Wal-Mart smaller grocery stores to rival Tesco-FT

NEW YORK, Jan 14 (Reuters) - Wal-Mart Stores Inc (WMT.N) will open small-format grocery stores in Arizona under the name "Marketside" to rival British retailer Tesco's (TSCO.L) Fresh & Easy markets, the Financial Times reported on Monday.

The pilot stores are roughly 20,000 square feet in size, the Financial Times said. Wal-Mart's existing Neighborhood Markets, which sell fresh produce and other groceries, span more than double that area, according to the company's Web site.

Wal-Mart, the world's largest retailer, has acquired leases for four locations near Phoenix, some of which are close to where Tesco is setting up its grocery stores, the report said.

"We trial and test different ways to serve our customers all the time, and this smaller Neighborhood Market is an example of that," a Wal-Mart spokeswoman said.

However, she declined to confirm the details in the Financial Times' report.

Wal-Mart operates about 130 Neighborhood Markets, the spokeswoman said. (Reporting by Aarthi Sivaraman; Editing by Lisa Von Ahn)