Are smaller stores a big opportunity for supermarkets?
Becoming the latest of several grocers testing smaller formats, Publix is reportedly working on a 20,000-square-foot prototype to serve seaside communities and college towns.
The Orlando Business Journal, which broke the news, said the concept would also enable Publix to compete with niche stores such as Trader Joe’s and Walmart’s smaller formats. Publix, which declines to comment, has an average store size of 40,000 to 60,000 square feet.
Within the ranks of pint-sized grocers are successful limited-assortment grocers such as Trader Joe’s (average 10,000 square feet) and Aldi (averaging 15,000 square feet).
Among other grocers, Hy-Vee in April opened its fourth Mainstreet concept in Sioux City. At 14,000 square feet, the Sioux City location features a produce area with 70 feet of display, as well as a butcher shop and a 22-door freezer. It also includes a pharmacy and a cafe.
Mainstreet is portrayed as a mini-version of a Hy-Vee, which average 85,000 square feet. Tim Stupka, assistant vice president of operations for Hy-Vee’s northern region, told KTIV in Sioux City, "We have pretty much everything those stores have, but we don’t have as many varieties."
Late last year, Kroger began testing Turkey Hill Market, averaging 7,000 square feet, opening three stores in the Columbus area. The smaller store stocks staples like fresh produce, meats, dairy, as well as prepared, packaged and frozen foods. The concept is a bigger version of Kroger’s c-store-concept Turkey Hill Minit Markets, which averages 4,000 square feet. Kroger’s average store is 67,000 square feet.
"Shoppers want speed, they want fresh, they want convenience, and they want value," Craig Rosenblum, a partner at Willard Bishop told The Columbus Dispatch last November when the Turkey Hill Market tests started.
In the organic/fresh foods space, Sprouts stands out for its stores, which run from 20,000 to 27,500 square feet. Competitor Whole Foods’ locations average 38,000 square feet, although it opened a 21,500 square-foot location last year in Detroit.
In July, Target will open its first 20,000 square-foot TargetExpress in its hometown market of Minneapolis, near the University of Minnesota campus.
Walmart is testing a 2,500-square-foot c-store-concept called Walmart on Campus aimed at colleges, but its big push in the smaller-size range is Walmart Express (averaging 15,000 square feet) that combines a c-store and grocery. It plans to add 90 to 100 Walmart Express stores this year.
- Sources: Publix quietly working on smaller prototype store – Orlando Business Journal
- Hy-Vee opens neighborhood concept store – KTIV
- Hy-Vee prepares to open first Sioux City ‘Mainstreet’ store – Sioux City Journal
- What’s Next Step in Wal-Mart’s Small-Format Rollout Strategy? – CSP
- Target Tests Small Store for Urban Shoppers as Young People Pick Cities Over Suburbs – The New York Times (tiered sub.)
- Walmart to play small ball – RetailWire
- Target to test really small store – RetailWire
Should more traditional grocers be exploring smaller-format stores? Do traditional grocers have any advantages in opening mini-supermarkets over limited-assortment grocers and/or big box discounters?