Rendering: Meijer
Meijer thinks smaller (but not small) with its new grocery concept
Meijer is known as a pioneer of the supercenter concept where customers can get whatever they need in a single trip to a massive store. Now, however, the retailer is thinking a bit smaller with a new store concept focused on providing an easily navigated shopping experience focused on grocery.
The retailer plans to open two stores early next year in Michigan under the Meijer Grocery banner. Both stores will be located in the Detroit suburbs of Macomb and Lake Orion.
Meijer Grocery stores will range between 40,000 square feet and 75,000 square feet. Store customers can participate in the chain’s rewards program and will have access to the same services offered in store Meijer’s supercenters.
The new format stores are meant to facilitate weekly shopping trips as well as last-minute fill-in shopping and will feature the following departments:
- Fresh produce;
- Fresh meat/full-service deli;
- Bakery (with in-store cake decorators);
- Dry grocery;
- Pharmacy;
- Health and beauty care;
- Baby, pets and consumables;
- Card and party/floral.
The condensed set of offerings is missing many familiar non-grocery fixtures of Meijer superstores, such as toys, electronics, apparel and home/garden.
The average size of a standard Meijer (formerly MeijerThrifty Acres) store is between 150,000 square feet and 250,000 square feet, according to a recent article by the Belleville News-Democrat.
While the two Meijer Grocery stores represent the chain’s first attempt to open a smaller version of its superstore, this is not the first time that Meijer has experimented with a smaller store.
In 2018 and 2019, Meijer opened two small-format, “neighborhood market-style” stores in two Michigan cities — a store called Bridge Street Market in downtown Grand Rapids and one called Woodward Corner Market by Meijer in downtown Royal Oak. Both stores have a selection of local and artisanal products in addition to national brands.
The two earlier small-format stores came in an era when national chains such as Target were making similar moves, launching flexible-format stores to weave themselves into urban environments where big box stores would not fit.
Discussion Questions
DISCUSSION QUESTIONS: How do you envision Meijer using its new grocery concept in addition to its supercenters as it grows its store base? Will one concept or the other be the driving force behind Meijer’s future growth?
Poll
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These aren’t really small stores, they are just smaller than Meijer’s giant stores. Super-sized stores still have a role to play and will remain destinations, however it is good for Meijer to have the flexibility of different formats as this opens up more opportunities for physical expansion. In some cases, shoppers also prefer smaller stores as they are quicker to navigate and easier to browse. Really, it’s not either/or on store size: different formats are needed to cater to different missions and locations – which is why format flex is important!
The smaller concept store is a good move for Meijer. They have done the work in understanding their local customer and will now serve and delight them, meeting them where they live and work. Meijer has been targeting their local community and learning from them. This strategy will further inform their merchandising strategy and will most definitely drive growth.
Much like H-E-B, Meijer knows it can’t build the big boxes everywhere, so it tailors the store to the neighborhood. This will definitely be a plus as they expand outside their trade areas.
Meijer has been an innovation leader in retail for more than 40 years. More than being a local retailer, the loyalty to the Meijer brand is extremely strong. Attaching the Meijer name adds to the strength of the expansion. The current challenge with opening smaller stores is competing with traditional supermarkets. However they recognize speed and convenience is now a top-of-mind desire for the shopper.
Reading the Meijer press release, the Meijer Grocery stores will be 75,000-90,000 square feet — still a large footprint for a traditional grocery store. If you’ve shopped a Meijer supercenter (my closest store is 15 minutes away), you’ll be struck by the massive space and breadth of assortment devoted to both groceries and general merchandise. I’m speculating that groceries drive a majority of the store’s business, so this opens up a new location strategy without depending on the enormous footprint of the supercenters.
First, a geographic note. Lake Orion is about a 39 mile drive from Detroit. Part of the Metro area? Maybe. A suburb? That’s a stretch. Second, Meijer hasn’t used the Thrifty Acres name since 1986 when it was retired during the rebrand to “Meijer.” Third, these aren’t their first smaller stores. Last year the chain opened its 42,000 square foot Rivertown Market in Detroit, at the time its fourth smaller format store, joining locations in Royal Oak, Lansing, and Grand Rapids. Finally, a confession of bias. I love Meijer and learned much of what little I know about the food industry from talking to Fred Meijer back in my reporting days. Now to the questions. The new format is a cost effective way for Meijer to extend its brand into areas that can’t physically support a full-size Meijer unit. This could mean urban areas as we saw with Rivertown, or even suburban or exurban locations with zoning restrictions. As to whether or not we will see more of these stores or which format will drive growth that, I suspect, will depend entirely on performance. Meijer has tried – and folded – new store concepts before. It shut down its club format, for example, when it determined the format didn’t create added consumer value.
Meijer has always been a pioneer in store concepts, being the first mass merchant retailer. Although this new format is behind the path of its competition with trying smaller formats, they believe slow and steady will win the race and they continue to succeed. Retail is no longer one size fits all, and having alternative formats (as long as they are properly supported) keeps the chain fresh and customers excited.
With the aging of America, smaller footprint options allow shoppers to navigate a grocery store that is essentially the size of a traditional supermarket versus a supercenter. None of the formats are either/or. It’s a function of the target market, competitive offerings and the economics of each planned offering.
Meijer is thinking location, location, location … but in a different way. Smaller footprint, grocery concept stores will allow Meijer to build more stores, that reach more customers, in different areas, as a larger super store. Having both types of stores in different areas, especially urban areas where a super store just does not make sense, will give Meijer a better reach to their target markets. Combining these will be the key to Meijer’s growth, along with a strong online presence.
Meijer has made a logical move. Even Macy’s and Best Buy experimented with their store sizes and bagged positive results. So, it’s completely comprehensible that small-format stores are succeeding. Therefore, I think Meijer has hopped onto a major trend and will certainly succeed in creating its space.