Wal-Mart Takes Small-Store Concept To Maximum Degree

NEW YORK (Dow Jones)--Wal-Mart Stores Inc. (WMT) is taking its vow to open smaller stores very seriously, planning a location that is 2% the size of its average supercenter, and by far the tiniest Wal-Mart store yet.

The roughly 3,500-square-foot store is being built on the campus of the University of Arkansas and will serve as a pharmacy and general merchandise outlet. It is dwarfed by the 185,000-square-foot size of the average Wal-Mart supercenter.

Wal-Mart's opening of the pharmacy comes at a time the retailer is looking for different ways to downsize from the massive stores that built the company into a $400 billion-a-year business. Stepped-up competition from deep discounters and a desire to enter urban areas, among other reasons, have Wal-Mart thinking about ways to refresh its big-box approach.

Bill Simon, head of Wal-Mart's U.S. operations, said during the fall that Wal-Mart planned to open medium-sized stores as small as 30,000 square feet in the years ahead, and even smaller locations along the lines of convenience-style stores the company operates in markets like Latin America.

The pharmacy, which will also carry other merchandise, is a move in the smaller store direction, but the company is noncommittal about expansion of the concept. "No more stores of this type are planned at this time, but we are always looking to learn," Wal-Mart spokeswoman Melissa Hill said.

The "Walmart on Campus" is replacing a pharmacy the university was operating and is expected to open in mid-January, in time for students' return for the new semester, although the store will also be open to the general public.

Wal-Mart has deep ties to the University of Arkansas, which is about 30 miles from the company's Bentonville, Ark., headquarters. The family of Wal-Mart founder Sam Walton has given hundreds of millions of dollars to the school. The Sam M. Walton College of Business, named for Wal-Mart's founder, is part of the university, and the Bud Walton Arena, named for Sam's brother, is the site of Wal-Mart's annual shareholders' meeting.

But the pharmacy is a business venture, a school spokesman said. The university decided to close it because regulations restricted its ability to offer discounted drugs and offer longer hours, the spokesman said.