3 Big Reasons Grocers Get Small

Like many grocery operators, Giant Eagle is continuing to evolve with a constantly changing and diversifying landscape.

While already operating two Express stores, Giant Eagle is planning on opening a Market District Express – a cross between its Market District and Express concepts.

The continued migration of grocers toward smaller store footprints reflects an overall shift in the retail environment.

In fact, up to 300 larger store formats (50,000 – 70,000 square feet) are expected to close by year’s end, while an even greater number of smaller format stores (less than 40,000 square feet) will be opened.

So, why is this happening?

The combination of limited high-quality real estate for big box grocers to expand, and the increasing importance of convenience for shoppers, have caused grocery retailers to adapt and begin favoring smaller store concepts.

Below are 3 of the top reasons grocers are investing in smaller stores:

  1. Lower break-even point
  2. Expansion into new, untapped markets
  3. Increase customer loyalty by getting closer and more convenient to customers

So, what does ​that mean?

Both site selection and product mix are crucial as smaller format and express stores generally attract a local shopper. In order to maximize ROI, new stores need to be placed in a targeted trade area based on their core customer profiles and offer the products that those customers want.

So, how can customer analytics help grocers?

Customer analytics is helping grocers make a shift from their traditional real estate strategies to get bigger by getting smaller.

By identifying who the best customers are, where more customers can be found, and determining the value of these customers, grocers can hone in on where their opportunities for new stores are – literally on the map.

Real estate evaluation tools, including prediction and forecasting models, can be calibrated to account for a smaller store and a smaller trade area – so you know exactly where your opportunities are and what to expect in terms of performance and cannibalization to an existing store network.

Need Customer Data?

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