CINCINNATI - For half a century, big-box stores have operated successfully on the premise that bigger is better. Walmart led the way with its hugely profitable Supercenter format, gobbling up tracts of real estate in its quest to lead the market.

But a funny thing happened along the way. The big format has stopped working as well as market saturation increased, Advertising Age reports. Now, those retailers who expanded across the country in a super-size way are eyeing smaller formats as areas of growth potential.

Target, which has its Super Targets, has announced it will open smaller, grocery store size City Targets in urban areas, like New York, San Francisco and Seattle. Kohl??s will expand with 60,000-square-foot stores instead of its previous 90,000-square-foot model.

While Walmart continues to open Supercenters, the retailer also has plans to open more Neighborhood Markets, said Bill Simon, Walmart??s U.S. CEO. "Supercenters remain the best format to capture market share," he said. "And we remain committed to growing through new Supercenters, as well as smaller formats."

However, Supercenters have not brought in as much growth as smaller stores. "The Neighborhood Market format continues to deliver above-industry results, with approximately a 5% comp during the fourth quarter and positive traffic throughout the year," said Simon.

Some experts say that Walmart has seen that large-format stores are not the wave of the future. "Part of that is demographics, because you've got smaller families now with Generation Y who are more likely to live in urban areas and have more options to choose from. They can save time by shopping at smaller formats," said Leon Nicholas, director of retail insights for Kantar Retail.