Thinking Small

Must Read

What happened to the so-called British invasion? You know the one where Tesco’s Fresh & Easy small-format food stores were going to sweep across America and turn the U.S. food retailing industry on its head. Fresh & Easy has been open well over a year now in California, Arizona and Nevada, with results – by just about any industry account or standard – less than stellar.

To be fair, none of us on the outside truly know what metrics Fresh & Easy uses to measure success. Maybe small-footprint retail doesn’t need to generate much volume to turn a modest profit for Tesco. What we can suggest, however, is that given our observations and learnings, this brand’s current retail experience and shopper draw pose little risk to others in the ever-more-competitive grocery marketplace.
More to the point, though, we reckon much of the analyst chatter generated by Fresh & Easy’s arrival on U.S. shores may have had as much to do with a looming battle between small-footprint retailers as it does the subject of (yet another) British invasion.
Convenience Store Redefined?
We have long predicted the rise and success of smaller-format stores competing effectively in the food and grocery arena. After years of unbridled “square foot” creep, smallerfootprint formats make a lot of sense on many levels. Besides the obvious benefits (i.e., small footprints are easier to navigate), reduced squarefootage also means it is much easier to guarantee a high-quality experience throughout. Likewise, an abridged set of well-chosen, higher-quality SKUs reduces shopper fatigue. Perhaps most importantly, smaller spaces promote greater intimacy, which leads to more immersive, compelling retail experiences.
Not surprisingly, the most successful small-store formats appear to be those that cast the retailer as a specialist rather than those that portray themselves as simply a smaller version of a more generalist grocery or mass retailer. In other words, consumers appear to be most receptive to smaller footprint retailers who manage to position themselves as experts at a particular task, category or subject matter.
To wit: Bristol Farms (gourmet specialty retail), Trader Joe’s (private label gourmet), the former Wild Oats and food co-ops (natural & organic), Dean & DeLuca (gourmet), Murray’s Cheeses (or a local cheese shop), the local florist, the local butcher and so forth. 
Yet, as the larger competitors are plotting their strategies for the looming small-footprint war, wefind a surprising lack of variation and focus among the entrants. Supervalu has announced its Urban Fresh format, which will focus on “fresh, prepared foods, ready-to-entrees and convenience items.” Wal- Mart describes its new small-format Marketside stores as designed toward “the needs of a time-starved, higherincome consumer that is interested in convenience and premium fresh, natural and organic offerings.” And not to be outdone, Safeway recently tipped its hat into the ring with The Market, which is described as “designed with a simple layout, so it’s easy to find what you’re looking for… The perfect place for your ‘fillin’ shopping or to grab a quick and delicious meal or snack.”     
Latest News

The evolution of kids’ luxury clothing in India

How kidswear in India has evolved from functional to fashionable and opulent By Swati Saraf The luxury kidswear market is growing...

More Articles Like This