Will a store-within-a-store work for deli?

Store-within-a-store concepts — featuring such brands as Starbucks, Sephora, Chobani and Samsung — have worked well for some big-name retailers. Now regional grocer Schnucks is trying out the model in a part of the store where you might not expect a third party — the deli. In November, Schnucks announced the opening of an in-store shop showcasing artisanal cured meats by local specialty meat producer Volpi Foods, according to St. Louis Today. The Volpi shop at the Schnucks in Des Peres, Missouri is located near the store's existing deli and features freshly sliced meats. The meat slicer is operated by Schnucks employees trained by Volpi staff, and customers purchasing products from the vendor check out at the Schnucks register. The store-within-a-store model has proven successful in a few notable cases. Best Buy, which struggled for some time as big box retail began to wane in popularity, boosted its appeal to customers and investors with a store-within-a-store strategy that, in giving floor space to manufacturers like Sony and Samsung, has been instrumental in the chain's turnaround. And popular makeup brand Sephora has all but kept J.C. Penney on the map with its store-within-a-store presence. Macy’s has partnered with Apple, Finish Line, Sunglass Hut and a number of designer brands on in-store shops. At the grocery level, in-stores shops aren’t common. As part of a distribution deal launched in 2008, Murray’s Cheese in-store shops now operate in more than 350 Kroger locations. Kroger acquired Murray’s Cheese last year. As part of the launch the concept, 365 by Whole Foods Market formed “Friends of 365” partnerships with largely local eateries that operate independently inside each store. For Schnucks, it’s not immediately obvious if customers would sooner shop for artisanal meats at a branded store-within-a-store as opposed to a regular store-operated deli. The in-store proximity of the Volpi shop to the Schnucks deli could cannibalize sales. But an increased interest in artisanal, local and "natural" products could drive customer traffic to the Volpi shop.

• Schnucks and Volpi to Bring New “Store-within-a-Store” Concept to Shoppers – Schnucks
• Schnucks adding Volpi 'store-within-a-store' in Des Peres – St. Louis Today
• Has Best Buy solved the Amazon riddle? – RetailWire
• Encouraging signs for department stores as holiday season kicks off – RetailWire
• Whole Foods rents out space to Friends in new 365 stores – RetailWire
• Friends|365 – 365 By Whole Foods