Giant Food expects big things from a new, mini-grocery store concept

Discussion
Rendering: Giant Food Stores
Oct 08, 2018
Tom Ryan

Giant Food Stores announced plans to introduce a mini-grocery concept for urban markets — Giant Heirloom Market. The first location in downtown Philadelphia will measure only 9,500-square-feet, less than a quarter of Giant’s average store size of 45,000.

In a statement, Giant said the concept is the result of over a year of neighborhood listening sessions and market research, with lessons borrowed from Amsterdam, “known for its innovative, small grocery stores.”

Giant Heirloom Market will play up “high-quality, fresh, seasonal, and flavor-focused foods and everyday essentials.” Features include a produce chef who will prepare veggies and fruit on demand, as well as a focus on local artisanal breads and other local food purveyors, a variety of plant-based foods, sampling and demonstrations.

The format will incorporate “endless aisle” technology.  The chain will provide associates with iPads so they can help customers order items online for Peapod-assisted pickup or delivery. Giant is planning several additional stores in Philadelphia.

A grocery store under 10,000-square-feet is rare. The average size of Trader Joe’s is now about 13,000-square-feet and Aldi’s average is 15,000. Kroger and Hy-Vee each have formats at 10,000-square-feet and under, but they operate more as convenience stores with fuel stations and some fresh food.

Publix is reportedly opening a smaller-format store in Longwood, FL supporting online ordering and delivery, as well as curbside pickup, but it will still measure around 30,000-square-feet.

Among other formats, Target has been aggressively expanding in urban centers with stores averaging between 20,000 to 40,000-square-feet. Meijer in August introduced a new format, Bridge Street Market, with a 37,000-square-feet location in Grand Rapids, MI, that’s likewise designed for urban markets.

DISCUSSION QUESTIONS: How do you see small format grocery stores such as the Giant Heirloom Market differentiating from convenience stores, bodegas, delis and other locations that serve consumers in urban areas? Will endless aisle technology and pickup/delivery options overcome any shortcomings of small format grocery stores?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"This is a very good future direction for many retailers. But it will need to rely on tightly analyzed product assortment data to ensure the smaller footprint is productive."
" Time is the new loyalty currency and the convenience of smaller store formats like Giant’s — and Amazon Go and others — have a great role to play. "
"Endless aisles seem to be code for few humans."

Join the Discussion!

23 Comments on "Giant Food expects big things from a new, mini-grocery store concept"


Sort by:   newest | oldest | most voted
Bob Amster
BrainTrust

The concept has a reasonable chance for success. The idea of endless aisle in grocery is questionable. When people go to markets now, they “need it now.” In addition to which home delivery in crowded urban markets is neither easy nor cheap to do.

Cathy Hotka
BrainTrust

There is a Trader Joe’s in the busy West End neighborhood here in DC that is packed with customers at all times. If Giant can stock a small store with fresh essentials in an urban area, they’ll probably experience the same success. I applaud the effort.

Neil Saunders
BrainTrust

If configured and merchandised correctly, smaller stores do not have shortcomings in terms of their limited range. The whole point is that they focus on immediate needs and quick buys, rather than making people walk around miles of aisles to get what they want.

Shopping habits have changed and continue to change. One of those changes is doing more smaller shops, including top-up shops. This format addresses that need and if it is executed properly it should do well.

Shep Hyken
BrainTrust

Urban areas don’t typically have the space to put a typical large grocery store. By putting a small store into an urban neighborhood it sends the message from Giant, “we care, and we want to do business with you!” One of the core convenience principles I write about is access. That means logistical access — as in a store that’s close by and geographically convenient.

Technology will play a part in these stores, as in any other grocery store. This is just a smaller version. Data will help determine what and how much to stock.

Mark Heckman
BrainTrust
With shoppers opting for increasingly more convenient options, smaller format stores make sense provided the retailer has done their homework in terms of variety, layout, solid store locations, and service offerings. From the report its does appear that they have studied the issues extensively before moving forward, however if Giant Heirloom Markets do not serve the vast majority of a shopper’s food needs for a majority of the shopper’s trips, success will be elusive. To that point, If the shopper is frustrated with not being able to find the items that comprise 70 to 80 percent of their routine shopping list in a convenient way this small format, like some that have fallen short before it, will not gain sufficient traction. I am intrigued by the notion of using trained personnel with iPads for extending the inventory, but question whether that process will be too troublesome for most to engage. I also question whether or not a footprint of only 9,500 square feet will suffice to house enough variety to be considered a viable shopping… Read more »
Dave Nixon
BrainTrust

For those who have limited time and are simply replenishing, this concept has a high chance of success. This is a very good future direction for many retailers. But it will need to rely on very tightly analyzed product assortment data to ensure the smaller footprint is productive. Also shouldn’t they have called it “Giant Jr. Foods?”

Frank Riso
BrainTrust

Most Americans go to the grocery store to buy product that is on the shelf. We are not expecting to order items for delivery or pick up later and that may be the downfall of the Giant Heirloom Market. They may survive as an upscale convenience store or a better competitor to the newer discount grocers but many ideas from Europe just seem to be a fad here. Instead of the endless aisle a better online ordering and pick up or delivery service would be better but Peapod does that already. I am surprised that they are testing the concept in Philly instead of DC where there is more need for inner city grocers.

W. Frank Dell II
BrainTrust

There is a place for a true small format store especially in cities as the answer to food desert. A small store should cover the categories not the selection of a traditional supermarket. Item selection is far more important and must be monitored closely. Think of endless aisle as the replacement for the monthly hypermarket/Walmart shop. Small format should be coupled with online order pick up to be economically viable, not home delivery. Properly designed store pickup and shop can be accomplished within a two-hour window.

Richard J. George, Ph.D.
BrainTrust

C-stores are moving more toward foodservice to the exclusion or minimization of grocery items. The Giant Heirloom market represents a real opportunity for c-store differentiation.
At the same time, Giant is recognizing that more meals are being consumed at home (80 percent today vs. 75 percent 10 years ago). In addition, how people prepare meals is changing. Consumers are looking for enhanced convenience, not just in shopping but also in preparation. Consumers are developing shortcuts by purchasing, for example, an already cooked rotisserie chicken, a pre-made side of potatoes from the deli, and adding a homemade fresh tossed salad. This combination equals a tasty, blended, time-saving meal, that the consumer gets credit for its preparation. So while Giant is looking for some differentiation in this new format, its success will depend on winning the foodservice battle. I also believe that Giant and other more traditional retailers are attempting to preempt Amazon’s plans to expand Amazon Go.

Rich Kizer
BrainTrust

After watching the video and rereading Tom’s comments, this sounds great. Not revolutionary or earth shaking, nor an implementation of new, undiscovered ideas. But it does make sense that they spoke to neighborhoods, they looked at current offerings and then they made a decision. I think the key here is to keep speaking with and involving the neighbors, and to have open eyes to constantly change as rapidly as necessary.

Ricardo Belmar
BrainTrust
Small grocery formats like this make sense in dense urban areas. With a focus on local needs, getting the selection right is critical. Giant’s focus on the technology is interesting and I suspect the scan and go reference in the promotional video is a preventive shot at Amazon Go. However, endless aisle in this format seems a bit out of place. If you’re shopping in one of these small-format stores, you probably want something “now” not delivered to you “later.” It’s also critical that the quality of the products be high in these formats, where there will be less tolerance for lower quality items in such a small space. I expect Giant may struggle here if they are anything like the Giant Food stores in our area which are neither value priced nor high quality as compared to most of their competitors. Their main advantage in our neighborhood is that they are in the neighborhood and all their competitors are a lengthier drive away. That said, most of my neighbors and I are willing to… Read more »
Herb Sorensen
BrainTrust

This new Giant store IS “the store of the future.” “Giant” retailers like Walmart, and everybody else, absolutely refuse to recognize that their cavernous stores are actually neighborhood pantries. The hard facts are that more shoppers walk out of a Walmart Supercenter with just TWO items than any other basket size. Three and ONE are the next most common basket sizes at Walmart. (For supermarkets, ONE ITEM baskets are the most common!)

However, as to their “endless aisle” technology, staff with tablets hardly seems serious. But at least it is an overt response to providing access to the other tens of thousands of items that make little sense in the “neighborhood pantry.” I’m betting on my patent pending “Long Tail Accelerator!” (20160247219 – INTERACTIVE TRANSACTION SYSTEM FOR PHYSICAL MERCHANT STORES. 😉 )

Sterling Hawkins
BrainTrust

I think the small format and deeper integration with technology is the right direction. Endless aisle and many other technologies are creating more experiences and more possibilities inside of a smaller, more efficient space. If anything, I think Giant could have done more with technology, including computer vision based checkout (which can work well in smaller formats), automated out of stock management and AR or responsive digital signage. That’s the differentiator from delis and other competition, how online and physical come together to create new customer experiences.

Phil Rubin
BrainTrust
7 days 7 hours ago

Time is the new loyalty currency and the convenience of smaller store formats like Giant’s — and Amazon Go and others — have a great role to play. In our own (rDialogue) proprietary research we’ve found that 83% of consumers say it’s very/extremely important that a brand makes their experience more convenient.

Cluttered “full-size” grocery store footprints with lengthier ingress and egress are not exactly time-saving, even though they carry significantly more SKUs. A smaller footprint neatly fills the gap and presents a great option in between bigger boxes and “endless aisle technology and pickup/delivery options”.

Mel Kleiman
BrainTrust

If you read every post and get to this one, Iit boils down to right location, right product, high quality, and fair pricing.
More and more consumers love small stores. They don’t need 20 variety or brands of mustard or pickles.

Cynthia Holcomb
BrainTrust

Curious about the name — “Heirloom Market”. Will there be heirloom produce? Keeping produce fresh is key.

Of late, likely due to low unemployment, I have noticed local grocery stores struggling to hire staff (Kroger) resulting in a dramatic reduction in produce quality (romaine trimmed to the point of non-existence, soggy cukes, etc.) and an “edge” replacing the previous friendly employee vibe. Endless aisles seem to be code for few humans. If this is a Giant test for a Giant small-format neighborhood store, friendly staff, fresh food will be the key. If not, Trader Joe here we come!

Ken Wyker
Guest
Everything about the concept sounds like a good fit for an urban store, particularly the focus on fresh foods, artisanal breads, local purveyors, produce chef, etc. With smart assortment, it can be a great place for fill-in trips or quick what’s for dinner trips in the neighborhood. My only question is the rationale for the “endless aisle'” iPad support. Giant clearly recognizes that some customers might be frustrated that some items they want are not offered. However, by trying to “solve” that problem in a public way through the iPad-carrying endless aisle associates, I think it only draws attention to the limited assortment. My preference would be to celebrate the limited assortment of the freshest items that are available just down the street whenever you need them. What makes this store so great is that all that other stuff is not available. They can still communicate the availability of Peapod as a resource for anything else you might need. In fact, a great way to encourage that might be to offer a small discount on… Read more »
Harley Feldman
BrainTrust

Giant Foods’ approach to small stores in urban settings with Giant Heirloom Market has a good chance of working. Their focus on fresh, seasonal and flavor-focused items should attract consumers who are busy, yet want high quality and fresh food. The convenience provided through endless aisle will overcome the problem with some items not being in the store. However, if the cost to deliver them is too high or the delay too long, it will not be a successful idea.

Craig Sundstrom
Guest

Although judging by the poll results it seems not to be an opinion shared by many, I’m not enthused by this seeming rush to “urban” groceries. Once one gets beyond the media hype about downtown “renaissances”, they’ll find the population really isn’t there to support everyone and their brother trying to do this, and trends like online delivery will worsen conditions long-term. Not that I have any great faith in online grocery, either, but I think whatever success it finds will likely be in wealthy, concentrated, carless neighborhoods — the very markets targeted here.

But I’ll wish them well. Hopefully some can find a win despite my misgivings.

Bill Friend
Guest

The key for these types of formats is assortment, convenience and fulfilment. Customers need to know the retailer understands them and their shopping behaviors, and the best way to accomplish that is having the right product at the right place and time. They also need to know the it will be as easy, if not easier, to shop there than online or at another brick and mortar while being priced similarly to those alternatives. This definitely takes a heavy effort, not only to line up the variables and conduct the analytics but to make sure the plan is consistently executed at the store level. Just throwing things at a wall to see what sticks won’t work.

Jeff Sward
Guest

I just spent over a year in Hangzhou, China and the several neighborhood grocery stores I frequented were all in the range of 4,000 – 6,000 square feet. High population density and high rents make retailers get efficient about space utilization real quick. And I could survive a long time on the assortments offered at these small stores.

Larger “supermarket” stores were always an option, bearing in mind I would be walking back with whatever I bought. Add endless aisle and pickup/delivery and smaller footprints make all the sense in the world.

Scott Norris
Guest

San Francisco’s Chinatown offers another great example of mini-markets covering the most frequent basics, receiving small deliveries frequently, with the freshest possible produce. No chain stores, just small business owners working regional and global supply chains – well worth a field trip for tasty insights!

Kai Clarke
BrainTrust

Beware Giant, what works in Amsterdam probably will not be successful in the U.S. This concept requires lots of personnel to make the endless aisle concept work, yet leaves many questions not fully answered, including how this will compete with the U.S. convenience store concept (which works very well). Also BOPIS, or some derivation of this, would seem to be a natural for small footprint store concepts, yet reinforcing their online presence does not seem to be a primary goal (rather a secondary one in this model).

wpDiscuz
Braintrust
"This is a very good future direction for many retailers. But it will need to rely on tightly analyzed product assortment data to ensure the smaller footprint is productive."
" Time is the new loyalty currency and the convenience of smaller store formats like Giant’s — and Amazon Go and others — have a great role to play. "
"Endless aisles seem to be code for few humans."

Take Our Instant Poll

How likely are smaller grocery store concepts such as Giant Heirloom Market to be successful in urban markets?

View Results

Loading ... Loading ...