Last month this space featured an Insight titled, Finally, Target Joins the Trend: Radical Downsizing.  The piece noted that as several prominent national chains were testing new, smaller prototypes, Target had not indicated any intention at trying a significantly smaller Target model.

The piece added that while Target had debuted its CityTarget model during the summer of 2012, as an approach to accommodating the unique demands of densely populated urban areas, these formats typically come in around 80,000 sq. ft.  While these were easily the smallest stores in the company’s plans, they were by no means being mistaken for anything other than a slight variation from the Target mold.  After a year and a half since premiering the CityTarget prototype, there are just eight such stores in existence.

Last month’s Insight however was discussing the coming of the soon to be, newest Target format.  TargetExpress is a 20,000-sq.ft. concept store which is expected to open this coming July.  The concept’s initial site will be in downtown Minneapolis.  The launch is essentially in the ground floor of an apartment building which is under construction.  It is near the University of Minnesota campus.

The name Target execs chose for the new prototype is interesting as well.  It harkens to Walmart’s designation for its second smallest prototype*, Walmart Express.  Though typically at 15,000 sq. ft. for the moment, it is slightly smaller than the proposed TargetExpress.  Both concepts are essentially in the testing stages and up for regular reconsiderations and tweaking.  However, Target’s choice of a trade name for its soon to be smallest edition, tells which company it is likely eyeing as a model for its near-future projects. That would be Walmart.

Of course, Walmart initiated its Express format in 2011.  From the start, in-store signs requested suggestions and feedback from customers and stated that the new concept was a work-in progress.  After a year and a half of openings and a key closing in downtown Chicago, the company put a hold on opening new Express stores.

Last year, after announcing sluggish domestic financials, Walmart reiterated its commitment to its small formats.  The company focused on its Neighborhood Market, the 38,000 sq. ft. supermarket based prototype and seemingly decided to pump new life into the lagging Express concept.  Later in the year, at investor forums, the company stressed plans to open between 120 and 150 units between its two ‘small format’ concepts.

Now Walmart is upping its small store ante, actually, doubling its commitment.  The company recently announced that it now plans to grow its combined small prototypes by between 270 and 300 units during the fiscal year recently begun.  Walmart currently operates nearly 350 Neighborhood Markets and 20 Express locations.

It is believed that a key to the inspiration behind the Walmart Express format was the company’s long time admiration/envy of the incredible growth of the leading dollar store chains.  This dates back to long before the recession hit, as dollar chains eagerly began to expand their grocery offerings. They then incorporated perishables into their stores, to increase the rate of customer visits along with average tickets totals.

A couple of years ago Walmart added distinctly marked Dollar Station displays at various locations within stores, to appeal to the single price, Dollar Tree crowd.  These were basically skimpy, cardboard bins, seemingly placed in stores at the discretion of individual store managers.  Walmart Dollar Stations have met with little success, likely much too little, too late in terms of placement and promotion.

This contrasted with an earlier initiative by Target, which placed their ‘dollar section’ initiative by each store’s entrance.  Wire, metal bins and signage, with lots of $$ signs gave the area a permanent feel.  After a while, this section’s prices varied from $1 to $2.50.  These remain a Target fixture greeting customers as they enter their big boxes.

Now Target seems to be following Walmart in naming an Express prototype with a likely similarly slow if not slower rollout.  Both seem uncertain as to what their final Express prototypes will represent.

Walmart continuing to lump its Express opening plans with its Neighborhood Markets, under the guise of ‘small stores’, indicates a lack of confidence in the future of Walmart Express as its own entity.  After all this time and considering the continuing stunning growth of dollar store chains, before, during and as we hopefully approach the end of the recession, one would hope to see Walmart finally decide what its Express format should look like.

Recently there have been rumors of a possible Walmart acquisition of Family Dollar.  Many doubt this will actually happen.  Certainly such an imposing acquisition would effectively quash the Walmart Express project.  Or would it lead to Express stores emerging as a Family Dollar ‘Plus’ type format?

*For those still wondering, Walmart on Campus is the company’s smallest prototype.  These stores serve university campuses and currently average just over 2,200 sq. ft. per location.  This prototype actually outgrew the Walmart Express prototype during the recently completed fiscal year 9 (for a total of 12 Campus stores) to 7 (for a total of 20 Express stores).