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Small Format Groceries Take Hold

Tuesday, January 13th, 2009

Who says bigger is always better?

During the last 18 months, large format grocery stores have experienced significant change. Instead of clearing acres of land to put in a 100,000 square foot mega-store, retailers are seeking out small community corner lots in order to put in smaller, approximately 15,000 square foot stores.
Retailers are following the example set by UK-based Tesco who already operates a number of small format ‘Fresh & Easy  NeighborhoodMarkets’ in the U.S.

One might think that these retailers are simply creating smaller versions
of their original stores, however the focus of these stores has actually changed. Retailers are taking advantage of a few prominent trends that have emerged over the last few years – green living with natural and organic foods, meals on the run, and the promoting health trend du jour. As the ‘Super Size Me’ mentality continues to disappear, consumers are looking for healthy and quick alternatives to fast food that are less expensive than running into your local Whole Foods and faster than stopping by the gargantuan King Sooper on the corner.

Albertson’s owner, SuperValu, is currently testing a compact supermarket called ‘Urban Fresh’ that will focus on ready-to-go meals, along with a selection of fresh meats, seafood, and produce in Chicago’s Lincoln Park neighborhood. Just think – you can run into ‘Urban Fresh’ to grab chicken breast for dinner or chips and salsa for a friend’s party in less than 10 minutes. Less time shopping…more time for you.

Even the mother of all retailers, Walmart, has opened several ‘Marketside convenience format stores in the suburbs of Phoenix, Arizona. Marketside’s tagline, “Deliciously Affordable,’ reflects its dual commitment to value and quality. Unlike Walmart’s Neighborhood Market and Walmart Super Centers, Marketside does not identify its parent company in stores or marketing materials. Stores carry a limited assortment of SKUs, including prepared meals, fresh and packaged foods, packaged non-foods, health and beauty products, and gift items. Twenty percent of merchandise at Marketside is natural and organic, and it also touts a selection of fresh and locally grown food. The perimeter of the store supplies ready-to-eat meals and fresh made food items. This area is called “The Kitchen,” and former restaurant chefs offer a 50-item menu of proprietary Marketside Meals that range from simple side dishes to more gourmet offerings. All meal items are free of trans fats, artificial colors and artificial flavoring.

(Source: In-Store Marketing Institute.)

Affordable? Yes. Fresh?
Yes. Healthy? Yes. Small and easily navigated? Yes. Now that the biggest retailer in the world has admitted to everyone that bigger is not in fact always better – this winning combination just may be the new ‘it’ format for 2009. Stay tuned.

Photo Credits: In-Store Marketing Institute

— Contributed by Vanessa Munson

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