It’s Not Your Grandma’s Supermarket – Or Is It?

The image of a dull, boxy, sterile supermarket is fading fast from America’s landscape. It’s being replaced with a new model—one that looks and feels different in just about every community. And that customization is completely intentional.

Like many retailers supermarkets are re-inventing themselves for customers that are more health-conscious, more tech-savvy, more ethnically diverse and more interested in fresh products that are locally grown.  And in many urban areas, supermarket retailers are choosing to think smaller, building or retrofitting markets that are 15,000 to 25,000 square feet or so versus the old model of 50,000 to 60,000 square feet. One reason for the downsizing is the fragmentation of the food dollar; today’s shopper can pick up grocery items like milk, bread, eggs and snacks at your local  drug store, or big box store. Another is the growing popularity of online grocery services like Peapod and Instacart, business models that don’t require actual shelf space.

But supermarkets are finding their way. New technologies such as GIS are enabling market management to drill down into the precise demographics of a particular community. With data on family size, age and ethnicity they can stock their shelves with the favorite food items and ingredients that will service the wants and needs of the local residents and shoppers. Depending on the neighborhood you’re visiting you might find more Halal items, more Indian curries or more Asian produce like bok choy.

Some things haven’t changed. When researching new sites, grocery chains still look for locations with ample  parking and a prime location at the corner of Main Street and Main Street in any given trade area.  But in urban areas where a “food desert” may exist and a new grocery store can thrive, easy access to public transportation can be just as important as abundant parking. For these new urban locations, the smaller store model fits in nicely. Metro Commercial recently helped the Save-A-Lot chain identify several new locations in Philadelphia; the new urban stores will average only about 17,000 square feet but they check all the boxes Save-A-Lot was looking for.

As an answer to an old, dated supermarket one developer in North Philadelphia converted the structure to a newer, smaller grocery model and built-out the remaining space to house a national Dollar Store chain and a full-service laundromat.  Re-purposing the old larger format supermarket building provided the neighborhood’s residents with additional retail options and  services.

Unlike apparel and other traditional retail categories, grocery is still a category that benefits from personal inspection and service at the point of sale. Although e-commerce sites can facilitate grocery shopping for busy families, the experience of thumping and inspecting  produce, fresh meats and  seafood , along with sampling new products and being lured to the bakery section by the aroma of fresh bread just can’t be duplicated on an iPad. Turns out that your grandmother and her corner grocer were ahead of their time.

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