Wal-Mart: Not accelerating Marketside test

By Nicole Maestri and Lisa Baertlein

BENTONVILLE, Arkansas (Reuters) - Wal-Mart Stores Inc (WMT.N) said on Friday that it is not accelerating the test of its convenience-sized grocery stores, called Marketside, given the economic climate.

"We're pleased with it, but at this point in time given the current condition in the marketplace, with a significant reduction in demand ... we are not accelerating that effort until we have better data to make a decision," Wal-Mart Vice Chairman Eduardo Castro-Wright told reporters after the retailer's annual meeting.

In October, Wal-Mart officially opened four Marketside stores in the Phoenix area. The 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.

Marketside stores are roughly 15,000 square feet, while Wal-Mart's supercenters average 187,000 square feet.

The Marketside test came after British grocer and rival Tesco (TSCO.L) opened Fresh & Easy stores in the United States in late 2007.

Tesco is now making major changes in its Fresh & Easy stores as analysts worry that the U.S. chain is still searching for a successful niche.

In what it calls an "evolution," Tesco is putting more focus on value and adding about 1,000 items to Fresh & Easy stores' current 3,500-product assortment, which represents about 10 percent of what a typical U.S. supermarket carries.

(Reporting by Nicole Maestri; Editing by Richard Chang)