SAN JOSE -- Walmart launched a fresh push into San Jose Wednesday by opening its first Neighborhood Market at Westgate Mall in the southwest section of the city.

The 38,000-square-foot store is part of an ongoing expansion by the retailer and a push by Walmart to challenge Safeway, Whole Foods, Lucky and other grocery chains in the Bay Area.

"We are happy to be giving the community fresh and affordable groceries," said Delia Garcia, a spokeswoman for Walmart.

Walmart opened its first Bay Area neighborhood market a few weeks ago with a store in San Ramon.

"San Ramon was very well attended by the community," Garcia said. "We have seen many of those initial customers come back."

Walmart also is planning a new Neighborhood Market store in southeast San Jose's Evergreen district. That market should open in 2013.

Jobs are also being created with the new stores. The San Ramon store has 85 employees. The new west San Jose store has 90 workers, Walmart estimated.

The retailer's Neighborhood Markets will feature a full line of groceries, bakery, self-service deli, meat and dairy products, fresh local produce, frozen foods, a tortilla factory and organic items, Walmart said.

Yet the stores also imperil the market share of Northern California's dominant retailer, Pleasanton-based Safeway.

"Walmart is pretty competitive with these supermarkets," said Patricia Edwards, chief investment officer with Washington state-based Trutina Financial. "You have the buying power of Walmart, their low pricing, and customers can find some things in Walmart that they can't find anywhere else."

The new store in Westgate Mall will have hours from 7 a.m. to 11 p.m., seven days a week.

With the new openings, Walmart now has 14 Neighborhood Markets in California, part of the 220 Walmart has nationwide.

In the southwest San Jose location, Walmart is operating inside a former Safeway store. In San Ramon, the company took over a retail space that had been vacant for years. Similarly, the Evergreen-area store in San Jose is a once-empty retail building.

"We are reusing existing retail space and we hope to revitalize these buildings that had been vacant," Garcia said.

Contact George Avalos at 925-977-8477. Follow him at twitter.com/george_avalos.