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In a briefing reported by the Financial Times, Walmart suggests it is hitting an inflexion point in its business as shoppers wanted smaller stores closer to their homes. While its model of big out-of-town stores is still successful, Bill Simon, head of the US business, said consumers were reluctant to drive long distances to shop and people were moving back to city centres. He split shopping trips into three types: - large grocery shops often at weekends (falling) - medium-sized purchases (flat) - "immediate access" trips (growth). Competition with small stores was intense as dollar stores had expanded, drug stores were competing for sales and competitors were opening small format stores. What does a Walmart small store look like in the US? - Neighbourhood markets = 38,000 sq ft - Express stores = 15,000 sq ft. Simon stressed that Walmart was not abandoning its business model as a mass market discount retailer.

Luke Johnson, the entrepreneur behind Pizza Express and former head of Channel 4, is a compulsive reader and he warmly recommended Made in America by Sam Walton. For years I resisted the chance to read the story of the man who made Walmart and boy was I wrong. Quite simply this is a brilliant manual on what you need to do to be a successful independent retailer. In one chapter on thinking small, Walton says: “I always wanted to be the best retailer in the world, not the biggest.” In 1960 in a newspaper article called Success Story of the Year it described how he and his family and managers had built up a nine strong chain of variety stores. He told the paper that nine was as big as it could get as it was as many as he could supervise. Most readers don’t need to worry how he moved beyond nine to become the biggest retailer in history (he did this by hiring and inspiring great people). What they need to recognise is that Walton remained a great independent retailer till...

This is an important question, according to Seth Godin, the world’s leading blogger on sales and marketing. This question is just one part of his latest book, The Icarus Deception , which tells us not to be afraid to fly too high. Godin is left field of most business book writers that you will come across. He writes like Dr Seuss with more words but the same tipping from the insane to cold common sense truth. Perhaps he knows this is his style. In his introduction he has one sub head referring to “green eggs and ham”. Godin tells us that to be successful today, we have to be artists. Are local retailers artists? I think so. He does too. On page 97 he shows a picture of a blackboard outside Joe Dough’s store. It says: “Come in and try the worst meatball sandwich that one guy on Yelp ever had in his life.” Good retailers around the UK already engage with their shoppers like this. It is the art that gives them an edge against the multiples. This book is not for everyone. 2013...

"How we interact at a local level is really important to us, and that's why we've launched these local Facebook pages," Stephen Quinn, chief marketing officer of Wal-Mart US, tells Fortune magazine. The full article http://money.cnn.com/2011/12/14/news/companies/walmart_stephen_quinn_leadership.fortune/index.htm  is well worth a read. Mr Quinn explains that retailing is fundamentally a local business. His marketing team has to work out how to build local communities around its 3,500 US stores. For local shopkeepers the challenge is clear. In 2012 you need to think about how you represent your shop on Facebook and similar social media and through the internet. As an exercise, go to Google and enter the word groceries and the name of your town or village. I did it for my village and One Stop came top. I did it for where I work and Sainsbury Local came top. "Our goal is to integrate into the things that are happening in a local commun...

Walmart will be playing catch-up to the lifestyle dynamics of today and tomorrow, versus creating them, Jimmy Wright, a former senior executive, told the FT this week. After two years of falling sales, the paper ran a feature questioning if the era of the superstore was coming to an end. Its US stores have reached their potential. Shoppers are buying smaller quantities and expect promotions. The price of petrol means shoppers don't want to drive so far. Smaller stores in more accessible locations are winning sales. The story should be familiar to UK local shop owners. Flipped around, the story is one of opportunity for independent shops, especially those working in partnership with switched-on wholesale suppliers. But the real significance of the FT story is that in the board rooms of major packaged goods companies they will be reading that the day of big box retailers may be drawing to a close. They will be reviewing their strategies and hopefully working out how they c...

Asda's price guarantee, that it will be 10 per cent cheaper than rival supermarkets, was clearly a marketing stunt from the off. Few people are going to have the energy to complete a major shop in Asda and then check what price the same products were across town at Tesco. However, Tesco has said that it will protest to the Advertising Standards Authority about the "confusing and misleading claim". "It is vitally important that the whole industry acts in a way that deserves the trust of customers," says UK chief executive Richard Brasher. "In our view customers are being misled by false Asda claims." What is remarkable about this is that Tesco is getting twitchy - following on from last week's weak results statement. Local retailers may take comfort from the inference that the market leader is finding things as difficult as they are - whatever you think about the actual issues of the way that supermarkets represent themselves to the media and ...

In its second feature on Tesco this week, the Financial Times discusses Terry Leahy's vision for 10,000 small convenience stores "on every junction of every major city in the US". His working name for the chain was Fresh & Easy. Interviewing the executive who Sir Terry picked to develop Fresh & Easy, Colin Smith, the newspaper finds that after 18 months of research his team came up with a vision very close to that of Sir Terry. The gap was for neighbourhood stores selling fresh, cheap food and that was easy to shop in terms of range and location. The target sales density was between $14-$20 a square foot, above the US average of $10 a square foot. But most US stores are much bigger than the Fresh & Easy model. In contrast, the UK Tesco Express stores achieve £20-£30 a square foot ($31-$46). The speculation is that Tesco may give up on F&E because it can make more money in Asia, where its incoming chief executive Philip Clarke has made his name. Howev...

There was a statistic in Fortune magazine's listing of the top 500 companies that caught my attention. Number one company Wal-Mart had just under 1 billion square feet of floor space worldwide. Think of it another way, it is operating 1 million 1,000 sq ft c-stores. This investment in floor space for shoppers shapes the world independent retailers operate in. Back in the UK, last week Tesco announced it was back to business as usual, with sales up and profits up. Its like-for-like sales uplift was 3.2 per cent, which is a useful benchmark for local shopkeepers to use in assessing whether they are ahead of or behind the market. But looking forward, it expects to grow sales by adding space. This year Tesco plans to add 181 Express stores, which is 460,000 extra square feet of selling space and will take its estate to 1,310 shops. In addition it will add 32 One Stop shops, adding 61,000 square feet of selling space and taking it to 540 One Stop outlets. Terry Leahy, chief executive, s...

Last week's announcement by Wal-Mart that it had set up a partnership with Li & Fung is big news. Perhaps not for UK corner shops today. But read on and think how this deal could make Asda stronger over the next five years. Li & Fung started out as a company that sourced products in China for wholesalers and distributors. It then moved into distribution and beyond. For example, today it runs shops in south east Asia for brands like Calvin Klein and Gant. It provides marketing, logistics and manufacturing services. "As we do not own any brands, we devote all our resources and efforts to supporting our clients," it says on its website. Now Wal-Mart seems to agree, saying that it will save between $4bn to $12bn on purchasing over the next five years. That is a lot of extra profit...or support to shoppers in the form of lower prices. The challenge is for UK wholesale suppliers of corner shops to come up with something similar. Local retailers need to pay attenti...

Andy Bond runs Asda, the UK arm of Wal-Mart, and recently agreed to a lengthy interview with the Financial Times newspaper about his views on whether he was the right man for the Marks & Spencer top job. I find it hard to believe that his US employers would be happy for him just to chew the fat with a newspaper about his career options so it was interesting to read what else he was talking about. So when he says that 2010 will be a tough year, he must be talking to someone other than his shoppers. He notes that the 2.5% rise in VAT and other tax increases in the pipeline will be putting presure on the amount of money that households have to spend. Is it a message to suppliers that they will have to trim their prices so that Asda can cut the cost of its products to shoppers? Probably. For many local shops, an upward nudge in January is possibly being pencilled into their business plans now. But don't assume that the multiples will make it easy for you. Think about how it will lo...