Wal-Mart is expected to take a cautious approach to the roll-out of its smaller-format grocery stores, which are set to launch in the US this summer.

The 20,000 sq ft Marketside stores will compete head on against Tesco’s fledgling Fresh & Easy stores, which launched on the West Coast in November.

The openings mark Wal-Mart’s first new trade name in more than 20 years.

The world’s largest retailer has secured leases on four properties to the southeast of Phoenix, Arizona – some only a mile from locations where Tesco is setting up its 10,000 sq ft Fresh & Easy stores.

Planet Retail global research director Bryan Roberts said the scale of Wal-Mart’s plans is unclear. “I think it is an experiment rather than a full-blown roll-out,” he said. “I do not think it is any real coincidence that they have parked their tanks on Tesco’s lawn. They are targeting Tesco’s market.”

According to Roberts, the trial will require a “totally different supply chain and merchandising discipline” for Wal-Mart, whose US shops range from 40,000 sq ft Neighborhood Market stores to 220,000 sq ft Supercenters.

However, if Wal-Mart rolls out the Marketside format aggressively it will be a blow to Tesco, which aims to have 50 Fresh & Easy stores in the US by the end of February.

A key factor in Wal-Mart’s favour is that it has experience running smaller format stores in both South America and Mexico.

Wal-Mart posted comparable store sales up 2.3 per cent in the US for the five weeks ending January 4.

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