Brief revisiting of small store grocery format stories: big companies continue to say "no"

For years I have been arguing that center cities, but by extension town centers and conurbations "in the suburbs" too, can be the location of successful smaller format grocery stores.

For example, see "Urban grocery shopping" (2006) and this 2008 op-ed, "Urban Safeway misses mark," from the Washington Business Journal.

I was quite heartened that Ahold Delhaize, the parent company of the DC-area Giant chain, which in my opinion had lost its edge ("Urban retail #4: how to prevent the coming failure of the DC region's Giant Supermarket chain," 2012) but now seems to be more on the ball, not only in pricing, but in upping its game on private label, had opened two different small store formats, Everything Fresh in Philadelphia, and bfresh in Boston.

And I was about to write a "revisiting stories" piece versus the 2012 Giant piece.

Good thing I didn't because a few weeks ago, the company announced they are junking their small store effort, merging it from a separate initiative into their Stop and Shop division ("Supermarket chain said to be dropping small Bfresh stores planned for Philly ," Philadelphia Inquirer; "Stop & Shop to rebrand bfresh chain, close 1 store," Boston Globe).

Separately, this week, Kroger announced that they won't be expanding their Main & Vine one-off "small format" store, which is based in Gig Harbor, a Seattle suburb ("Main & Vine in Gig Harbor closing in January," Tacoma News-Tribune).

The reality is that most large chains aren't set up to think too carefully about differentiated formats.  Kroger is a great example that I wrote about recently ("Problem solvers vs. possibility thinkers (and Kroger)"). 

Kroger has gobs of best practice initiatives spread out across their various divisions, stuff new to me that I keep finding out about, such as the Kroger Signature store, which like Kroger Fresh Fare, is about providing a high grade experience, but not quite to the level of a Wegman's, Market District, or Central Market. And recently, they announced they'll be adding a restaurant to a store ("Here's your first look at Kroger's new restaurant concept, Kitchen 1883," WCPO-TV), something that chains like Hy-Vee and Wegman's have been doing for awhile.

But imo, they aren't very good at systematically capturing and harvesting this best practice and building it in as standard operating procedure and transforming their operations, even though they are good at adding nonfood items to stores (Fred Meyer, Marketplace format) or having upper scale but not super duper supermarkets.

And so it makes sense that they aren't willing to commit to the creation and maintenance of a separate urban initiative.  I guess the company's failure to not buy the Marsh's downtown store in Indianapolis earlier this year that was an example of a differentiated center city store is another confirmation of this.

The one major exception is Giant-Eagle's Market District Express.  The only significant exception to this trend seems to be Market District, Giant-Eagle's upscale store group, which has opened up some significantly smaller stores, in various Ohio area markets ("Giant Eagle Market District Express opens in Bexley," Columbus Business First).  G-E also has a somewhat upscale convenience store chain, called GetGo, that better leverages its relationship to G-E than does Kroger's convenience store divisions to its supermarket divisions.

A potential exception.  Shoprite, the banner of the Wakefern supermarket business cooperative acquired the right to market the "Fresh Grocer" banner when the company running it joined the group ("Fresh Grocer Joins Wakefern Co-op," Supermarket News). 

Fresh Grocer is a small format urban grocery store in the Philadelphia area.  But it doesn't seem to have been used in a new location outside of the Philadelphia market since the acquisition of the brand, although one member of the cooperative, in addition to the original operators, have adopted the format for some of their new stores going forward (but they aren't small).

FWIW, About 10 years ago, Fresh Grocer was considering entering the DC market.