Wal-Mart's latest major offensive in an already super-competitive Northern California supermarket environment launches today.
The retail giant is simultaneously opening five new Neighborhood Market stores in the Central Valley, three of them in the Sacramento area.
The stores are at 2700 Marconi Ave. in Sacramento, 4080 Douglas Blvd. in Granite Bay, 255 G St. in Lincoln, 1189 E. March Lane in Stockton and 1421 Coffee Road in Modesto.
All five stores open at 8 a.m., with grand-opening festivities scheduled at each site.
For bargain-hunting grocery shoppers and regional commerce officials overjoyed at the prospect of more than 350 new jobs, it's a big day.
For West Sacramento-based Raley's and other grocery chains trying to get concessions from unionized workers and compete against nonunion Wal-Mart, today is a day when things get tougher.
"Wal-Mart is a giant, and when they come to town you know you're in a dogfight no matter if you're selling TVs or tomatoes," said Raymond Flores, a Los Angeles-based retail/ branding consultant.
Started in 1998, Wal-Mart's Neighborhood Market chain now includes 200 stores nationwide. The stores tout quick, convenient shopping for groceries, pharmacy items and general merchandise.
Discount-priced groceries are the primary lure.
The Central Valley stores feature a deli, fruits, vegetables, meats, cheeses and prepared foods. Fresh-baked breads are a staple, as well as a full line of groceries, including frozen foods, meat, dairy and organic offerings. Online shopping options also are offered.
The stores opening today range from 31,000 to 55,000 square feet, but Wal-Mart is shooting for a target average size around 40,000 square feet. That's by design for what Wal-Mart calls a "smaller footprint" store for people to purchase groceries, prescriptions and other household items.
Specialty grocers like Fresh & Easy, which recently opened a number of stores in the Sacramento region, have an even smaller footprint, typically 10,000 square feet.
Raley's stepped into smaller-size stores in 1998 with its purchase of the Nob Hill Foods chain, which has stores in the 35,000-square-foot range. At that time, Supermarket News said the average Raley's store was 62,000 square feet, and the average Bel Air store was around 55,000 square feet.
However, square footage is only part of the story. Raley's officials say they need lower labor costs to regain market share lost in recent years to nonunion stores such as Walmart, Target and Fresh & Easy that have lower overhead.
Besides seeking concessions in labor talks, Raley's has responded by trying to become leaner, closing some stores, and employing a multifaceted marketing blitz. According to online traffic, Raley's is on the verge of formally rolling out a customer-loyalty card.
For its part, Wal-Mart has maintained that it's simply responding to consumer demand and filling jobs. "One of the exciting things about opening five stores in the Central Valley is creating 355 jobs, which are really needed. We had thousands of applications for those jobs," said Wal-Mart spokeswoman Delia Garcia.
The job-creation aspect of Wal-Mart's presence is music to the ears of Roger Niello, president and CEO of the Sacramento Metro Chamber.
"In this tough economy, it is always great news to hear when businesses expand and create jobs in the Sacramento region," he said. "We congratulate Wal-Mart on their five new stores and look forward to partnering with them in building a strong economy."
Wal-Mart said the average wage for its full-time, hourly workers in California is about $12.82 an hour.
Garcia also noted that each of the stores opening today is filling a previously vacant storefront: "We're excited about revitalizing areas where an anchor tenant had vacated, bringing back economic activity."