Why Grocers Are Opening ‘Convenience-Style’ Stores

Placer.ai says small format stores offer retailers three unique advantages.

April 15, 2024

Whole Foods is set to open its first in a new series of small-format grocery stores, similar to a bodega or corner market, in New York, reported Food & Wine.

Whole Foods Market Daily Shops will be about 7,000 to 14,000 square feet, depending on the location, compared to the approximately 40,000 square foot size of a typical suburban grocery store. Whole Foods Market Daily Shops will offer grab-and-go meals and snacks, weekly essentials and be a “quick, easy destination to pick up ingredients to complete a meal,” reported NACS Daily in March.

Trader Joe’s also launched its Trader Joe’s Pronto concept in Manhattan. It’s a 2,800-square-foot grab-and-go store that offers affordable ready-to-eat options such as sandwiches, salads and snacks.

According to a white paper from location analytics firm Placer.ai, small format stores such as the new Whole Foods locations or Trader Joe’s Pronto offer retailers three unique advantages:

  • Smaller shops mean more customers per square foot, a key factor in big cities where rents can be high.
  • Stores can tailor their merchandise to neighborhood demographics. For instance, Target—which has opened a flock of locations in college towns—carries candy, bottled water and snacks for students on the run at its small locations.
  • Small spaces encourage community engagement by including espresso bars, providing indoor and outdoor seating and hosting events.

Placer.ai also noted that smaller store footprints allow retailers to test new concepts and respond quickly to consumer demand.

“As the retail landscape continues to evolve, companies can use small-format stores to continue developing their brick-and-mortar channels, while adapting to shifting consumer behaviors,” Placer.ai said.

In January, Amazon, the parent company of Whole Foods, closed its last Amazon Fresh Pickup location.