As consumers seek convenience and healthier food, competition is rising among food retailers to meet demand. Long dominated by Whole Foods’ higher-end stores and Trader Joe’s smaller shops and limited assortment, retailers such as Sprouts and Natural Grocer are quickly expanding with messages of affordability. Amid recent failures, such as Tesco’s Fresh and Easy and Delhaize’s Bottom Dollar, retailers are trying smaller, affordable and convenient concepts. The latter group includes Kroger, Ahold and Whole Foods.
Smaller grocery store success demands higher sales densities
Whole Foods, Kroger and Ahold are among food retailers introducing smaller, more limited-assortment stores that deliver convenience and affordability. Whole Foods’ 365, Kroger’s Main & Vine, and Ahold’s Bfresh concepts may need to quickly achieve high sales densities and gross profit per square foot to compete with the likes of Trader Joe’s. Kroger hasn’t yet reached the necessary return on investment for Ruler, a deep-discount, limited assortment concept meant to compete with Aldi and Save-A-Lot.
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