The Future of U.S. Grocery Retail: Smaller Stores

Whole Foods announces Whole Foods Market Daily Shop, following the trend of smaller stores in the grocery retail sector.
March 13, 2024
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Whole Foods Market Daily Shop

Last Monday, Whole Foods announced a quick-shop store format called Whole Foods Market Daily Shop. The new stores will be 7,000 to 14,000 square feet, considerably smaller than the average 40,000-square-foot Whole Foods Market store.

The decision by Whole Foods to open a quick-shop store format follows a growing trend in the U.S. grocery retail sector of smaller grocery stores. Target has more than 170 small-format stores, and Walmart has nearly 700 Neighborhood Markets, described as a smaller-footprint option for communities needing a pharmacy, groceries, and merchandise.

Why are major U.S. grocery retail players betting on smaller stores?

  • To expand reach in dense metropolitan areas
  • To place stores in more affluent areas, potentially increasing the average order value
  • To increase personalization

Notably, the smaller store format reduces the upfront investment cost and allows grocers to personalize their offerings to serve customers better. With real estate, construction, and labor costs increasing in high-traffic metropolitan areas, grocers continue to increase the number of smaller stores in their portfolio.

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