Honey, I Shrunk the Retailers

By 
Jackson Lewis, Assistant Editor

Moving to smaller format

CHICAGO -- In an age when just about everything consumers do generates trackable data, large-format retailers are scrambling to find the best store format to get more people through their doors.

The tests come as brick-and-mortar retailers see a gradual decline in traffic. Whether due to challenges from e-commerce or simply changing times, more retailers are turning to small-format stores, making the convenience industry the ace in school whose homework everyone wants to copy.

These big retailers aren’t just opening tiny stores and slapping their brand on it. For the most part, the large-format natives are mixing in a focus on fresh food and technology to draw customers.

Here's a look at four notable retailers that have gone small recently …

1. Kroger gets fresh

Kroger convenience store

Kroger’s CFO describes its Fresh Eats MKT concept as “a different kind of a convenience store.” The small store is being tested in Blacklick, Ohio, near Columbus, where Kroger’s c-stores under the Turkey Hill banner could potentially rebrand to Fresh Eats MKT units.

The nearly 12,000-square-foot c-store includes fuel pumps, a Starbucks, a drive-thru Kroger pharmacy and two Coke Freestyle machines. Its interior looks much like a modern grocery store; it carries produce, meat, dairy and wine and beer, in addition to bakery items, bulk nuts, mixes and candy.

This is by no means the first time Kroger has played with the c-store format. About 1,450 of Cincinnati-based Kroger’s supermarkets include fuel centers under a variety of banners. It also owns 785 convenience stores, also under a variety of names, and just last year Kroger opened the first c-store under the Kroger brand in College Station, Texas. Fresh Eats MKT represents a clear change in strategy. Only time will tell if Kroger sticks to it.

2. Wal-Mart experiments

Wal-Mart Fresh Story

Bentonville, Ark.-based Wal-Mart has more than a few small-format concepts under its belt, but the most recent iterations have shifted the focus to fresh food and technology. Wal-Mart has opened a temporary storefront in New York City to promote online grocery shopping through its e-commerce arm, Jet.com. The shop was placed inside Story, a retailer that changes its products, decor and events every month or so. Story will refer to itself as Fresh Story while it hosts Jet’s products for about six weeks.

Sumaiya Balbale, Jet’s vice president of marketing, told Business Insider that the store is meant to raise awareness around Jet’s grocery delivery service. It seems Wal-Mart is embracing the trend of shopping in a physical store and making purchases online, at least on a small, temporary scale.

Wal-Mart’s e-commerce pop-up emerges on the heels of its Wal-Mart Pickup With Fuel stores in Alabama and Colorado, which offer a drive-thru online pickup area attached to a standard c-store unit. The company is also testing a Supercenter in Tomball, Texas, that incorporates mobile scanning technology.

3. Target puts a store inside a store

Target

In October, Minneapolis-based Target plans to open a new kind of store in the Houston suburb of Richmond, Texas, along with 40 existing stores that will receive elements of the redesign. The new design will also influence the 500 stores Target plans to renovate in 2018 and 2019. Customers who want to get in and out of these new locations quickly will have the option of entering through a door that leads to an area laid out like a c-store.

The small-format space is slated to house a Starbucks, a wine and beer shop, and plenty of food options, including fresh produce, grab-and-go options and meal solutions. The reimagined space will also feature modern technology, such as self-checkout lanes and an online order pickup system that allows customers to either go inside or pick up orders from their car. Come fall, all Target team members will carry devices that can search inventory, take payment from a mobile point-of-sale system and arrange delivery from the sales floor of the entire store.

4. Sendik’s expands Fresh2GO

Sendik’s Fresh2GO

Milwaukee grocer Sendik’s recently opened its second Fresh2Go convenience store, an 11,000-square-foot unit in Greendale, Wis.

The smaller shop offers the same options as original Sendik’s grocery stores, just in a smaller format. There are plenty of foodservice options, including Sendik’s Fresh2Go signature deli with grilled-to-order paninis. The shop houses a hot bar, salad bar and olive bar, in addition to a range of grab-and-go meal and food options. The beer selection includes a line of craft beers produced by Sendik’s. Fresh2GO also carries a selection of produce and a wide variety of cheeses.

Sendik’s sells its own line of craft beers at its small-format locations alongside other beer, wine, liquor and packaged beverages. The store offers Mobil-branded gasoline and includes a merchandise selection. The grocer plans to open a third 17,000-square-foot location in Hales Corners, Wis., this spring.