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Small is particularly beautiful for Wal-Mart
September 10, 2008
US supermarket chains are following their German and British counterparts in discovering the joys of small stores in cities. Both the New York Times and the FT have stories today about Wal-Mart and others following the example of Tesco’s neighbourhood stores.
There are good reasons why the neighbourhood grocery chain, which has been pioneered by Aldi’s US chain Trader Joe’s as well as Tesco’s Fresh & Easy chain in California, could pay off for US supermarkets.
As the Times article points out, there is an awful lot of pointless variety in the typical US supermarket, driven by the tendency of branded food companies to make 57 varieties of everything.
By eliminating a lot of the dead space on shelves, supermarkets can squeeze a pretty good selection of fresh produce and ready-to-cook meals into smaller stores. That attracts the urban crowd who want to pick up something on the way home from work.
None of this is new to a European shopper. Tesco Metro, Sainsbury’s Local, and Marks & Spencer Simply Food stores have proliferated on UK high streets.
But it has a particular resonance for Wal-Mart, which has been struggling to get into US cities including New York with big stores. Because these require planning permission, it has often been stymied by unions and local activists.
Wal-Mart’s small store Marketside chain stands a better chance of spreading into big cities because it is harder to block. Wal-Mart has been struggling to get one of its Supercenters into San Diego but is now opening a Marketside store north of the city.
I wonder how long it will take before Marketside comes to New York? If you can make it here, you can make it anywhere, you know.
