Walmart has opened its first Neighborhood Market in New York state, settling in a location that shows the competitive challenge faced by drug chains and other retailers as the discount store giant rolls out smaller formats with pharmacies.


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Walmart Neighborhood Market debuts in N.Y.

July 12th, 2013

LEVITTOWN, N.Y. – Walmart has opened its first Neighborhood Market in New York state, settling in a location that shows the competitive challenge faced by drug chains and other retailers as the discount store giant rolls out smaller formats with pharmacies.

The 49,000-square-foot store opened its doors on Friday in Levittown, a Long Island suburb, following a ribbon-cutting ceremony attended by local public officials and community leaders.

About a third of the size of a Walmart Supercenter, the Levittown Walmart Neighborhood Market features a full grocery department, including natural and organic products, as well as an extensive fresh produce area, prepared food items, fresh-baked breads, a bakery and a self-serve deli. The store also houses meat and dairy sections, a large frozen and refrigerated food area, aisles of canned and packaged goods, pet supplies, household supplies and an assortment of general merchandise. The customer service desk also is a pickup area for Walmart's Site-to-Store service for its online store.

As in other Neighborhood Market locations, the pharmacy is a core component of the Levittown store, with its own signage on the front of the building. The department offers a full range of pharmacy products and services, including Walmart's $4 generic drug program, and pharmacy staff are available to answer questions about prescriptions as well as discuss health and wellness solutions.

Surrounding the pharmacy department are aisles of over-the-counter medicines and other health and beauty aids, including a prominent cosmetics section.

"This is the first Neighborhood Market to open in New York and one of the first to open in the Northeast part of the country," said William Wertz, director of communications/East for Walmart, who added that about 40 to 50 customers were lined up in front of the store waiting for it to open Friday morning.

Just a couple of miles down the road from the Levittown Neighborhood Market, in East Meadow, is a Walmart discount store. But Wertz noted the two stores complement each other.

"The Neighborhood Market is a very convenient shopping experience," he said, explaining that the smaller format makes it easier for customers to come in and quickly pick up a few items whereas a full Walmart discount store enables them to stock up and shop the retailer's traditional broad selection of general merchandise. "So the two formats work very well together."

"With respect to pharmacy," he added, "we have the $4 prescription drug program that really has been such a benefit to customers. I can't tell you how many customers I've talked to that have told me about the difference that has made in their lives, being able to pay $4 for a prescription that might have cost them $30 to $40. We pioneered that, and some of our competitors have come along with similar programs. But our program really stacks up well and has attracted a lot of customers."

Overall, Walmart has about 260 Neighborhood Market stores nationwide, typically ranging from 40,000 to 50,000 square feet, according to Wertz.

The Levittown store — situated in the space of a former Waldbaum's supermarket, a chain of regional grocer A&P — demonstrates the both expansion possibilities that the smaller Neighborhood Market concept creates for Walmart as well as the competitive disruption that it presents to other mass chains in large retail markets such as Long Island.

"It gives us a lot of flexibility because a smaller format fits well in situations where there's not as much space available, whether it's an urban area or a shopping center where we're using an existing building or existing space," Wertz said of Neighborhood Market.

Within two or three miles east and west along the main thoroughfare where the Levittown Neighborhood Market is located are a bevy of retail competitors, including a Target discount store (with a P-Fresh grocery department and pharmacy), a BJ's Wholesale Club, a Stop & Shop supermarket (with a pharmacy), a King Kullen supermarket (with a pharmacy), Dollar Tree, Ulta Beauty, two Rite Aid drug stores, and a CVS/pharmacy and a Walgreens drug store.

Yet Wertz said the combination of Neighborhood Market's convenient format and, especially, Walmart's everyday low pricing enable it to compete with anyone.

"Our prices are second to none in terms of affordability, and customers realize that," he said. "They don't have to worry about coupons or shopping on a certain day or taking advantage of a sale. They can come in anytime and take advantage of our low prices."

One-stop shopping also is a draw, Wertz added about the new Neighborhood Market. "It's mostly groceries, but it does have a pharmacy. So that's a convenience for customers as well. They don't to a grocery store and a pharmacy; it's in one format here."

Walmart also operates a couple dozen other small-format stores, including Walmart Express, which are about 15,000 square feet and offer groceries, general merchandise and pharmacies.

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