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December 19

Small is the New Big for Grocery Store Layouts

In the world of grocery retail, bigger is not always better. Huge, sprawling floor plans replete with way too many options can make shopping seem more like a chore than it needs to. Customers have shown that they respond powerfully to convenience, with 46% of global consumers saying that it is a significant factor in their choice in grocery store.1 For the time-conscious Millennial shopper, the prospect of a time-consuming excursion through shelf after shelf is much less inviting than a focused experience that provides them with more of what they need—and less of what they don’t. 

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International Council of Shopping Centers (ICSC) research reported by Business Wire indicates that close to one out of every four Millennials shops for groceries three or more times per week, visiting 5.9 types of grocery store (above the average of 5.4).2 This shows that new and upcoming additions to the workforce value their time, even if it means multiple smaller shopping trips to different stores as compared to one larger trip. Stores able to adapt their layouts to provide a more focused, data-driven experience are those rewarded with business, especially Millennial shoppers. 

This trend has not gone unnoticed by larger corporations like Walmart, which introduced its Neighborhood Market format to accommodate the needs of a new breed of shopper. These stores exhibit the effectiveness of a smaller footprint, measuring at less than a quarter of the size of the Walmart Supercenter and carrying less than a third of the product selection.3 While obviously and dramatically smaller than the standard Walmart floor plan, this is also smaller than the average supermarket.4 

Customers are responding. Business Insider reports that the same-store sales growth in the Neighborhood Market stores is outpacing the sales growth for Walmart overall.5 This is also not exclusive to Walmart.

Nielsen reports that “In the eyes of global shoppers, small and simple is beautiful right now. While there is some growth for large stores, the real winners are mini markets, small supermarkets, and convenience stores.”

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Specifically, the Nielsen report states that year-over-year sales growth in convenience stores (+6%), small supermarkets (+5%), and traditional stores (+4%) was at least double that of large supermarkets (+2%) in 2016.

The challenge is reducing and tightening the store footprint and selection while still meeting customers’ needs. Market research tells us that healthy, organic options are in with consumers right now. Packaged, processed foods, meanwhile, are comparatively less popular and are also easier to ship online—fresh produce better enables brick-and-mortar stores to compete with online-only retailers. Store layouts should be focused on these key items which will promote conveince to customers and are a key advantage over online competitors. 

Building your store with market research to guide the selection and layout can help you to provide a more focused, more convenient experience that appeals to time-conscious shoppers in today’s market.

 

 

Sources
  1. Report: “The Future of Grocery: E-Commerce, Digital Technology and Changing Shopping Preferences Around the World.” The Nielsen Company. Apr. 2015. Web. 10 Nov. 2017.
  2. Article: “Consumers Continue to Choose Physical Over Digital for Groceries.” Business Wire. 11 Sep. 2017. Web. 8 Nov. 2017.
  3. Article: DeHaven, Kylie. “Four grocery trends to keep watching in 2017.” BRR Architecture, Inc. 30 Jun. 2017. Web. 8 Nov. 2017.
  4. Article: “Supermarket Facts.” Food Marketing Institute. 2017. Web. 10 Nov. 2017.
  5. Article: Bowman, Jeremy. “Walmart’s neighborhood market is crushing the competition.” Business Insider. Aug. 29 2016. Web. Nov. 16 2017.
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