(WMT) Walmart Stores Re-zones in Milwaukee

Retail giant Wal-Mart Stores Inc. (WMT) has received re-zoning approval from the Village Board to construct a supermarket store on the former U.S. Bowling Congress office across Southridge Mall in Greendale.

Walmart plans to dismantle the former U.S. Bowling Congress office and build a 92,380-square-foot supermarket and discount store in the Milwaukee area, which will be valued at $10 million.

Gatlin Development Co. will build the store and lease it to Walmart. The construction on the Walmart store will probably begin in late summer. Further, the store will include a pharmacy and grocery with two out-lots for future developments.

Besides this store, Gatlin also plans to develop two smaller, separate retail buildings, with the Walmart supermarket further west of the street.

Apart from Greendale, Walmart has also won zoning approval for other proposed areas in recent months including a supermarket-discount store at Timmerman Plaza shopping center on Milwaukee’s far northwest side, and smaller supermarkets in Wauwatosa, Menomonee Falls and Milwaukee’s west side, near West Allis.

In addition, Walmart is also planning to convert a part of its former Town of Waukesha discount store into a neighborhood supermarket.

However, some of the Walmart stores are still on hold owing to regulatory decisions or oppositions. One supermarket-discount store in South Milwaukee remains on hold indefinitely because of environmental clean-up costs on a portion of the development site. Another Walmart supermarket-discount store in Menomonee Falls has been stalled after the village Plan Commission voted to oppose that proposal.

Recently, Walmart has also announced plans to open 90 to 100 mid-sized Walmart Market stores by January 2012 and 300 by fiscal 2013, up from 185 presently.

These mid-sized Neighborhood markets are more like traditional grocery stores, which enjoy the same returns as the supercenters and entail lesser hassles in being approved and constructed.

Wal-Mart is getting even smaller with Wal-Mart Express, an apt way to regain its businesses that were lost to the dollar stores. Wal-Mart opened its first “Walmart Express” store in Gentry, Arkansas, about six miles from the nearest Wal-Mart supercenter, in early June.

Wal-Mart is cashing in on the popularity of dollar stores and other local drugstores that mushroomed during the recession as consumers were unable to pay higher prices for goods. If this strategy is adopted for the long term then mid-sized stores could be seen mushrooming across the U.S.

Founded in 1945 and based in Bentonville, Arkansas, Walmart operates retail stores in various formats worldwide and competes with Target Corp. (TGT).

Currently, we maintain a Neutral rating on the stock.  Further, Walmart holds a Zacks #3 Rank, which translates into a short-term Hold rating.

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