Supermarkets

Among supermarkets, the “Big Thing” is all about getting small.

British supermarketer Tesco, the world’s third-largest retailer, appeared to take the United States by storm last year when it began plopping down 10,000-sq.-ft. Fresh & Easy convenience grocery stores in western cities. Loaded with prepared foods and private-label goods, these units were widely viewed as being the catalyst in transforming the American supermarket industry from big (or medium-sized) box operations to community food stores.

After an initial sprint, Tesco has taken a breather from opening more stores — and Wal-Mart has seized the opportunity to accelerate the launch of Marketside, a community grocery store of about 15,000 sq. ft. Featuring a kitchen and an eat-in food counter, Marketside will also make its maiden appearance in the West.

Among the traditional supermarket Power Players, only Safeway has actually built a smaller unit — The Market by Vons, a 15,000-sq.-ft. location in Long Beach, Calif. Kroger already operates 780 convenience stores, under several banners, including Kwik Stop, Loaf & Jug and Tom Thumb Food Stores, which would seem to give it all the tools necessary to open neighborhood groceries. Instead, the company appears to prefer concentrating resources on larger concepts like the Marketplace supercenter and more traditional Fresh Market stores.

SUPERVALU had opened a smaller-format store called Sunflower, but pulled the plug in the aftermath of its acquisition of a multitude of Albertsons locations. “The jury is still out on whether small-format food stores will meet shopper expectations and company return on investment objectives going forward,” writes Jennifer Halterman, author of the report Small Stores, Big Trend and a senior consultant with TNS Retail Forward.