As has been mentioned several times in this space through the years, Walmart is once again displaying major symptoms of dollar store envy. It seems that periodically the big box giant comes up with a new plan or simply an announcement which is fairly transparent in terms of indicating a new initiative aimed at more directly competing with their much smaller box dollar retailing brethren. Lately, a number of stories have come out on this subject based on statements and presentations made by Walmart brass, including and especially the CEO of Walmart US, Bill Simon.

Walmart’s smaller format stores have been prominently promoted at recent shareholder meetings and investment forums. In fact they have almost reached ‘star status’ from a company that has any number of newsworthy issues to discuss. Certainly the company’s seemingly endless succession of lawsuits, many having to do with human resources-based issues would merit serious discussion. There are now serious questions about a supply chain where until recently mysterious subcontractors would take the brunt of negative press. That likely has changed with a fire in Bangladesh.

On the positive side Walmart has been a leader in sustainability. Here, Walmart’s leadership in conserving resources and energy dates back to well before it became fashionable to be energy efficient. Of course, Walmart was clear that it was viewing efficiencies as efforts to aid the bottom line.

On the positive side too, as we have seen in recent commercials, Walmart is increasing its vigilance in obtaining fresher, often locally grown produce, to enhance its low price reputation with one of quality. This could help to balance the lingering embarrassment of shortages of product on the shelves at many locations. Unfortunately, as with conserving energy on the positive side, this is an issue which, in addition to inconveniencing shoppers, directly hits the bottom line.

Now Walmart has again decided that its envy of dollar retailers has gotten the better of its psyche and again has set its sights on competing more directly with that market. When Walmart’s dollar store envy reared it head fairly often in the past, it had shown up mostly in the form of innuendo and occasional store planning announcements.

Now however the news emanating out of Bentonville is specifically focused on the future of what the company terms its smaller-format stores which consist of its Neighborhood Market and Express formats.

This fiscal year, Walmart plans to open its largest amount of smaller format stores to date, about 115. The Neighborhood Market and Express locations should account for about 40% of stores the retailer opens. The company expects to be operating at least 500 Neighborhood Markets by 2016. Walmart currently operates 258 Neighborhood Markets, which is up from 241 units as of the company’s fiscal year end at the end of January. If all goes as planned the company should be approaching 350 units by January 2014. That leaves an aggressive expansion average of over 150 new units over each of the next two years.

The status of Walmart Express is a far murkier topic. Within a half year of its initial opening there were ten more. Then expansion seemed to be placed on pause. Signs in Express stores asked customers for suggestions on improvements for the concept. As expansion virtually had stopped and a prime location in Chicago was closed, it was clear that this was a work in progress. In the first quarter of this year, Walmart opened four new Express stores. As of now it seems there is at least some progress on the Express expansion front.

Walmart feels that with its vast sourcing resources, it can beat dollar store retailers at their own game. However Walmart defines ‘small format’ as prototypes offering less than 60,000 sq. ft. Express locations come in at around 15,000 sq. ft. Most dollar stores average 7,000 sq. ft.-8,000 sq. ft. While this places a limit on total products offered it also offers a more efficient and focused shopping experience.

To enhance its increasing scope of groceries and better incorporate additional lines of perishables and now even organic foods, Dollar General has expanded its traditional prototype with two new ones. The Dollar General Market and Dollar General Plus formats approximate the size of Walmart Express locations and place the general merchandiser more firmly into the realm of grocer.

How they will fare against nearby Neighborhood Market locations is currently an interesting but speculative issue as new store openings unfold on both sides of the aisle. As to the future of Walmart Express we must respect it as a work in progress.

Walmart’s immense buying power will not frighten the very competitive and rich dollar chains from opening near ‘small format’ Walmart locations. Dollar Trees located near Neighborhood Market locations generally thrive. The company seeks these locations as the much larger Walmart store is a magnet for the type of price conscious shoppers who enjoy the merchandising Dollar Tree stores offer.

In addition to general merchandise dollar retailers, there is a grocery-based low price retailer which is currently seeking to open locations near Walmart stores for much the same reason as Dollar Tree. Aldi feels it generally beats Walmart pricing and continues to open locations within close proximity to Walmart stores. Here too we have a company that sees Walmart as a natural attraction to its type of budget conscious customers. While Aldi offers few national brands, it rests its reputation on well-priced, quality private label foods with an expanding volume of meats and fresh produce. It is likely that Aldi would welcome placement in a Walmart price comparison commercial.

Walmart’s dollar store envy was most recently seen as it introduced groups of cardboard bins called ‘Dollar $tations’ to its locations. These were believed to be an answer to the single price model of Dollar Tree. The bins were placed in distinctly different areas in various stores. Some adjoined consumer electronics departments, while others were placed in makeshift aisles at the front of the store.

These bins contained virtually no standard Walmart fare. They seemed to include product that the retailer could offer for exactly one dollar, regardless of any consumer appeal they might have. With considerable publicity behind this new dollar program, Walmart was likely contemplating another work in progress.

Nearby many of these ‘Dollar $tations’, were simple barrels offering various categories of standard Walmart fare with price signs offering the contents at $ 0.88 cents each. There was generally considerably more activity around these barrels than at the much publicized ‘Dollar $tations’.

At last sighting it seems that word on the ‘Dollar $tations’ project has been toned down and the already small space devoted to these stations cut in half. Lately some of the ‘Dollar $tations’ have had to compete with additional nearby temporary displays offering themed products for varied low price points, including just under a dollar.

Walmart will undoubtedly succeed in its plan to fill the landscape with Neighborhood Markets. Whether or not it meets its lofty goal for 2016 likely depends on the popularity of its newer locations with consumers. As of now dollar retailers and discounters are not running scared.

How the Express concept evolves probably won’t be apparent for at least a year and currently frightens no one. Many feel Walmart should be happy being a powerful big box retailer. That however is not Walmart.