Walmart's Marketside Disappears from the Web but May Rise from Phoenix

Last Updated Nov 30, 2010 7:02 PM EST

Walmart's Marketplace stores are no longer part of the Marketside website.

Replacing them is a pitch about a food brand of the same name Walmart (WMT) apparently is launching. Or maybe not. It's all a bit confusing.
Questioned about the disappearance of Marketside stores from the website dedicated to them, rumor of which began to circulate a week ago, the normally well-versed communications apparatus at the world's largest retailer shrugged, and the silence seems ominous for the four-store convenience grocery format the company has tested in metropolitan Phoenix.

To start from the beginning, Walmart launched Marketside almost exactly two years ago. The stores were developed as small scale grocery operations, with basic but limited assortments of meat, produce, frozen foods, grocery, health and beauty aids and consumable products such as paper towels in 15,000 square feet of space. But they also offered a large selection of convenience meals, displayed in extensive refrigerated cases, and beverages, with some special consideration for adult beverages. In other words, Marketside was developed as a grab and go store of the sort that Tesco (TSCO) operates in Britain. Only, Tesco brought a modified version of the format to the United States when it launched Fresh & Easy in the southwestern United States in 2007. Walmart, which had been working with a wide range of different store types through a Latin American subsidiary that increasingly provides senior executives for its headquarters in Bentonville, Ark., couldn't let that challenge go at least untested, and, so it opened the four Marketside stores.

Recently, the retailer rebranded Marketside, adding by Walmart and changing the logo. Walmart said it was all in step with the course of development it had established for Marketside, however observers speculated that the stores might not be getting their low-price message across, and certainly with meals in the $4 range, they were inexpensive.
So, while it's not certain what the changes means, two things may be fairly said. First, after a week, what's happening on the website isn't a computer glitch. Second, Walmart has experimented with ideas before, abandoning one business concept to develop another. It did so with hypermarkets. It tried to operate such Euro-stores for a while before deciding they weren't going to go anywhere. In fairness, European hypermarket operators Carrefour and Auchan couldn't make them work in the United States either.

Walmart walked away and developed its own variation on the supercenter, which worked out a little better for the company. So, if Walmart only walks away from its store test with a new Marketside food line, who knows where that may lead? Marketside boutiques in the retailer's Neighborhood Markets or supercenters could provide convenience meals in an assortment it could tailor to location needs and not have to keep sufficiently hefty to support a whole store operation, even if one that's only 15,000 square feet. And the expensive spoilage associated with the refrigerated convenience meals, the kind of thing Walmart hates, would be offset by lots of groceries and general merchandise.

What's going on with Marketside's website might signal an end or a new beginning.