Image Courtesy of NRF Big Show 2025 - Jason Dixson Photography
At the 2025 NRF Big Show, the CEOs of Morrisons and Sprouts Farmers Market discussed their pushes to open smaller stores, although each chain is doing so for different reasons.
Morrisons, the fifth-largest supermarket in the United Kingdom, last June announced plans to open 400 of its Morrisons Daily convenience stores, aiming to increase its number of small stores to 2,000 in 2025. The stores range from 2,500 square feet to 4,000 square feet.
At 2025 NRF, Rami Baitieh, Morrisons’ CEO, explained that it’s “harder to open big stores in big cities” and Morrisons is focused on urban centers, as around 80% of the UK population lives in urban areas.
A trend toward smaller households also supports C-stores that carry less product. Baitieh noted that 30% of UK consumers live on their own or are a couple without kids. Finally, the smaller stores support nearby online pickup in city centers. Baitieh said, “We need to get closer to the customer. That's why we push online. We push the app. We push the proximity.”
Jack Sinclair, CEO of Sprouts, said the Phoenix-based natural and organic grocer’s small-format push involves bigger stores at around 23,000 square feet, down from its traditional store size of around 32,000 square feet.
Sprouts doesn’t target city centers, but its smaller stores enable Sprout to open close to other popular retailers to benefit from their traffic. Sinclair stated, “We’re a complimentary retailer as opposed to a competitive retailer. We love to sit alongside anybody. There's nobody we don't want to be right next to because we feel that the offer that we have is so different, and that allows us to be in a position that we create proposition for the customer.”
The low-profile formats, according to Sinclair, can also offer a “differentiated format” experience than larger locations, including “allowing people to see all the way around the store.” Further, the smaller stores are “cheaper to build and cheaper to operate, so that allows you to make return back from the store faster.”
He said the smaller stores still carry a suitable assortment for customers’ daily needs.
In the grocery retail landscape, there’s been a notable shift from large stores to smaller formats that are more accessible to consumers. Grocery Doppio wrote, “Small format stores offer a unique advantage in providing a more personalized shopping experience. With a more limited product selection, they can target specific customer bases, whether it's health-conscious shoppers, urban dwellers, or those looking for affordable options.”
Among those recently experimenting with smaller grocery formats are Amazon, Whole Foods, Meijer, Wegman’s, Loblaw, and Hy-Vee.
Several grocers are experimenting with a variety of store sizes. H-E-B recently introduced Joe V's Smart Shop, a mini version of its H-E-B store, at the same time as it opened its largest store, at over 145,000 square feet, in Austin.
Costco is opening slightly larger stores. Meanwhile, Walmart last year began testing two Neighborhood Market locations that span 57,000 square feet of selling space, about 17,000 square feet larger than average to add wider aisles, a Health Services Room to their pharmacies, and additional pickup and delivery space. Publix last year also began experimenting with a larger prototype supporting additional hot food offerings, upstairs and outdoor seating, and a bar.