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Wal-Mart's Neighborhood Heads West

MESA, Ariz. - Wal-Mart Stores opened its first two Arizona Neighborhood Markets stores in this Phoenix suburb yesterday as part of an effort to capture more market share in the state.

According to a report in the Arizona Republic, Wal-Mart plans on opening two additional Neighborhood Markets in Mesa by the end of the year and will open a Wal-Mart Supercenter in the city on Jan. 21.

"We are looking throughout the Phoenix-metro area" for more Neighborhood Market and supercenter sites, Ed Kolodzieski, a Wal-Mart senior v.p., told the newspaper. But he wouldn't reveal the locations, citing competitive reasons.

The Arizona grocery market is worth some $8 billion, and Wal-Mart's presence is expected to make it more intense. Bentonville, Ark.-based Wal-Mart currently ranks fifth in market share, behind the Fry's Food Stores division of Kroger, Safeway, Bashas', and Albertsons. Wal-Mart is expected to gain significant market share. Kolodzieski likened the Phoenix market to Dallas, where the company has expanded to at least 15 Neighborhood Markets in about three years.

Wal-Mart predicts its prices will be about 25 percent cheaper than its Arizona competitors. "We don't spend time on things that look good and add atmosphere, but we focus on keeping prices low," Kolodzieski told the Republic.

The Wal-Mart Supercenter opening Jan. 21 represents a hard-fought victory for Wal-Mart that took three years to resolve. Three other Mesa sites fell through before it settled on its current location, which then faced more neighborhood opposition and a narrow city council vote. A neighborhood group and union got enough signatures to put the rezoning to a vote. Wal-Mart challenged the petitions in court and lost, but it eventually won when voters approved the rezoning move.
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