall, senior manager of community affairs at Walmart, said the community also backs the store. Communities elsewhere, such as in Ventura, have not always welcomed Walmart into their neighborhood.

“The community has been very supportive of the Neighborhood Market in La Mesa and we look forward to creating new jobs and providing a new choice for affordable, healthy groceries,” Wall said in an email.

Meanwhile, Carlos Illingworth, a Vons spokesman, declined to comment on how Walmart’s Neighborhood Market could affect sales at Vons.

Vons operates three stores in La Mesa; 57 stores total in the region.

“We do not comment on competition,” Illingworth said in an email.

He added, “San Diego is a key Southern California market for us.”

Markets Appeal to Shoppers

One analyst and a commercial realtor, who writes about industry trends, predicts that Walmart’s continued expansion of neighborhood markets will appeal to shoppers, especially in today’s tough economy.

According to published reports, Walmart is already the country’s biggest grocer, selling $145 billion of such goods in the U.S. in 2011.

Brian Patton, owner of Capital Realty Advisors in Alpharetta, Ga., has followed the expansion of Walmart neighborhood markets in various U.S. regions for years. He noticed the impact on other stores.

“It hurt sales at other grocery stores nearby,” Patton said. “These markets have a strong appeal from a pricing standpoint and people are becoming more cognizant of shopping for lower grocery prices.”

Walmart operates about 200 neighborhood markets nationwide. It plans to open 80 additional stores by year-end, including one more in San Diego.

Bernard Sosnick covers Walmart as an analyst with Gilford Securities. In his recent analyst report, offering his expectations for an investors’ conference, he predicted that Walmart would announce a “speed-up of rollouts for Neighborhood Markets.”

Bullish on Walmart

The analyst has a “buy rating” on Walmart’s stock. Sosnick remains bullish on Walmart’s growth.

“We expect to hear that Walmart will have advantages over dollar stores, drugstores and grocery stores,” he wrote.

Meanwhile, with preparations for the La Mesa store opening in full swing, store manager and 18-year veteran of Walmart, Todd Raley is too busy to talk to the press or local leaders.

“The store manager is in training and setting up this week,” said Wall when asked about Raley’s availability for an interview.

England said she’s looking forward to meeting with Raley when he has time.

Raley said in a statement that the store will be hiring full-time and part-time associates to work in all areas of the new store, including supervisory positions.

A temporary hiring center located at 8654 La Mesa Blvd. in La Mesa is accepting applications from 8 a.m. to 6 p.m. Monday through Friday and online at www.careers.walmart.com.

This store is only the beginning. Next spring, Wall said, Walmart will open a second grocery store called Sherman Heights Neighborhood Market on 2121 Imperial Ave. in San Diego.

Marion Webb is a freelance writer for the San Diego Business Journal.


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