What it's like to shop at Walmart's store of the future that is becoming a threat to Whole Foods and Trader Joe's

Walmart Neighborhood MarketBusiness Insider/Hayley Peterson

Walmart's store of the future is nothing like the retailer's giant supercenters.

The Neighborhood Markets, as Walmart calls them, are much smaller, located closer to city centers, and carry only groceries and consumables.

The Markets pose a major threat to traditional grocers like Whole Foods, Kroger, and Trader Joe's, according to Moody's Vice President Charles O'Shea.

O'Shea says the Markets have a distinctive advantage over rivals because they can use Walmart's supercenters as supply hubs. He predicts that they will eventually outnumber supercenters.

The company now has 656 Neighborhood Markets and more than 3,400 supercenters.

"This is a very powerful format for Walmart," O'Shea told Business Insider.

We visited a Neighborhood Market in Richmond, Virginia to check out what it offers.

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The outside of the store looks pretty similar to a regular Walmart with a more compact parking lot.

The outside of the store looks pretty similar to a regular Walmart with a more compact parking lot.

The inside is remarkably smaller than a regular Walmart, however, with only about 10 aisles. It's like a mini Kroger.

The inside is remarkably smaller than a regular Walmart, however, with only about 10 aisles. It's like a mini Kroger.

Most Neighborhood Markets are about 42,000 square feet, which is about one fifth of the size of a Walmart supercenter.

Most Neighborhood Markets are about 42,000 square feet, which is about one fifth of the size of a Walmart supercenter.

The first thing you see when you walk inside is the fresh produce section. The company is planning to build up to 95 more Markets this year, which is a smaller number than previously planned. Walmart US CEO Greg Foran said last week that the company is hedging growth of the concept to "focus on improving profitability and the productivity of this format through enhanced fresh and access to services."

The first thing you see when you walk inside is the fresh produce section. The company is planning to build up to 95 more Markets this year, which is a smaller number than previously planned. Walmart US CEO Greg Foran said last week that the company is hedging growth of the concept to "focus on improving profitability and the productivity of this format through enhanced fresh and access to services."

The section is stocked with most of the fruits and vegetables you would need for most basic recipes.

The section is stocked with most of the fruits and vegetables you would need for most basic recipes.

There's even a small organic section. The fruits and vegetables all look fresh and unblemished.

There's even a small organic section. The fruits and vegetables all look fresh and unblemished.

There are crates of extra produce underneath the displays, which makes restocking easier and faster for employees. It also allows employees to restock empty shelves from the sales floor — where they can also help customers — instead of having to leave the sales floor to pick up produce from the back of the store, a Walmart spokesperson told Business Insider.

There are crates of extra produce underneath the displays, which makes restocking easier and faster for employees. It also allows employees to restock empty shelves from the sales floor — where they can also help customers — instead of having to leave the sales floor to pick up produce from the back of the store, a Walmart spokesperson told Business Insider.

I was pretty surprised to see this much empty shelf space in the produce section, however. We reached out to Walmart corporate about the empty space, and a spokesperson apologized and said this particular store was installing new shelves in the produce area so employees had to empty and restock the section. The shelves remained empty for the duration of my one-hour visit.

I was pretty surprised to see this much empty shelf space in the produce section, however. We reached out to Walmart corporate about the empty space, and a spokesperson apologized and said this particular store was installing new shelves in the produce area so employees had to empty and restock the section. The shelves remained empty for the duration of my one-hour visit.

The packaged fruit section was also a little bare. This isn't because there weren't any employees around. There were two very helpful employees working in the produce section for the duration of my visit.

The packaged fruit section was also a little bare. This isn't because there weren't any employees around. There were two very helpful employees working in the produce section for the duration of my visit.

Overall the customer service was exceptional. There were employees present in almost every aisle of the store and each of them greeted me enthusiastically and asked if I needed help. One employee offered to get me a cart, since my basket looked heavy. Several offered to help me find the items I was looking for.

Overall the customer service was exceptional. There were employees present in almost every aisle of the store and each of them greeted me enthusiastically and asked if I needed help. One employee offered to get me a cart, since my basket looked heavy. Several offered to help me find the items I was looking for.

The deli and bakery appeared to be well stocked with sandwich meat, but appeared to be running low on rotisserie chicken.

The deli and bakery appeared to be well stocked with sandwich meat, but appeared to be running low on rotisserie chicken.

A Walmart spokesperson said the store restocks rotisserie chicken at lunch and dinner, and these were chickens left over from the lunch rush. To prevent waste, the store matches their cooking to customer demand, so the number of chickens available throughout the day vary according to customer traffic patterns.

A Walmart spokesperson said the store restocks rotisserie chicken at lunch and dinner, and these were chickens left over from the lunch rush. To prevent waste, the store matches their cooking to customer demand, so the number of chickens available throughout the day vary according to customer traffic patterns.

The bakery features goods like fresh baked cookies, cupcakes, and bread.

The bakery features goods like fresh baked cookies, cupcakes, and bread.

The wine and beer selection is extensive. Customers near some Neighborhood Market locations can order their groceries online and then pick them up at stores. Walmart has rolled out out online grocery pickup in 20 cities.

The wine and beer selection is extensive. Customers near some Neighborhood Market locations can order their groceries online and then pick them up at stores. Walmart has rolled out out online grocery pickup in 20 cities.

There are two aisles devoted to non-alcoholic drinks, including soda, water, and sports drinks. On top of the shelving, a few pieces of furniture and baby items are displayed.

There are two aisles devoted to non-alcoholic drinks, including soda, water, and sports drinks. On top of the shelving, a few pieces of furniture and baby items are displayed.

There's also a grill for sale in the soda aisle. Other than these items, the store focuses entirely on groceries and consumables.

There's also a grill for sale in the soda aisle. Other than these items, the store focuses entirely on groceries and consumables.

All the middle aisles were very well stocked, clean, and tidy.

All the middle aisles were very well stocked, clean, and tidy.

Some aisles were a little redundant, however. It doesn't seem like this much space needs to be devoted to vegetable oil.

Some aisles were a little redundant, however. It doesn't seem like this much space needs to be devoted to vegetable oil.

Or ketchup.

Or ketchup.

The store also had an abundance of Ranch dressing.

The store also had an abundance of Ranch dressing.

And still more Ranch dressing.

And still more Ranch dressing.

I found a few kitchen appliances for sale, like coffee machines, toasters, and toaster ovens.

I found a few kitchen appliances for sale, like coffee machines, toasters, and toaster ovens.

There was a large selection of meat for sale, as well. “Our customers love Neighborhood Markets because they offer the convenience of a local grocery store and pharmacy, plus millions of additional items on Walmart.com with free pickup," Walmart spokesman John Forrest Ales told Business Insider. "That’s an unbeatable combination of easy shopping and a great compliment to our supercenters."

There was a large selection of meat for sale, as well. “Our customers love Neighborhood Markets because they offer the convenience of a local grocery store and pharmacy, plus millions of additional items on Walmart.com with free pickup," Walmart spokesman John Forrest Ales told Business Insider. "That’s an unbeatable combination of easy shopping and a great compliment to our supercenters."

The store's small size made it easy to find the items I was looking for. If I needed to make a quick grocery run, I would prefer coming to this Neighborhood Market over my local Kroger, which is much larger.

The store's small size made it easy to find the items I was looking for. If I needed to make a quick grocery run, I would prefer coming to this Neighborhood Market over my local Kroger, which is much larger.

Two aisles devoted to frozen food feature several bins of low-price items.

Two aisles devoted to frozen food feature several bins of low-price items.

Hershey's chocolate syrup was prominently featured in the ice cream aisles.

Hershey's chocolate syrup was prominently featured in the ice cream aisles.

The Neighborhood Markets have been very successful so far in terms of sales. The markets reported same-store sales growth of 7.3% in the most recent quarter, compared to 1.5% same-store sales growth for all of Walmart's US stores.

The Neighborhood Markets have been very successful so far in terms of sales. The markets reported same-store sales growth of 7.3% in the most recent quarter, compared to 1.5% same-store sales growth for all of Walmart's US stores.

About 75% of the store is devoted to edibles, and the remaining 25% features cleaning products, pet supplies, and the pharmacy. Separating this section from the food makes it very easy to find exactly what I'm looking for.

About 75% of the store is devoted to edibles, and the remaining 25% features cleaning products, pet supplies, and the pharmacy. Separating this section from the food makes it very easy to find exactly what I'm looking for.

Not a single item was out of place in the laundry aisle.

Not a single item was out of place in the laundry aisle.

The shelving near the pharmacy is low, making it easy to find the pharmacy window.

The shelving near the pharmacy is low, making it easy to find the pharmacy window.

On my way to the checkout, I encountered several shelves with cheap clearance items for sale.

On my way to the checkout, I encountered several shelves with cheap clearance items for sale.

There were no long lines at the checkout, even though there was a steady stream of customers in the store. Checkout was quick and easy.

There were no long lines at the checkout, even though there was a steady stream of customers in the store. Checkout was quick and easy.

Overall, I was really impressed by the store and the customer service. It didn't feel at all like I was shopping at a Walmart store. It's a completely different experience and it's easy to see why this concept is succeeding.

Overall, I was really impressed by the store and the customer service. It didn't feel at all like I was shopping at a Walmart store. It's a completely different experience and it's easy to see why this concept is succeeding.
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