The Real Estate Trading Game

The Bottom Line By Andrew S. Ross

Walmart? In San Francisco?

As part of its new “urban strategy,” the world’s largest retailer, Wal-Mart Stores Inc., is looking to open two dozen stores in the Bay Area, I’m told.

Most of them are in the East Bay, but also on the Peninsula, in San Jose, and in the city that has always said, “No way, Jose” to the Bentonville, Ark., big-box giant.

But these aren’t big boxes.

Instead, they are the “smaller format” stores favored by the likes of Trader Joe’s Co., Whole Foods Market Inc. and the British supermarket chain Tesco PLC, whose Fresh & Easy “neighborhood markets” are coming to the Bay Area, including San Francisco’s Bayview neighborhood.

And, like these others, they’ll be primarily grocery stores, with plenty of fresh foods and prepared takeout.

“Wal-Mart is throwing out their old playbook,” said Garrick Brown, vice president of research atColliers International, a global real estate brokerage. “They’re going after the urban market, which they haven’t been able to penetrate, mostly because of their size.”

“That’s where the money is”: Wal-Mart has not disclosed details, but Brown said a company source put the nationwide number of planned new, city-centric stores between 300 and 400.”Smaller designs, in the 20,000 -square-foot range, and mostly groceries – that’s where the money is,” said Brown, who noted that 51 percent of Wal-Mart’s U.S. revenue came from groceries last year…Read More.