Walmart (WMT) has a new business model. The company plans to set up small convenience stores, starting in Chicago and Los Angeles.

Walmart already is test marketing its small-store concept in Arizona. They have 10,000-square feet stores under the Marketside by Walmart banner, as well as 20,000-square feet stores under the Neighborhood Walmart logo.

When I lived in Southwest Virginia, my house was about a mile from a Wal-Mart Supercenter. Although I had shopped at Wal-Mart (NYSE: WMT) for years, the convenience of the big store made it into my go-to place for everything from oil filters to rutabagas. I became a Wal-Mart junkie.

One of the things that I quickly noticed about the Squalor Mart was the fact that it is a perfect example of capitalism in action. In my years of shopping at the store, I noticed that obscure products would show up regularly. Sometimes they'd stay, sometimes they'd leave; it all depended upon how well they sold. For example, when the area got a huge influx of Latin Americans, the store dedicated an entire row to dried chilies, beans, hot sauces, tortillas and whatnot. Similarly, as more and more yuppies began frequenting the store, I noticed a definite spike in organic convenience foods. In both cases, Wal-Mart offered better prices (and better service) than the small stores that specialized in these obscure items.

Wal-Mart's problem lies not with what it can offer, but with what it can't: intimacy and a small scale. This, of course, is why many areas have fought so hard to keep Wal-Mart out. They don't want to lose their cute little neighborhood stores to the big, bad capitalist behemoth, which leads to an inevitable question: can Wal-Mart, the ultimate superstore, offer a shopping experience that is anathema to its time-proven formula?

America's largest home improvement superstores, Lowe's Companies Inc. (NYSE: LOW) and Home Depot Inc. (NYSE: HD) are scheduled to report earnings this coming week. Here's a quick peek at them ahead of results.

Lowe's has missed earnings expectations only once in the past five quarters. When the company reported third-quarter fiscal 2008 results back in November, earnings came to 43 cents per share, beating the consensus forecast of analysts polled by Thomson Financial by two cents. For the current quarter, analysts expect only 25 cents per share, compared to 40 cents in the year-ago quarter.

The company's earnings per share growth forecast for the next three to five years is 19.1%, less than the industry average of 31.6%. The analysts' consensus recommendation is to buy Lowe's, though 10 of 21 analysts rate it a hold. Shares are up from the 52-week low of $19.94 in January, and closed Friday at $23.59.

For news on Lowe's and its rivals that could influence the earnings results, see BloggingStocks' Lowe's coverage.