Wal-Mart keeping close eye on Tesco's U.S. stores

Wal-Mart is very much concerned about Tesco’s Fresh & Easy Neighborhood Market stores opened in the United States last year, its chief merchandising officer said on Monday.
"We have people in those stores every day, every week," said John Fleming, speaking at a Bank of America conference, of Fresh & Easy. "We continue to monitor the progress that they make."
Tesco entered the U.S marketplace late last year, setting up Fresh & Easy Neighborhood Markets stores in California, Arizona and Nevada.
The smaller, convenience-sized stores seek to woo shoppers who are looking for ready-to-eat meals and fresh produce, and might not have time for a trip to a full-scale grocery store.
Wal-Mart is preparing the launch of its own small-format grocery stores in the Phoenix area. The stores, set to open this season end, will be called “Marketside” and feature prepared meals and perishable items.
Fleming, whose comments were broadcast over the Internet, said Wal-Mart is studying different store formats beyond its supercenters that combine a full grocery store with general merchandise. While Wal-Mart touts the supercenter's one-stop shopping convenience, the stores can be more than three times the size of a U.S. football field.
"Convenience is certainly a trend in the future," Fleming said.
Wal-Mart has remained tight-lipped about its plans for Marketside. In June, Eduardo Castro-Wright, head of Wal-Mart's U.S. division, said the Marketside stores would feature a smaller assortment than a traditional grocery store and focus on fresh goods.
He said Wal-Mart shoppers might shop at the company's large supercenters once a month and go to its grocery-based Neighborhood Markets once a week, but would use Marketside for quick trips to buy perishables.
Wal-Mart is planning out various other new store formats to defend itself from Tesco and also to retain its current customer base and also to extend it in the future.