Grocer creates a store-within-a-store for CBD products

Discussion
Photo: American Shaman
Sep 09, 2020
Matthew Stern

As cannabis has experienced medical and/or recreational legalization at the state level throughout much of the U.S., the non- or minimally-psychoactive cannabis-derived compound CBD has had a related boom in popularity, with enthusiasts touting its benefits as a supplement.

One regional grocer in Missouri decided not just to bring CBD to its shelves but to dedicate a whole store-within-a-store to the products, an arrangement it says is the first of its kind in a multi-store grocery chain.

Ball’s Price Chopper, a sub-banner of Ball’s Food Stores, opened the 500-square-foot store-within-a-store in August in its Kansas City location, according to Supermarket News. The store-within-a-store is operated by partner company American Shaman. The section features wood paneling décor to communicate a natural feel and provides two small stools in front of a counter where customers can sit to sample CBD products and discuss them with staff.

While fans and brands recommend CBD anecdotally as beneficial for a variety of conditions, the Food and Drug Administration has only approved the compound — in a prescription form — for the treatment of two medical conditions, both severe forms of epilepsy. Furthermore, while topical products containing CBD are legal, it remains illegal to market the product as a dietary supplement or food additive.

This has not stopped a huge number of products, from ingestible drops to flavored sodas containing CBD, from hitting grocery store shelves in numerous U.S. states.

Amid this confusing regulatory atmosphere, trade groups such as the National Grocers Association (NGA) have called for CBD to be regulated as a dietary supplement to provide clarification.

As CBD faces these challenges, its reliably intoxicating source — the cannabis plant — continues to pursue its own distinct path to legality and mainstream retail.

Some states have changed laws pertaining to legal cannabis use to allow for recreational use, and formerly medical-only dispensaries have retrofitted for non-medical customers. The bigger legal dispensaries have been vying to achieve national market dominance through creative differentiation.

For instance, Curealeaf, a dispensary chain now operating in 23 U.S. states, told RetailWire that it envisions itself creating a branded line of cannabis products comparable to traditional CPG products like Coca-Cola.

DISCUSSION QUESTIONS: Does giving the CBD category its own section make good business sense at this point in time for grocers and other retailers? Do you see this tactic as a pathway to bringing other cannabis-derived products into traditional retail store environments?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"If McDonald's and Starbucks store-within-a-store locations have trouble with grocery shoppers, how much chance has CBD got?"
"So far the segmentation is limited to health and beauty items, it will be interesting to see if dry grocery will do the same..."
"Makes complete sense to me for grocers to partner with CBD producers for co-selling, selection and education."

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5 Comments on "Grocer creates a store-within-a-store for CBD products"


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Richard Hernandez
BrainTrust

Micro-stores are not a new novelty in stores. In most retailers that I have seen, CBD is in it’s own section (within the HBC or Rx areas). So far the segmentation is limited to health and beauty items, it will be interesting to see if dry grocery will do the same (CBD Coke, CBD Oreos, etc.) or if CBD will remain on the drugstore side like nutritional shakes and protein bars.

Ben Ball
BrainTrust

The success of store-within-a-store is dependent on the breadth of appeal of the concept to the primary store’s shoppers. If McDonald’s and Starbucks store-within-a-store locations have trouble with grocery shoppers, how much chance has CBD got?

Craig Sundstrom
Guest

I would think calling attention to the products is the means of NOT bringing in anything else: it simply serves as a flashpoint for those that don’t like them (that someone would object to a cannabis infused hand-lotion illustrates a general problem of acceptance); and I don’t really agree with the logic of bringing together edible/consumable products with topical solutions and “medications” … we don’t put rubbing perfumes and brake fluid in the liquor section with the idea that they all contain alcohol.

Patricia Vekich Waldron
Staff

CBD is big business here in California. Makes complete sense to me for grocers to partner with CBD producers for co-selling, selection and education.

storewanderer
Guest
13 days 17 hours ago

If there is excess space in the store and this concept appears to be one that will generate more revenue from the space, and the store ownership is comfortable with prominently displaying this product type, I say, have at it.

And we will see how it works out.

Lots of “ifs.”

Ball runs Hen House format stores as well (quite upscale). It would be interesting to see how this department would go over in a Hen House. I do think it would cause quite the noise. I suspect Ball is smart enough to know not to even try it there.

wpDiscuz
Braintrust
"If McDonald's and Starbucks store-within-a-store locations have trouble with grocery shoppers, how much chance has CBD got?"
"So far the segmentation is limited to health and beauty items, it will be interesting to see if dry grocery will do the same..."
"Makes complete sense to me for grocers to partner with CBD producers for co-selling, selection and education."

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