LIANE HANSEN, host:
Big box chain Wal-Mart is beginning to think small. The world's largest retailer plans to build express markets across the country. The reduced retail design allows the company access to small-town streets, but it also poses a new threat to local merchants. Jacqueline Froelich of member station KUAF in Fayetteville, Arkansas has more.
JACQUELINE FROELICH: Possibly the world's tiniest Wal-Mart is here on the University of Arkansas Campus in Fayetteville.
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FROELICH: The garage-sized prototype carries many of the things college kids crave: frozen pizza, soda and candy. Today, Ian Plummer's buying mac and cheese.
Mr. IAN PLUMMER (Student, University of Arkansas Fayetteville): It's definitely cheaper than a lot of the other places on campus. It's nice to save a little bit as well.
FROELICH: Arkansas-based Wal-Mart is building smaller supermarkets and express markets in order to better fit on Main Street and to compete to burgeoning dollar store chains. Some of these new smaller Wal-Marts will even have pharmacies, including this one in Prairie Grove.
Marilee Nelson operates the Antique Emporium, just a few doors down from her town pharmacist.
Mr. MARILEE NELSON (Antique Emporium): And so, if the new pharmacy comes in, well, people will tend to go there, 'cause they're going to get their eggs and their bacon and their lettuce and their drugs.
FROELICH: And that's exactly what Wal-Mart is hoping shoppers will do. Reading from a prepared statement, Wal-Mart spokesman David Tovar describes likely inventory.
Mr. DAVID TOVAR (Vice President of Communications, Wal-Mart): Specifically, the new format will feature an assortment of fresh food, dry grocery, consumables, health and beauty aids, over-the-counter medicines and limited general merchandise.
FROELICH: Mel Collier owns a small pharmacy in Prairie Grove. He says their Wal-Mart survival plan is to do more for their customers.
Mr. MEL COLLIER: We offer the personal service; we have free delivery. We do the things that they're not going to do. We're going to have the personal patient interaction, and it's just not something Wal-Mart's known for.
FROELICH: But independent store owners have reason to worry. Nelson Lichtenstein is author of "The Retail Revolution: How Wal-Mart Created a Brave New World of Business."
Mr. NELSON LICHTENSTEIN (Author, "The Retail Revolution: How Wal-Mart Created a Brave New World of Business"): If the Wal-Mart initiative is successful, of course, it will have a competitive effect on small urban retailers of, you know, less than 20,000 square feet, of which there are lots and lots of stores.
FROELICH: And of course, Lichtenstein says, the dollar store chains.
Mr. LICHTENSTEIN: Those are the ones that are really cheap. They're dirty, they're understaffed, they're in strip malls. But they're now expanding. This is a function of the terrible economic conditions for many American consumers. And Wal-Mart wants to meet that challenge.
FROELICH: That's because research shows nearly half of Wal-Mart's customers now browse dollar stores.
For NPR News, I'm Jacqueline Froelich in Fayetteville, Arkansas.
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