Wal-Mart Stores Inc. plans to open a 31,000-square-foot grocery store in Panorama City by the end of the year — the first in the city of Los Angeles and among the first in the state. Construction is underway on the new Walmart Neighborhood Market, which will breathe new life into The Vannord Center, a struggling retail center located at the corner of Nordhoff Street and Van Nuys Boulevard. The grocery store will occupy the former Valley Foods Warehouse space, which has been vacant since the supermarket shuttered five years ago. “We think our store is going to be a magnet for growth and development,” Wal-Mart spokesman Steven Restivo said. Terms of the lease were not disclosed. Wal-Mart has been expanding into the crowded Southern California grocery market with a mix of store formats, ranging from its Supercenter to the much smaller Neighborhood Market. Its competition ranges from major grocers such as Ralphs, Albertsons and Vons, which dominate the market, to retailers such as Trader Joe’s, Whole Foods and Fresh & Easy, which are angling to grab additional market share with health food offerings and store openings. The Bentonville, Ark.-based company the world’s largest retailer, has announced 13 other Neighborhood Markets in California, including one in Camarillo and another in Los Angeles’s Chinatown. The Chinatown store drew condemnation from labor groups, but is scheduled to open next year. The Panorama City neighborhood was an attractive location given the lack of fresh, healthy food available to residents, Restivo said. The new small-scale market will sell produce and groceries. It also will have a bakery, deli, pharmacy and one-hour photo department. The store will employ about 65 full- and part-time workers. The Vannord Center was hit hard when former anchor Valley Foods left. Vacancies litter the property, and on a recent afternoon, foot traffic was nearly nonexistent. “This is amazing good fortune for the center,” Vannord manager Suzanne Ponder said. Historically, the 90,000-square-foot center had been fully leased, but that changed when its anchor left, Ponder said. Vandals went after the building’s copper and there are currently about 15 vacant storefronts, totaling about 31,000 square feet; and that’s not counting the shell of a building Walmart will occupy, she said. Carlos Blanco, owner of Panaderia La Competidora, said when Valley Foods left, it took a bite out of his business, causing customers to disappear and nearby shops to close. “Now that Walmart is coming we are going to have more people coming in,” Blanco said. Restivo said the Neighborhood Market will not compete with nearby specialty shops such as Blanco’s or other ethnic groceries, rather it will drive investment into the area as more people visit Vannord’s new anchor. Blanco agreed, saying he doesn’t expect Wal-Mart’s offerings to be anything similar to the specialty empanadas, conchas, polvorones and other Latino breads and pastries he sells. “When they told us there was going to be a Walmart, it was awesome for us.” Wal-Mart opened its first Neighborhood Market in 1998. Nationwide, there are currently 167 such stores, which total about 42,000 square feet on average and carry about 29,000 items. The company has announced plans to open between 80 to 100 additional smaller format stores, most of them Neighborhood Markets, by the end of January. In recent years, Wal-Mart has become more flexible with its space requirements, as the company wants its stores to be a reflection of the surrounding neighborhoods, Restivo said. Still, Wal-Mart Supercenters, which average about 185,000 square feet, account for the vast majority of the retailer’s stores nationwide. Opening stores in already entitled properties has allowed Wal-Mart to side-step some of the hurdles the company has faced from community groups and labor organizations when it builds a new store from the ground up. For example, Wal-Mart plans to open a general merchandise store during the first quarter of next year at a former Mervyns, location in Simi Valley. The general merchandise store sells an assortment of discounted goods along with limited food offerings. Simi Valley City Planner Paul Drury said no public hearing is required to approve the store. “It was a Mervyns before — it’s retail out and retail in,” Drury said. “They can just go in by right,” he said. Restivo said the new Panorama City Neighborhood Market location is fully entitled and the company has acquired all the necessary permits. “We look forward to opening by the end of this year,” he said.