Small Stores and Big Rewards
By George Anderson
The small produce store and local meat market are back in vogue and it’s the
stores that help put many of them out of business that are bringing them back.
Retail Traffic reports grocery chains such as Sainsbury are making the
move to smaller and, some might say, more personal stores as the availability
of suitable construction space shrinks.
Sainsbury’s Local store format combines the shopping convenience of a c/g-store
with the high-quality fruits, vegetables and fresh meats found in its larger
locations.
According to Retail Traffic, 11 of Sainsbury’s 20 best-performing stores are
Locals.
Moderator’s Comment: Is the UK experience applicable
to the US? What are your thoughts on the future of small grocery store formats
here?
Meredith Adler, an analyst with Lehman Brothers, told
Retail Traffic that the small store trend in England is unique to that situation
because it “is a function of the real estate market in the U.K., where real
estate is limited.”
Another analyst, Jason Whitmer of FTN Midwest Research,
says format changes are inevitable in the grocery industry “but none of this
(smaller stores) is really on the radar right now.”
We disagree with both Ms. Adler and Mr. Whitmer. There
are numerous examples of supermarket chains operating and testing c-store and
smaller format locations and, of course, there’s Neighborhood Markets.
[George
Anderson – Moderator]