Big Box Retailers Diverge Between Full Size and Small-Format Stores
Texas-based high-end grocery chain Whole Foods is joining the roster of big box retailers testing the market with a small-format store concept that will offer “grab-and-go meals and snacks, weekly grocery essentials, and last-minute ingredients to complete a meal.” Plans were recently announced for the opening of its first “quick shop” at 1175 Third Avenue on the Upper East Side of Manhattan this year, with future openings of the newly branded “Whole Foods Market Daily Shop” in other cities nationwide. Decisions were prompted by ongoing efforts to grow Whole Foods’ brick-and-mortar presence in markets, particularly dense cities where retail space is scarce, rents are at a premium, and the urban lifestyle is fast-paced. The new stores will range in size from 7,000 to 14,000 square feet, which represents a significantly smaller footprint than their typical 40,000-square-foot store.
In contrast, discount homeware retailer Target appears to be bucking the national trend, recently released news announced plans by the Minneapolis, MN-based chain to open more than 300 new stores, of which most will be full-sized brick-and-mortar locations. Currently operating a mix of small-format and full-size stores, the shift from a focus on small-format stores over the past several years comes as Target sees new opportunities for full-size stores in places where they haven’t competed in the past. Looking ahead, Target doesn’t intend to abandon the small-store format and plans to continue opening some in urban areas and near college campuses, recognizing that it’s great to have the multiple store format flexibility so that the right kind of build is done for the specific opportunity in a specific market. As of February 3, 2024, Target had “273 stores that were 170,000 or more square feet; 1,542 stores that were 50,000 to 169,999 square feet; and 141 stores that were 49,999 square feet or less.”