Small-Format Food Retailing Memo: Wal-Mart Studying Second Small-Format Grocery Store Concept; Inside Marketside One Week Before the First Stores Open

The Blog Fresh & Easy Buzz, which covers and writes about Tesco's Fresh & Easy Neighborhood Market, small-format food and grocery retailing, and related topics and issues, has two stories today about Wal-Mart, Inc. and small-format food retailing.

The first piece reports on and details comments Wal-Mart, Inc. CEO Lee Scott made earlier this month at the 15th Annual Goldman Sachs Global Retailing Conference in New York City about a second (besides its small-format Marketside) small-format grocery store concept the retailer is studying.

You can read that story at the link here: "Special Report: Wal-Mart, Inc. Studying Second Small-Format Food and Grocery Store Concept; the 'Bodega' or Modern Version of the Corner Grocery Store."

The second piece from Fresh & Easy Buzz provides new information about Wal-Mart's Marketside grocery and fresh foods stores -- the first four of which will open on October 4 in Chandler, Gilbert, Mesa and Tempe, Arizona, in the Phoenix, Arizona Metropolitan market region -- offering a look inside Marketside prior to the stores opening in a week.

You can read that story here: "Wal-Mart Offers its Own 'Peek' Inside it's Small-Format Marketside As Part of A One-Week Countdown to the Stores' Oct. 4 Openings in Arizona."

The four Marketside stores (which we coined as "Small-Marts" in August, 2007) which are about 15,000 -to- 20,000 square feet will open in just one week.

The combination grocery, fresh and specialty foods stores -- which will feature basic groceries, natural, organic and specialty products, fresh baked goods, fresh produce and meats, craft beers, wines and spirits, and in-store prepared foods -- will herald a new era for Wal-Mart, one in which the world's largest retailer joins the prepared and natural/specialty foods categories in a major way.

The Marketside development also places Wal-Mart square in the center of the small-format food and grocery retailing revolution we've been talking about in Natural~Specialty Foods Memo since we first published the Blog in August, 2007, over a year ago.

The small-format food and grocery retailing revolution -- and small-format competition -- has just started. Stay tuned.

Small-Format Food Retailing Memo: Wal-Mart to Open Small-Format, 'Small-Mart' Marketside Stores in Arizona on October 4

From the Natural~Specialty Foods Memo Editor's Desk: Wal-Mart will open its four small-format grceory and fresh foods Marketside stores in Chandler, Gilbert Mesa and Tempe, Arizona in the Phoenix Metropolitan market on October 4, according to its marketside.com website and a report in the blog Fresh & Easy Buzz.

As our readers know, we've covered Wal-Mart's Marketside format ('Small-Mart's being a term we coined for the stores) development extensively, beginning in September of 2007.

The Arizona stores are the first for Marketside units for Wal-Mart. Wal-Mart thus far plans to open two Marketside stores in Southern California, one in San Diego and another in the nearby city of Oceanside, according to our sources. Wal-Mart has not publicly announced the two California locations.

Additionally, we've reported Wal-Mart has plans to open more Marketside stores in Arizona -- besides the first four opening in 11 days -- as well as doing the same in Southern California, along with opening some of the small-format grocery and fresh foods markets in Northern California, particularly in the San Francisco Bay Area. Also, Wal-Mart has looked at opening a Marketside store in the Reno area, in Northern Nevada.


Below is the report from Fresh & Easy Buzz. Natural~Specialty Foods Memo is working on an analysis piece regarding the Marketside stores opening on October 4. We hope to have it published soon.

From Fresh & Easy Buzz: Wednesday, September 24, 2008

Breaking News: Wal-Mart to Open its Four Marketside Food and Grocery Markets in the Phoeniz, AZ Metropolitan Region on October 4

As we've been reporting on Fresh & Easy Buzz for months, Wal-Mart, Inc. has planned an early Fall, 2008 opening of its small-format, combination grocery and in-store fresh, prepared foods Marketside stores in the Phoenix, Arizona Metropolitan region.

Wal-Mart has now announced and confirmed on its http://www.marketside.com/ website the specific date the four Marketside grocery markets will open in the Phoenix Metropolitan region cities of Gilbert, Mesa, Chandler and Tempe.

All four Marketside stores are set to Open on Saturday, October 4, just 11 days from today, according to the announcement on the Marketside website. [Click here to see the announcement (look in the right corner) on the website. Click here for maps showing the location of each store in the four Arizona cities.

Click here to read the rest of the story from Fresh & Easy Buzz.

[Editor's Note -- the photos: The photograph at the top is of the Wal-Mart Marketside store in Mesa, Arizona. The picture was taken in late August, 2008. The second photograph shows what the inside of a Marketside store looks like (at least a small portion of it). Additionally, the aprons the three clerks in the picture are wearing are the Marketside store employee uniforms. The photo is from the Marketside.com website.]

Small-Format Food Retailing Memo: Two Dozen Florida USA Shoppers Who've Been Waiting Two Years For An Aldi Store to Open Get Their Day On Thursday

For the two dozen shoppers who've been waiting for two years -- and regularly calling a newspaper reporter for update on the estimated date of arrival -- for small-format, no frills deep discount grocery chain Aldi USA to open its first store in the Tampa Bay region in Florida, the wait ends on Thursday.

Aldi, which operates about 850 stores throughout the Midwest, Mid-Atlantic region and parts of the eastern USA, opens its first store in Florida, in Clearwater, this Thursday. An additional eight Aldi markets also will open on the same dayin the region.

The timing seems right in the minds of a number of the area's shoppers, according to a piece in today's St. Petersburg Times newspaper.

The writer of the story, St. Petersburg Times' staff writer Mark Albright, says a Florida consumer named Johana Szokie "is one of two dozen ardent Aldi fans who have called me for two years to learn when their favorite little grocer finally makes landfall in the Tampa Bay area" in Florida, of which Clearwater is a part.

Those are two dozen very dedicated shoppers. The type any grocery chain would be proud to have.

And in the case of Ms. Szokie, she doesn't even live in Clearwater. However, she tells reporter Mark Albright she will be driving to the Aldi store when it opens in the city on Thursday morning.

Aldi USA, which is the Illinois-based U.S. division of German small-format deep discount grocery chain Aldi International, has big plans in Florida, which is one of the top five food and grocery sales markets in the U.S.

The company expects to open from 25 -to- 50 of the no frills, little deep discount markets in Florida by 2010, with many more coming after that.

Aldi also has built a distribution center in Florida to serve its stores in the region. A grocery chain doesn't do that unless it has big (or big-little in the case of Aldi stores) development plans in terms of having a high store count in a given market.

The St. Petersburg Times story offers a nice local angle on the Aldi stores set to open in parts of Florida on Thursday.

In addition to the excited shoppers, Florida's major supermarket chain's like Publix and Winn-Dixie are watching Aldi closely on their respective home turf.

In fact, you can bet both chains, along with nearly every other supermarket chain in the state, will have "undercover representatives" attending Thursday's Aldi store grand openings, along with those dozen excited shoppers and many others.

Read the St. Petersburg Times' story, "Wait's nearly over for Aldi fans," here

Resources:

To read past stories about Aldi in Natural~Specialty Foods Memo just click the links below:

>Aldi

>Aldi USA

>Aldi International

Small-Format Food Retailing Memo: This Independent Combines C-Store Convenience With Fresh Foods, Groceries and A Secret Weapon -- Lots of Beer

Small-Format Food Retailing Special Report

Another independent, entrepreneurial retailer has decided the small-format hybrid convenience-grocery format might just be the future of food and grocery retailing. And like all good independents, Navid Tony Hoomanrad, who recently opened his Hyde Park Market neighborhood-oriented grocery and convenience-style store at 4429 Duval Street in Austin, Texas has added his own niche element to the format.

Hyde Park Market features a combination of traditional convenience store items, along with fresh produce (including organics), upscale Boars Head brand deli items, a refrigerated case devoted to quality ready-to-eat prepared foods items like Green Cart brand sandwiches, a selection of basic, specialty and organic grocery products, non-foods including a selection of hardware items, and Tony Hoomanrad's secret merchandising weapon -- beer -- and lots of it.

The independent grocer's strategy for his Hyde Park Market was to create a neighborhood store that was neither a traditional convenience store or a typical neighborhood grocery store. His goal: Offer in a small-format what he calls a "one-stop shop for fresh foods and grocery products that rivals anything found in a much larger supermarket. On a limited assortment scale of course.

He also believed offering an incredible variety of beer brands and styles could serve as a unique point of differentiation for his store, along with giving it a reputation for offering something special from day one. It also helps that Austin is a major beer drinking town.

Grocer Hoomanrad says he met with each of his eight beer distributors, ultimately deciding to order every domestic and imported beer brand, variety and packaging option -- single beers, 6-packs, barrels, you name it -- each one of them offered.

The result: currently Hyde Park Market is offering 525 different types of beer -- from Budweiser and Miller to craft beers and imports. In fact, although the store has only been open for a short time, it's believed to offer the second-most varieties of beer for sale than any other store, of any other size, in the city of Austin.

And remember, Austin just happens to be home to two of the biggest and best upscale food retailers (headquartered in Texas), both major beer category players, in the United States: Whole Foods Market, Inc. and upscale HEB Central Market.

No minor beer sellers these two retailers are, especially at their respective flagship stores in Austin. According to a local beer distributor who's in a position to know, Whole Foods' top beer selling store in Austin has about 450 varieties of beer, while Central Market clocks-in at about 360 or so.

The distributor says the only-recently opened Hyde Park Market isn't the number on beer variety retailer in Austin...yet. But it's close. That honor goes to a specialty beverage retailer named Specs, which offers about 550 varieties of beer, he says.

But grocer Hoomanrad is only 25 varieties behind Specs, which has been around for much longer, for the honor of the retailer offering the most varieties of beer in beer-drinking Austin, Texas.

And since the beer distributor says Tony Hoomanrad asks his beer sales reps each time they're in the store if they've got in anything new that his store isn't carrying -- and usually orders whatever beer it is if they do -- we wouldn't be surprised if Hyde Park Market, one of the latest entrants into small-format hybrid grocery and convenience store retailing, very soon becomes the number one beer variety seller in all of Austin -- along with offering lots of fresh foods, groceries (including specialty and natural) and other grocery store products, along with a mix of traditional c-store items (including a fueling station outside), all blended into a hybrid formula in a small-format store.

Small-Format Food Retailing Memo: Giant Food Stores To Open its First Small-Format, Hybrid Convenience-Grocery Store: 'Giant To Go'

Carlisle, Pennsylvania-based Giant Food Stores (also known as Giant-Carlisle) is planning to join the small-format food and grocery retailing revolution in the U.S. with its first small-format, convenience-oriented grocery market, Natural~Specialty Foods Memo has learned.

Giant Food Stores, which is owned by the the Dutch supermarket company Royal Ahold just as its sister company, Landover, Maryland-based Giant Food is (the chains are operated separately though), plans to build its first Giant To Go combination convenience and grocery store, which will be 4,442 square feet, at a new retail development called Richmond square at the northwest corner of Fruitville Pike Road and route 722 in Landcaster, Pennsylvania.

The small-format hybrid convenience and grocery store will be the first of its kind for Giant Food Stores, which operates about 140 supermarkets under the Giant Food Stores, Martin's Food Markets and Foodsource banners in Pennsylvania, Maryland, Virginia and West Virgina. Royal Ahold owns chains that operate about 700 supermarkets in the U.S.

At 4,422 square feet, the Giant To Go market actually is in part what we define as a micro small-format food and grocery store (under 5,000 square feet), although because it will be part traditional c-store (which at 4,422 would be as large or larger than an average one) and part grocery store, we will call it small-format.

The c-store cum grocery store will feature fresh produce and meats, a deli which will include grab-and-go ready-to-eat and some ready-to-heat prepared foods, an in-store fresh bakery and an assortment of basic shelf-stable food and grocery items, along with some of the food and non-food products typically associated with traditional c-store merchandising.

The 4,422 square foot hybrid convenience and grocery store also will have an 8-pump gasoline fueling station outside.

A Giant Food Stores' spokesperson said the Giant To Go store is a prototype for the chain. If it's successful the company is likely to build more of the stores in its market regions.

Construction of the Giant to Go small-format combination convenience and grocery store at the Richmond Square retail development -- which is a "village -style" designed 30,000 square foot retail and residential mixed-use development featuring stores and offices on the ground level and apartments on top -- hasn't started yet.

However, the Giant Food Stores' spokesperson told Natural~Specialty Foods Memo plans call for construction to start soon, with a target opening date for the store by the end of the first quarter of 2009.

Other retail tenants in the new Richmond Square center will include a bank, two restaurants (Asian and Italian), a dry cleaners and a couple others, along with the office buildings, according to its developer.

The Richmond center is a part of a larger development at the location. That development includes single family homes as well as additional retail and office space.

Giant Food Stores' new Giant To Go combination convenience store-grocery store format fits into what we classify as the "hybrid grocery-convenience store format."

It's a cousin to but different than small-format grocers like Tesco's Fresh & Easy, Safeway's "The Market," Aldi, Sav-A-Lot, Wal-Mart's Marketside, Trader Joe's and Giant Eagle's Giant Eagle Express, for example. It's closet to Giant Eagle Express, which unlike the others listed above adopts some elements of traditional c-store merchandising in its concept. All of the formats listed above are convenience-oriented though, which is an element they too borrow from c-store retailing.

Giant To Go also is different than what we've termed the small-format "eco-convenience" or Econvenience hybrid convenience-grocery stores. These stores which we've written about --such as Green Spot and Conscious Convenience -- combine elements of c-store retailing and grocery retailing but also take major elements from natural products retailing, having a "green" or environmental focus to the stores.

Wawa food stores is a good example of a store we think Giant Foods' Giant To Go is likely to emulate in many ways. As we've written about, Wawa is a hybrid convenience and grocery market which puts a major merchandising emphasis on fresh foods -- produce and prepared foods particularly -- along with selling basic groceries and specialty items. The stores also have fueling stations and sell some traditional c-store items as well. Interestingly, Wawa is based in Pennsylvania just like Giant Foods Stores is.

Another example is Parker's Convenience Stores, which we wrote about earlier this week.

We simply call these chains -- Wawa, Parker's and a few others -- hybrid, upscale convenience and grocery markets or stores. This is where we think Giant to Go will fit in the small-format, convenience-oriented food and grocery retailing revolution happening in the U.S. and elsewhere globally.

Giant Food Stores has developed numerous upscale design and merchandising features for its Martin's Food Markets banner (and its newer Giant banner supermarkets), including attractive upscale-looking departments like produce, deli/prepared foods and bakery, along with top-quality natural-specialty foods, fresh meat, produce and prepared foods merchandiing programs. As a result, it can export this expertise to Giant to Go in whatever doses it thinks are appropriate.

Dutch Royal Ahold-owned Giant Food Stores of Carlisle, Pennsylvania is now joining the other participants in this revolution with its new Giant to Go format. It seems "GIANTS" are even going small (format). Stay tuned, as there will be many more new entrants to the party.

Small-Format Food Retailing Memo: First 'Urban Fresh by Jewel' Small-Format Food and Grocery Market Opens Today in Chicago's Lincoln Park Neighborhood

Small-Format Food Retailing Special Report

The Jewel-Osco supermarket chain, which is owned by Supervalu, Inc., the second-largest U.S.-based food and grocery retail and wholesale company, opened the first store (the interior of which is pictured above) of its small-format Urban Fresh by Jewel start up chain today at 1910 N. Clybourn Avenue in the Lincoln Park neighborhood in Chicago, Illinios USA.

The small-format market is fairly upscale in design. It features an assortment of basic, specialty, natural and organic grocery products, along with fresh meats and produce (including specialty and organic varieties), ready-to-eat and ready-to-heat prepared meals, side dishes and snacks, and gourmet sandwiches and baked goods, along with wine and beer, with an emphasis on specialty wines and craft beers.

The overall focus of the store, even though it carries everyday grocery brands and items, is towards the upscale and specialty, including an emphasis on natural and organic. But the store also is merchandised for shoppers to pick up everyday items offered at about the same price a larger supermarket offers them for.

Urban Fresh by Jewel joins the company of Tesco's Fresh & Easy, Safeway's "The Market," (its one the market by Vons store in Long Beach, California thus far) Giant Eagle's Giant Eagle Express and Wal-Mart's soon to open Marketside, which all have in common that they are small-format, convenience-oriented grocery markets offering a limited assortment of basic groceries, fresh foods like meats and produce, specialty-natural items and fresh, prepared foods.

According to a Natural~Specialty Foods Memo correspondent who visited the Urban Fresh by Jewel store today on its opening day, it's very similar in design and merchandising style to Safeway's "The Market" format.

At 16,000 square feet, Urban Fresh by Jewel also is about the same size as the the market by Vons, which is about 15,000 -to- 18,000 square feet.

Urban Fresh by Jewel also is similar in look and merchandising to Canada's small-format Urban Fresh markets, which are owned an operated by the Canada-based grocery chain Sobeys.

The Canadian Urban Fresh stores have been around for sometime, and it appears Supervalu's Jewell-Osco chain liked the name so much it borrowed it for its small-format start-up chain, which the retailer says it plans to use in a urban-oriented retailing strategy in Illinois and Indiana, where the chain is based and operates about 183 supermarkets.

Food and grocery items at the Urban Fresh by Jewel Chicago store are grouped into pods to make for quick pickings of salads and deli items, for example, according to Miguel Alba, a spokesman for Jewell-Osco. This is the very same merchandising format Safeway rolled out in its the market by Vons store in Long Beach, California, which opened in May of this year.

Safeway plans to open its "The Market" small-format stores on a selective basis throughout the U.S. whenever and wherever it makes sense, CEO Steve Burd told Natural~Specialty Foods Memo early this year.

Safeway Stores, Inc. owns the Dominicks chain based in Illinois, so it's possible we will see a the market by Dominicks doing small-format food retailing battle with Urban Fresh by Jewel, which would be interesting since both chain's formats are so similar in store design and merchandising, including both using the the pod-style displays.

Safeway Stores, Inc. plans to use "the market" as the first part of the name of all of its small-format grocery stores, adding the name of the particular banner it uses in a given market as the ending. Vons is Safeway's banner in Southern California and Southern Nevada, for example. It's Dominicks in Illinios, Safeway in other parts of the U.S., and so on.

Additionally Jewel-Osco's Chicago small-format market has 10 checkout lanes, six of which are self-service. Spokesman Alba says this is designed to appeal to the younger, high-income residents in the Lincoln Park neighborhood, who he said the chain thinks will like the option of having a mix of full-service and self-service checkout lanes. Since four of the ten lanes are still full-service, he says he believes the store is offering both options to shoppers. They can use either full-serve or self-checkout depending on their needs at the time.

Safeway's small-format "The Market" format also uses a mix of full-serve and self-serve checkout lanes.

Tesco's Fresh & Easy Neighborhood Market, the small-format start up chain which now has 82 stores in Southern California, Nevada and Arizona, offers only self-service checkout lanes in its stores, although store clerks will assist customers with checkout and bagging if asked by a shopper to do so.

Trader Joe's on the other hand, the pioneer small-format specialty grocer in the U.S., has stuck to having only full-service checkout lanes in its stores. Clerks bag a shoppers order as well as scan it out in TJ's markets.

Among the upscale, natural, specialty and organic products in the first Urban Fresh by Jewel small-format market are: whole bean gourmet, organic and fair trade coffee beans displayed along with in-store grinders for shoppers to use; specialty, natural and organic food and grocery items across all shelf-stable and perishable categories; gourmet prepared foods items like Lobster and Shrimp Rockefeller and Hazelnut and Currant-Baked Apples (alongside more everyday items like meatloaf and cheescake); and regular and craft beers, along with basic and premium wines (about 400 varieties total, according to Jewel-Osco).

But there's also a limited selection of everyday grocery brands and items, as we mentioned earlier. There's Campbell's canned and packaged soups in the soup section, Kellogs Corn Flakes and Lucky Charms in the cereal aisle, and Wish Bone salad dressing along with numerous gourmet and organic salad dressing brands in the dressings section, for example.

The store does flip-flop a number of things as part of its emphasis on specialty, natural and organic, while at the same time offering basic food and grocery items to the extent any retailer can do so in 16,000 square feet.

For example, instead of national brand candy like Hershey Bars and Snickers at the front checkout stands, which is prime real estate, the store merchandises premium and organic confections like Lindt chocolate bars, New Tree brand Organic candies and Newman's Own organic confection items there, along with Altiods and other specialty and organic mints and related items.

The new Jewel-Osco small-format store sits on the site where there once was another small-format store which was owned and operated by Supervalu, Inc. That store was one of the company's five Sunflower Markets, which was a format it created to experiment with going after the natural foods shopper in a smaller-format store with lower prices than established natural products retailers like Whole Foods Market, Inc.

Supervalu opened five of the stores, which by design were run rather independently by the Sunflower folks hired to do so by the grocery company. In 2007, SuperValu announced its was closing the stores (which it did early this year) and ending what it called its test market of the Sunflower Market natural foods retailing format. [This Sunflower Market isn't to be confused with Sunflower Farmers Market (SFM), which used to happen so much SuperValu-owned Sunflower Market put a link to SFM, which is alive, thriving and growing fast, on its website.

Many people have asked for the last year or so if and what would replace the Sunflower Market natural foods store format, if anything, for Supervalu. They now have their answer. It's likely one or more of the other four closed Sunflower Market natural foods stores will likely end-up as an Urban Fresh by Jewel combination basic grocery, specialty-natural and fresh, prepared foods markets. The five Sunflower Market stores were in Illinios and Indina, in primarily urban locations.

Resources: Learn More:

>The online review site yelp.com already has two reviews about the Chicago Urban Fresh by Jewel store, which just opened today. There likely will be more. You can view the reviews here.

Small-Format Food Retailing Memo: 'USA Today' to Open 'USA Today's' Travel Zone Convenience-Oriented Micro Small-Format Stores in Airports in America

Have you heard the joke going around that the newspaper business is SO bad in America (and it really is having serious problems) that USA Today, the newspaper with the largest circulation in the U.S., has decided to go into the convenience store business?

Well, it's not really a joke that's going around.

In fact, it's not a joke at all. We just made it up for an opening paragraph.

Gannet Company, which owns USA Today (the newspaper), today opened its first USA Today's Travel Zone micro small-format retail store inside the Detroit USA Metropolitan Wayne County Airport.

A second micro-small-format USA Today's Travel Zone store is to open before the end of the year in New York's LaGuardia Airport, along with not one but two stores opening in the Indianapolis, Indiana USA Airport in November of this year, according to Christy Hartsell, who is the director of brand licensing for USA Today. Additional stores are planned in other airports as well.

Hartsell says the airport stores will feature a wide variety of products, including beverages, snacks, candy, sundries, reading materials (lots of display space for USA Today the newspaper we expect), travel-related items and other related goods. The stores also will feature prepared foods items in the form of ready-to-eat grab-and-go-style snacks.

Here's how Ms. Hartsell describes the strategy behind the USA Today's Tavel Zone stores:

"USA Today is synonymous with travel and convenience. Therefore, "USA Today Travel Zone stores create a new opportunity for travelers to get the news and information they need when away from home."

Makes sense. USA Today (the newspaper) is synonymous with travel because it is everywhere travelers go. And it's synonymous with convenience because its editorial style is to feature shorter stories than most newspapers do, along with designing the paper and its website for quicker reading.

USA Today (the newspaper) won't actually operate the stores. Rather, Under a license agreement, HDS Retail, the world’s largest travel retailer with more than 4,000 stores in 18 countries, will operate the stores, says Ms. Hartsell.

She says USA Today wanted to create an extension of its brand and therefore decided the micro small-format convenience-oriented stores located in airports would make a good fit based on the USA Today brand image.

What we think

We certainly see numerous synergies between USA Today (the paper) and the stores, particularly with having them in airport locations.

Additionally, we think the stores offer numerous cross-marketing and merchandising opportunities with the newspaper -- both its online and print additions.

USA Today (the newspaper) has long associated itself with travel. The paper version is available all over America's airports, is left for free in front of the doors in most medium-range to higher-end hotels, and offers lots of content about travel and weather conditions for its readers, including business travelers.

The online edition is full of travel related content as well, along with being involved with numerous travel-related content providers and travel companies.

We think the combination of offering consumables, reading material and sundries, along with other goods, in the stores also is interesting. While numerous airport stores do this already, they don't have the potential tie-ins with a newspaper like USA Today (the store) has the potential to exploit via USA Today (the newspaper).

For example, ads for the micro small-format airport stores can be placed regularly in USA Today (both the paper and online editions), along with coupons for discounts (and introductory free) beverages and related items.

Promotions can be conducted as well using the paper as a marketing venue, especially the online version. For example, how about buy a beverage and snack at the store, get a free copy of USA Today (the paper) promotion to start. Ads and coupons placed in both the print and online editions.

The potential for good marketers is near endless really.

Of course, the success or failure of the stores will depend on executing the retailing fundamentals: location, merchandising and price, along with a few other key variables.

USA Today does have an experienced retail operations partner in HDS Retail North America.

We think it's an interesting development though. It also shows the differentiation and growing fragmentation of retailing in the U.S., particularly when it comes to consumables, even if just a few categories within the larger definition. In other words, consumables are increasingly -- in one form or another -- becoming an overall category that nearly every retail format is taking a bite out of, so to speak.

Be it Target selling perishable and shelf-stable food and grocery products in its discount stores, Cost Plus World market selling wines and craft beers (and specialty foods) in its import format stores along with furniture, or Home Depot selling beverages and some snack items in its big box home stores and Office Max doing the same in its office supply big boxes, there's a whole lot of consumables retailing going on -- and not just in food and grocery stores.

NSFM Editor's note: Please note we've coined a new term: micro small-format retailing. We checked extensively and haven't found it used by any other publications or others to date. If you've seen it used, send us a copy of the publication.

And, stay tuned, we've found some other examples of what we are calling micro small-format retailing, including food and grocery.

Our definition: Since small-format food food and grocery retailing generally is defined as stores from about 5,000 (very small-format) -to- 25,000 (high end) square feet. We define micro small-format in food and grocery retailing as about 5,000 square feet and below.

In other types of retail formats, such as drug stores, its all relative. For example, a 5,000 -to- 15,000 square foot drug store is considered average size today. Therefore a micro small-format drug store would be one less than say about 5,000 square feet in our analysis.

The USA Today travel-oriented airport convenience stores are considerably smaller than 5,000 square feet, by the way.

Small-Format Food Retailing Memo: A Professional Chef Turned Grocer Creates A 'Sub-Urban' Small-Format Fresh Foods and Grocery Store in Maryland USA

Small-Format Food Retailing Special Report

The U.S. economy may be going to hell in a handbasket (or perhaps shopping cart), with banking failure after banking failure, fast-rising unemployment, soaring food and gasoline prices and other assorted economic maladies, but even such tough times aren't stopping entrepreneurs from opening small-format food and grocery stores.

A case in point: Andre Cavallaro, the former executive chef at the popular Addies restaurant in Rockville, Maryland USA, recently opened a small-format food store, Sub*Urban Trading Company, in nearby Kensington, Maryland.

The food store, which is designed to look like a modern version of the old general store, takes a "green" positioning stance, offering organic fresh meats and produce, along with natural, organic and specialty food and grocery items, with a major emphasis on "locally-produced" products.

natural and specialty grocery items include oils, condiments, marinades, salad dressings and items in numerous other categories. Natural and specialty perishable items are sold in themarkets as well.

Here's what Katie R. from Kensington, Maryland recently had to say about the store in a review on the yelp.com review website:

"The best word I can think of to describe sub*urban trading co. is 'yum'. Then I guess I would use amazingly fresh, organic, and friendly.

But whether I am biting into a warm rustic blackberry tart made with the ripest blackberries for breakfast or a slice of wild mushroom and goat cheese tart for lunch, all I can think of is yum.

How lucky Kensington is to have this new gourmet carryout owned and run by the friendly and knowledge pair, Andre and Alison Cavallaro.

Not only are there fresh pastry items everyday, but produce, dairy, meat, fish, baking items, and a few choice cookbooks. The fresh meats look so inviting - some marinated with fresh herbs; some small portions cooked to go. Many items are supplied by local farmers so it is worth the drive."

Utilizing his experience as a chef, Cavallaro is making fresh, prepared foods a major part of the market, which opened in August. Each day the store features ready-to-eat in-store fresh, prepared food items -- four different selections for lunch and one offering each evening for dinner. All are chef-quality prepared meals made by Cavallaro.

A Natural~Specialty Foods Memo reader who recently talked with Cavallaro tells us the four main statements the small-format food store makes are -- environmentally-friendly, organic, fresh and local.

All paper products used at the store are recycled, all plastic products used in the foodservice operation are corn-based and biodegradable, and all of the fresh produce and meats sold in the store are organic and, when possible, locally sourced.

A central feature of the market are its fresh, prepared foods to go, sales of which our reader says seem to be picking up since the store opened a little over a month ago. Cavallaro hopes to become a destination venue, where shoppers will stop in after work and pick up dinner to take home from his daily rotating menu, along with visiting regularly for take-home or take back to the office lunches.

The market is designed to be a neighborhood store; a store locals will shop daily if possible in the European tradition. Although we doubt if the owner would mind customers from outside the neighborhood.

In fact, our reader says Cavallaro had a strong following when he was executive chef at the restaurant in Rockville, Maryland, saying she expects numerous take-out prepared foods customers will stop in from there and elsewhere once they learn about the small-format combination natural, specialty and fresh, prepared foods market.

For example, Heather C from Rockville, Maryland, another reviewer on yelp.com offers positive comments about the store's fresh, prepared foods, along with other aspects of the market:

"I absolutely LOVE LOVE LOVE this place!!!!!

I've been in a couple times since they've opened and have been so pleased with the atmosphere, the ambiance, the employees/owners, and obviously the products they sell.

The former chef of Addie's, Andre Cavallaro, and his mother Alison Cavallaro, run this "green" and organic minded market. They focus on all organic, sustainable, and local products. On top of all that, all of their bags, to go containers, cups, "plastic" silverware are made from either corn or recycled products and are all biodegradable!!!

I read Libby's response, and often times I shop at Safeway and organic eggs cost $4.99 and to tell you the truth, don't even know where they come from. So I'm happy to buy my eggs at Sub Urban.

I've been telling everyone I know about this place and highly recommend it to whoever reads this!! Check it out, you won't regret those awesome peach turnovers baked fresh every morning or those kick a** savory tarts!!! (I had the beet and goat cheese one the other day....OMG!)

As we often write about, small-format stores offer much opportunity in terms of geography -- they can be located in urban, suburban or rural area -- and format. Such stores can be more upscale natural-organic-specialty like Sub*Urban Trading Company, no frills, deep disconters like Aldi or Supervalu, Inc.'s Sav-A-Lot, or in-between markets like Tesco's Fresh & Easy Neighborhood Market, Wal-Mart's soon to open Marketside and the hundreds of independently-owned small-format food and grocery stores operated by individuals, family's and partnerships throughout the U.S.

Small-format food stores, because of their smaller size and lower cost to get started, also offer an opportunity to independent and entrepreneurs that otherwise would be unable to open a traditional size supermarket because of the expense of doing so. They also are the perfect fit for natural and specialty foods stores offering a specific focus like fresh, prepared foods.

We're seeing a revolution in the U.S., as we frequently write, in small-format food and grocery stores across all formats -- from hard discount -to- upscale organic, prepared foods and gourmet (or a combination of all those) -- despite the poor economy.

The good news is that if these stores can make it now, they can make it nearly anytime. Additionally, if they do make it now, the stores will be well positioned to thrive once the U.S. economy turns around. This is particularly true for natural and specialty foods'-oriented small-format food and grocery markets.

Small-Format Food Retailing Memo: Savannah, Georgia USA's Parker's Convenience Stores: Taking Hybrid Convenience-Grocery Retailing to Upscale Heights

Small-Format Food Retailing Special Report

From the Natural~Specialty Foods Memo Editor's Desk: On September 13, we wrote this piece, " Small-Format Food Retailing Memo: The 'Eco-Convenience' Hybrid Store Trend Continues to Emerge: 'Locali Conscious Convenience' to Open First Store," about what we've identified as an emerging trend in the convenience-oriented food and grocery retailing industry -- a retail format we call the eco-convenience or Econvenience store.

This format combines some of the traditional elements of convenience store retailing like limited assortments of basic grocery items, fueling stations and foodservice but takes things in a "green" direction, including taking on the format and merchandising elements of a mini natural foods store.

The eco-convenience format also features far more food and grocery products in general, especially healthy, natural and organic items, than the traditional convenience store does. It also doesn't generally offer tobacco products for sale, which are key sales generators in traditional convenience stores. Further, rather than selling basic beer and wine brands, the eco-convenience stores tend to go more upscale and specialty, offer some conventional products but putting an emphasis on craft beers and specialty wines.

The upscale hybrid convenience-grocery store

Long before the emergence of the eco-convenience store trend however -- as well as long before the emergence of hybrid small-format food and grocery stores like Tesco's Fresh & Easy Neighborhood Market, Giant Eagle Express, Safeway Stores' "The Market" format and Wal-Mart's Marketside, the first stores of which are set to open in a few weeks in four cities in the Phoenix, Arizona Metropolitan region -- their was, and continues to be, what we call the upscale hybrid convenience-grocery store.

This format is best typified by Pennsylvania-based Wawa, Inc., which operates about 400 upscale hybrid convenience-grocery stores in the eastern Unites States. Wawa stores offer fueling stations and tobacco products like traditional convenience stores do, along with offering a limited assortment of basic grocery items (Wawa's limited assortment is more extensive than the average C-store).

However, the retailer also sells fresh produce in its stores, including some organic produce, offers a limited selection of natural, organic and specialty food and grocery products, and puts a major emphasis on quality fresh, prepared foods (foodservice) rather than the typical "belly filler" fair the traditional convenience store sells. Premium coffees, quality fresh baked goods and other premium and specialty offerings are a part of the Wawa stores' merchandising mix.

Wawa also does all this in what is a far more upscale designed retail store than that of the traditional convenience store.

Wawa is a pioneer in this niche, having converted its stores to this more upscale hybrid convenience-grocery store format in the 1980's. It's continued to refine the approach, and in the case of many of its newest stores it's going even more upscale in design, look and merchandising.

Parkers Convenience Stores

Wawa isn't alone in pioneering this format. Another pioneer in upscale hybrid convenience-grocery store retailing is Savannah, Georgia-based Parker's Convenience Stores, which we've written about before in Natural~Specialty Foods Memo.

Parker's primary hybrid convenience-grocery store banner is Parker's Convenience Stores (interior pictured above), an upscale version of the traditional convenience store with elements of a specialty foods store tossed in the mix. Quality foodservice is a major emphasis in the stores.

Parker's takes an even more upscale specialty-gourmet retailing approach in one of its banners, Parker's Market Urban Gourmet store (pictured above), which if you've been to or seen interior pictures of Safeway's "the market by Vons" in Long Beach, California, looks similar in many ways.

Parker's opened its first Parker's Gourmet Market convenience-oriented grocery-convenience market in Savannah, Georgia long before Safeway created its "The Market" format. The first and currently only small-format Safeway-owned "The Market" format store opened in Long Beach in May of this year.

Today's edition of Convenience Store News has a well detailed and written piece about Parker's Convenience Stores. The article, written by Barbara Grondin Francella, discusses Parker's format philosophy, operations and future plans, among other things. The story fits into our current "Small-Format Food Retailing Special Report" theme. Therefore we are reprinting the piece about Parker's from today's Convenience Store News for our readers. Read it below:

Twice as Nice
By Barbara Grondin Francella
Convenience Store News
September 15, 2008

Greg Parker's philosophy about convenience marketing took root during his first retailing experience in 1975, when at age 21 he built a c-store in Midway, Ga. -- and installed expensive paneling on the walls and pricey carpet on the floors.

Customers, he said, would walk in and gasp, "Wow! What is this?"

"I knew nothing about retailing back then, but I knew people like to feel special," Parker related. "That has been the differentiating aspect of our company culture. In everything we do, we try to elevate the customer experience."

The flavor of that c-store with auto service bay, which Parker built as an offshoot of his father's small Amoco Oil distributorship, can be found in the upscale, foodservice-driven Parker's Convenience Stores today. Back then, the young entrepreneur equipped the store with a kitchen, where then-teenager Amy Lane, who is now Parker's chief operating officer, made hamburgers and fries, hot dogs, salads, sandwiches and full, made-to-order breakfasts.

"I didn't think it was so novel at the time," Parker recalled. "I just thought I'd need to create alternate profit centers."

After opening that first store in 1975, Parker didn't take a day off, including Christmas, for three and a half years. "I didn't have time to go see what others in the industry were doing. Now, if I hear of something great happening, I don't hesitate to hop on a plane and go visit."

Still, Parker knew instinctively that developing an outstanding experience for the customer was crucial. "When I was opening my fifth store, my brother said, 'You may be making this too nice for this town.' But I thought, 'You can never go wrong delivering more than people expect.'"

That strategy has worked very well for 33 years. Savannah, Ga.-based Parker Companies' 25 Parker's Convenience Stores; Parker's Market gourmet store; Parker Oil Co., a distributor of BP, Chevron and Parker's own Supron brand gasoline; three Spin City Laundromats; an Urban Attic self-storage facility and a real estate business, tallied more than $150 million in sales last year.

Parker's Convenience Stores, a mix of urban, suburban and rural sites each unique in look, offer standard convenience items and a not-so-standard menu of homemade Parker's Market-branded sweets, sandwiches and salads, some made in the store, others at a commissary store and delivered each day. Gourmet coffee, milk shakes, walk-in beer coolers, 79-cent Quench Zone fountain drinks with chewy ice and "the cheapest cigarette carton prices in town" are presented in an upscale environment."

We rationalize our portfolio of stores and spend when we think we need to," said Parker, who noted the company is very good about keeping its stores up to date.

"It's very important to reinvest in your best performers," he added. "You don't want to be just a harvester. There is a time to sow and a time to reap, and you need to be thoughtful when you are doing both. I have an intense desire to sharpen the saw."

Despite the tough economy, Parker has three new locations slated to open this year in Savannah and Blitchton, Ga., and Bluffton, S.C.

Parker appears to be one of the many c-store retailers looking to take advantage of business incentives included with the taxpayer rebates in the government's Economic Stimulus Act of 2008. A recent CSNews.com online poll found that 14 percent of retailers were already benefiting from the incentives and 36 percent were trying to find a way to take advantage of the incentives. Interestingly, despite a lot of publicity, 43 percent of retailers said they were not even aware of the business incentives in the rebate program.

"The Bush 'stimulus package' -- and I try not to laugh when I say that -- gives us a 50-percent bonus depreciation," Parker noted. Assets that would typically depreciate over five years, at 20 percent per year, may now, for example, be depreciated at a rate of 50 percent in the first year, with the other 50 percent spread evenly over the five years, giving retailers a 60-percent depreciation rate in the first year.

"If you build something now, you'll pay little if any taxes on it the first year. Because your tax estimates are based on the previous year," he noted. "The next year, your required tax estimates will also be lower. Plus, if you have a strong balance sheet, money is cheap now. Building costs are coming down, land costs are coming down and unemployment is up, so labor costs are coming down. It is a great time to build."

New Parker's Convenience Stores measure 4,400 square feet. Upscale in appearance, they feature tiled floors and walls, have an extensive foodservice lineup, "and outrageously nice restrooms," Parker said. Outside, eight multi-product dispensers offer Supron motor fuels.

"Our brand starts with the architecture, which I believe is our greatest art form," Parker explained. "We outspend our competition when it comes to building our stores in terms of materials, design, lighting and landscaping. We spend between $2 million and $2.5 million per location, not including the land cost."

Parker also typically outspends other retailers outside the store. Parker's Convenience Stores have won a number of landscaping awards, unusual in the convenience business. Parker, who studied botany in college, personally selects a new site's planting materials, sometimes opting for three times as much as called for by the landscape designer.

He recently prevailed in a very public, heated exchange with a local planning commission, which wanted him to remove a 300-year-old tree on a piece of property that will hold a new store soon. The community backed him in his efforts to save the tree.

Lush landscaping aside, each convenience store looks different, although Parker is giving them a few common elements now, with a specific look for all the urban stores, the suburban stores and the rural locations. For instance, all rural stores will have low-country architecture, wood siding and metal latticework over the entrance.

If Parker sees something he likes, he'll incorporate it into a store. One unit, for example, features cutouts of people hanging at angles from the ceiling rafters. They are the work of an actor/student, who was learning set design at the Savannah College of Art Design while working part time at one of the stores. One figure holds a hot dog; another is shooting ketchup across the room to go on the wiener.

Parker recently completed a $500,000 upgrade of Parker's Market. (For more on Parker's Market, see "Parker's Market: Convenience Meets Gourmet," at www.csnews.com.)"

Before this, my wife and I did all the design work in that store," he said. "But we went to the opening of a new restaurant and loved the design and hired the designer [Joel Snayd, of Re:think Design Studio] that night. We do most ourselves, but solicit many opinions."

The new design opened up the floor plan by relocating a gourmet coffee center, which had split the store in two, and added a crowd-pleasing mix of materials and elements, including granite countertops, custom lighting fixtures, blackboards for signage and a wine display area using reclaimed wood and old iron piping.

"I can't build anything cost effective," Parker laughed. "I always overspend. I love being creative and artistic, and I'm as passionate about architecture as I am about c-stores. Everything we do, I want people to think, 'Wow.'"

Many Happy Returns

Whether he's overspending or not, Parker is getting a return on that investment. Parker's Convenience Stores rank consistently in the top quartile of all industry performance measures, and Parker's Market rings up millions in sales each year.

The retailer credits these results to a disciplined approach to controlling expenses and a keen focus on gross profit dollars.

"We have the lowest cents-per-gallon break-even point of anyone I know in the industry," he said. "We really pay attention to the details, and we train our people before they step into the store so we don't suffer as many mistakes. It helps to reduce turnover too."

The company pays higher-than-industry-average salaries, offering bonuses for catching honest mistakes ($10); catching and prosecuting shoplifters ($50); turning in a co-worker for stealing ($500); and recruiting another employee who stays one year ($500). Managers' bonuses equal up to 21 percent of their quarterly salaries. Additionally, a six-month bonus of $1 per hour worked is offered as an incentive to keep new employees.

Parker's benefit package includes health and dental insurance and a medical pre-tax spending plan, life insurance, 401K, paid vacation and a YMCA membership.

Parker relies on state-of-the-art retail technology, including Dresser Wayne's InSite and PDI's Enterprise, Focal Point, Applicant and Virtual University software, to keep firm tabs on inventory, each SKU's profitability and human resource functions. Products are scanned into inventory and at sale; Parker's team makes assortment and space allocations based on that data. "We analyze our baskets," he said. "We understand there are five traffic-generating areas of the store -- checkout, fountain and frozen carbonated beverages, cold vault, beer caves and coffee counter -- and we focus on having the right products in the path of the consumer to increase the opportunity for adjacency sales."

Brandon Hofmann, our marketing manager, is the best in the industry, and he has us focused on gross margin dollar contribution," said Parker.

He also said he is "constantly preaching" about gross dollar margin (GDM) contribution. "We can see what the top GDM contributors are by item and understand the importance of space-to-sales ratios for planograms," he noted. "But the real issue is space-to-GDM contribution."

For example, he regularly uses GDM contribution to rationalize products in the cooler. "We ask ourselves where high-dollar margin products are in the cooler door. Are they at eye level? In door 1? Door 2?"

You'll never find the words "loss leader" in any of Parker's marketing plans. "Why would anyone want to lose money on something? We position ourselves as a low-cost provider in fountain drinks, but it's still about growing the category and having the most pennies in the bottom line. We have the lowest cost on cigarette cartons. Our pack prices are not the lowest, but our three-pack special is."

Outside the box, all new stores sell Parker's Supron brand gasoline. If a c-store operator goes to market with beautiful stores at superior locations, customers don't care if he is selling a major gasoline brand, he said. "When you look at the top performers in the country, including Wawa, Sheetz, QuikTrip and others, very few are selling branded gasoline."

In 2001, when he created Supron, Parker wanted it to feel "like a major brand." Customers' initially reacted to it with curiosity. "We did radio and TV, billboard and bus advertising, and the consumer got familiar with the brand," Parker said.

Small-Format Food Retailing Memo: Not Technically 'Small-Format' But Whole Foods Market, Inc. is Going 'Smaller'

Small-Format Food Retailing Special Report

Amid a sluggish economy and slowing sales growth, Whole Foods Market Inc. is scaling down the size of new stores as the company finds massive grocery stores in most markets can't be justified.

The Austin, Texas, natural and organic grocer now plans to target new stores sized between 35,000 -to- 50,000 square feet, more than 20% smaller than what the company identified a year ago as its "sweet spot" amid successes with some large locations. The company is also renegotiating leases at several stores for smaller spaces than originally signed.

The size reduction by Whole Foods doesn't now make it a charter member of what we've coined as the small-format food retailing revolution going on in the USA. Instead it puts Whole Foods' stores right about in the middle in terms of the current average size of new supermarkets being built in the U.S.

For example, supermarket chains such as Safeway Stores, SuperValu, Inc., Kroger and most others are building new supermarkets that average about 45,000 -to- 60,000 square feet on the one end. Others such as regional players Wegmans (eastern U.S.) and HEB (Texas) have been building mega-supermarkets of about 100,000 square feet, at the other end. Then you have the small-format stores from Tesco (Fresh & Easy), Safeway (The Market) and Wal-Mart's soon to open Marketside, all which average from 10,000 -to- 20,000 square feet.

At its new "sweet spot" of 35,000 -to- 50,000 square foot stores, Whole Foods actually returns to its roots of the 1990's, when that was the size stores the natural grocer was focusing on. In the late 1990's to the present, Whole Foods went mega, opening numerous stores in the 70,000 -to- nearly 80,000 square foot range.

Smaller stores come with a host of lower fixed costs for rents and utilities, and also require fewer employees to run. That can help bolster key profitability metrics like sales-per-square-foot and sales-per-employee and improve the company's return on invested capital.

The smaller format was on display last week when Whole Foods opened its latest location in Richmond, Va. With 45,000 square feet of selling space, the store is smaller than most new ones open in recent years. But the store has mostly the same merchandise as larger stores, which should equate to comparable sales at lower costs.

It was also without any sit-down eateries that have driven up development and operating costs at some other stores. A Whole Foods in Fairfax, Va., for example, has four in-house restaurants including a barbecue joint called the Smokehouse.

The smaller Richmond store, meanwhile, has barbecue dishes available for self- service in addition to a hot food and salad bar, brick-oven pizza and a wine bar and cafe.

The moves for smaller locations come as Whole Foods is exhibiting signs that even the wealthiest consumers are cutting back on their consumption. Same-store sales rose just 2.6% at Whole Foods locations open at least a year, a far cry from the double-digit gains the food retailer enjoyed just a few years back.

Strong sales growth led to seemingly unmitigated growth by the chain, and store sizes followed suit. In 2005, Whole Foods opened its largest location, an 80,000-square-foot store in its Austin backyard that the company calls " enormously successful," and started to steadily increase the size of new locations.

But those larger format stores failed to live up to the performance of its Austin location and those in other dense, urban environments like New York. "

To be sure, Whole Foods, whose 270 stores average roughly 35,500 square feet, has continued to sign leases and open locations similar to its traditional layout and size. But the consumer spending slump has caused the company to rethink its development strategy, and retrench to store sizes from the past.

"With hindsight, reflection and some data points in front of us, we see that the really large stores are very powerful in limited markets and circumstances, and that smaller stores can also produce great returns for us," Chief Executive John Mackey said in an earnings call with food retailing analysts and media last month.

The real estate strategy is one of several moves Whole Foods is using to get back on track after its shares have lost more than half their value this year. The company has recently tried to emphasize value by offering more discounts and incorporating a value message into its marketing.

It is also planning on cutting back on new stores altogether, lowering its fiscal 2009 target to 15 new stores, down from a prior estimate of 25 to 30, as we reported previously.

Whole Foods also recently fired 42 headquarters employees as a cost savings measure.

As we've reported previously in Natural~Specialty Foods Memo, Whole Foods has had plans to open the first of its small-format Whole Foods Express concept stores in a former Wild Oats natural foods store building in Boulder, Colorado.

Initial plans called for that first Whole Foods Express store--which is designed to average 15,000 -to- 20,000 square feet and offer a limited assortment of natural and organic grocery items and feature fresh foods, such as produce and ready-to-eat and ready-to-heat prepared foods--to open this fall. However, as we previously reported, Whole Foods has been unable to agree on a new lease with the building's landlord at the Boulder site, which currently is still being operated as a Wild Oats banner store, so it has yet to start converting the building into the Whole Foods Express prototype store.

In fact, Natural~Specialty Foods Memo has now learned the Whole Foods Express concept is under review, as nearly everything at Whole Foods is, because of the supernatural grocer's significant drop in profits in the last quarter, which has resulted in the new strategies discussed in this piece, along with others.

Building and operating smaller stores isn't anything new for Whole Foods. In fact one of the chain's best-performing stores from a sales per-square-foot perspective is it 14,000 square foot store at 414 Miller Avenue in Mill Valley, in Marin County in the San Francisco Bay Area. That store averages between $500,000 -to-$600,000 a week in gross sales, according to sources in a position to know.

The Mill Valley store is where Whole Foods' co-president Walter Robb got his start. He opened the store in the early 1990's as the store manager, using his success with the Mill Valley store to move on to President of the Northern California Division and then eventually into his current position.

Additionally, the majority of the stores Wild Oats stores Whole Foods acquired in the merger last year are no bigger than 35,000 square feet, many being much smaller than that.

Whole Foods currently has plans to build some new stores even smaller than its new "sweet spot" size of between 35,000 -to- 50,000 square feet. These include two stores in San Francisco, one in the city's Noe Valley neighborhood and the other in the famous Haight-Ashbury district. Both of these stores are in the 17,000 -to- 20,000 square foot range. Another new store in development in Capitola, which is in Northern California's coastal region, also is smaller than 30,000 square feet.

We generally define a small-format food store as from 10,000 -to- 20,000 square feet in size, as do most others. The two San Francisco Whole Foods stores in development listed above fit that small-format definition. The Capitola store comes very close.

These however aren't specifically designed small-format stores like the Whole Foods Express prototype is. Therefore, it's our analysis that Whole Foods should move forward with its Express format.

If it can't open the first store in Boulder because of the lease problems that's fine. There still are numerous places where it makes even better sense to open one of the stores, particularly in an urban location where such a store makes much more sense for Whole Foods than it does to do so in Boulder, where the decision to do so was based largely on the fact that after acquiring Boulder-based Wild Oats, Whole Foods found itself overstored in the city of Boulder.

However, it pledged not to close any of the stores in the city that was home to Wild Oats. Therefore the natural grocer decided to turn one of the former Wild Oats stores into the Whole Foods Express as a way to differentiate the Whole Foods brand in the now overstored city.

We suggest opening a Whole Foods Express store in San Francisco or New York as a first test. It makes good sense to do from numerous perspectives, including geography, density, cost, maximization of sales per-square-feet, and more.

Feel free to agree, disagree and offer your perspective by clicking the comment link below.

Small-Format Food Retailing Memo: The 'Eco-Convenience' Hybrid Store Trend Continues to Emerge: 'Locali Conscious Convenience' to Open First Store

Small-Format Food Retailing Special Report

A new small-format, hybrid grocery and convenience-oriented store is coming to Hollywood, California. And the company hopes to create a regional chain of the stores throughout Southern California.

Locali Conscious Convenience, which is currently under construction, is set to open its doors this fall. The market, located at 5825 Franklin Avenue in Hollywood, seeks to make healthy eating and eco-friendly household necessities easily accessible to those on the go, says CEO Greg Horos. Roughly translated from Italian, locali means "community" or "where it's happening. "

According to CEO Horos, the small-format, environmentally-focused hybrid grocery and convenience market "will be a hip version of the mom and pop corner store. Locali will also be a place for people in the community to connect with each other and their food sources. There will be an emphasis on local and organic food artisans, producers and growers in the inventory line up. However, refined sugar, hydrogenated oils, high fructose corn syrup and genetically modified products will be missing from the shelves," he says.

"I like to describe it as the sustainable version of 7-11," Horos says. "We’ll have healthy and eco-friendly versions of the all the typical things you’d find at a convenience market…with the exception of cigarettes and lotto tickets…No clean versions of those," he added.

"We’re building (the store) to LEED (strict green building guidelines) standards and working with the city of Los Angeles to make sure we can supersede those standards as much as possible. We have a lot of terrific value adds for the community. I’m most excited that we’re offering exclusively organic and biodynamic wines and beers, too."

Besides the energy efficient building measures and appliances, Locali Conscious Convenience will also provide for the disposal of compost, in addition to recycling waste. A percentage of their proceeds will benefit a variety of local and international charities geared towards improving overall wellness, according to Melissa Rosen, a company spokesperson. The retail space is being designed by Los Angeles-based MASS Architecture & Design, Ms. Rosen says.

"Locali conveniently connects the community to eco-friendly food, beverage and lifestyle products. By providing easy access to socially and environmentally responsible goods, Locali promotes conscious consumerism and healthy living," Ms. Rosen says.

Locali Conscious Convenience is a unique hybrid concept, combining green retailing with small-format food and grocery retailing, natural and organic niche. However it's not the first or the only retail format of its kind in the U.S.

In June of this year we wrote and published this piece,"Retail Innovation Memo: The 'Econvenience Store' Will Be the Next New Thing, and is A Convenience Store Industry Green Retailing Trend in the Making," about Green Spot Market & Fuels, a hybrid small-format convenience and grocery store that opened in the Dallas, Texas region earlier this year.

In the story, Natural~Specialty Foods Memo predicted we would soon begin seeing other, similar format stores opening in the United States, calling the eco-hybrid convenience/grocery store an emerging trend.

Hybrid eco-convenience stores popping up all over

It appears we're on to something with that prediction. In addition to Texas' Green Spot and Los Angeles' soon to be Locali Conscious Convenience, we've learned a hybrid eco-convenience-grocery store chain named Good to Go ECOnvience Center recently opened its first store in Grand Chute, Wisconsin USA on May 1, 2008.

Good to Go, which like Green Spot and Locali Conscious Convenience also bills itself as "the first eco-convenience store in the U.S.," says it has plans to open 150 of the green convenience-oriented stores in Wisconsin, Iowa and Northern Illinois by the end of 2010, which is a very ambitious store opening program.

Good to Go says its stores also are built using LEED green building guidelines. The Good to Go ECOnvenience Center features a green roof with plants and sod that minimize absorption of sunlight that could heat the building and force overuse of its HVAC system; energy savings during the summer cooling season can be as much as 25 percent. The soil also acts like a sponge to absorb rain and reduce storm water runoff by as much as 95 percent after a one-inch downpour.

"When it comes to our customers, we haven't set out to change the direction the wind blows. Rather, we have adjusted our sails," said Angie Nikolas, vice president of neighborhood relations for the retailer. "We're very proud to bring 24-hour convenience that minimizes the impact we make on our environment.

"Similar to Green Spot and Locali Conscious Convenience (although each have unique aspects as well), Good to Go's focus is on selling healthier natural and organic food, grocery, beverage, snack and prepared foods items as part of its green theme.

In Portland, Oregon, a company called Full Moon Foodies is working on creating a chain of small-format hybrid convenience-grocery stores with a green and natural products focus.

"I got tired of having to hop into the car to drive to a mega-organic mart, fight for parking and waste time standing in long lines whenever I needed a few items," Ellisa Wee, the retailer's founder says.

According to the company, "the retail concept provides customers with a knowledgeable staff; a modern, upscale store design; multiple community-based urban locations; and extended hours past those of grocery stores."

"We're not trying to re-invent the convenience store or the organic/natural food concept, we're trying to make it more accessible," Wee says.

The Full Moon Foodie's aren't the only retailers looking to penetrate (or perhaps create) the eco-convenience grocery niche however. A company called SeQuential Biofuels, which operates numerous fuel stations throughout Oregon and Western Washington state, has created a natural convenience market, which it is locating on site at its many fueling stations. Those stations offer conventional gasoline, biofuels and other green technologies. Many of the eco-convenience stores are solar powered. The stores also buy used vegetable oil form businesses and consumers and then turn it into biofuel.

The small-format store, called the Natural Market, sells conventional, natural and organic snacks and beverages, along with a limited assortment of grocery items. It features fresh, prepared foods, along with fresh produce. The stores also sell beer and wine, putting a special emphasis on locally-produced brews and wines from the Pacific Northwest region where the stores are located.

All of the coffee cups and straws used for the store's fresh brewed organic coffee are 100% compostable. Additionally, the retailer says it picks each product to sell in the stores "based on where, how, when, and by whom it was made," "Every effort has been made to source local, organic products, a company spokesperson says.

Part of the small-format continuum

We see this emerging small-format eco-convenience hybrid grocery-convenience store retailing trend as a "kissing-cousin" to the small format food and grocery retailing revolution happening in the United States, as well as in Europe and Asia. The eco-convenience stores are a variant of what is a multi-format small-format food and grocery retailing trend if you will.

For example, while there are qualitative differences between Tesco's Fresh & Easy Neighborhood Market, which now has 86 stores in Southern California, Nevada and Arizona, and what these retailers are doing--chiefly that Fresh & Easy is putting more of an emphasis on being a primary shopping venue with a low price focus on selling basic groceries and prepared foods--there are numerous similarities as well.

For example, the Tesco Fresh & Easy format puts a major emphasis on healthy and natural foods, preparing its fresh, prepared foods without using artificial ingredients and colorings. Fresh & Easy stores also sell lots of natural and organic grocery products and are positioned as environmentally-friendly markets just like the hybrid eco-convenience stores are, along with offering craft beers and specialty wines like the hybrid eco-convenience-grocery stores are doing.

Therefore, we view this format development as a continuum of sorts, as well as a natural foods variant of the tradition C-store format just as in many ways the natural foods store is a variant of the traditional supermarket.

As part of this format continuum, you have small-format grocers like Trader Joe's with a specialty and natural products focus, and Safeway's "The Market" format which offers basic and specialty groceries in a more upscale environment on one end. In the middle you have Tesco's Fresh & Easy and the soon to open Wal-Mart Marketside, which are hybrid combination basic grocery stores and fresh foods markets. And at the other end you have the small-format, no frills stores like Aldi and SuperValu, Inc.'s Sav-A-Lot, which are deep or hard discount limited assortment grocery stores.

Sitting alongside these various small-formats on this continuum you have the traditional convenience store, the supermarket and the natural foods store. It's like taking a piece from each one; the sums becoming the whole (format).

You can add to this the new hybrid eco-convenience stores, which are combining the traditional C-store format with a mini combination grocery and natural foods store, while still including gasoline fueling stations which offer traditional petroleum-based gas but also are adding cleaner biofuels.

All of the formats are going after two things in the main: the time-pressed shopper who might be tired of shopping at big box stores, along with a share of that shopper's stomach. Each has a similar but different niche. But in one way or the other all are competing against one another for that share of the consumers' stomach, and in many cases her 21rst century "green" conscious as well.

Small-Format Food Retailing Memo: 'How Sweet it is': New York City's Economy Candy; A Small-Format Urban Store With A Single Focus

Small-Format Food Retailing Special Report

It's a small-format store that's been around for 71 years. And it has a single category focus: candy.

From the most premium chocolate bars and natural and organic confections, to everyday candy bars, exotic brands and much more, Economy Candy on New York City's Lower East side not only is a veritable one-stop shop for everything candy, it's also a category killer of sorts, selling its huge selection of sweet treats at discount prices, hence the store's name.

The family-owned and run, narrow but long store with high ceilings--which also sells scores of varieties of nuts and dried fruits along with its candy massive selection--was founded in 1937 by current owner Jerry Cohen's father.

When the senior Cohen opened Economy Candy in 1937 it was the typical old-fashion candy shop of the era, consisting mostly of bulk bins full of every imaginable variety of candy, from jawbreakers to chocolates, along with selling boxed chocolates for the gift market.

Today the younger Cohen, Jerry, who runs the store along with his wife Ilene, son Mitchell and a few dedicated employees, operates what New Yorkers call the "Noshers Paradise of the Lower East Side."

Economy Candy, which is located at 108 Rivington Street in the Big Apple, is packed with every imaginable variety of candy. The Cohen's follow the old retailing strategy of stacking product high and selling it cheap, filling the store's long, narrow aisles with stacks of discount-priced confections, including ethnic candy items that appeal to Jews, Hispanics and others.

The family-owned store, which has loyal customers from multiple-generations, also sells a variety of specialty and natural foods items, including teas, coffees and other products a a sideline. Jerry Cohen (no relation to the Ben & Jerry's founder of the same name) understands complementary merchandising well.

What makes Economy Candy so popular and what has maintained an astounding level of customer loyalty is that adapting to today's market and customer hasn't meant abandoning its essential quality as a neighborhood candy store, Cohen says.

Commenting on his philosophy of constantly bringing in new items, Jerry Cohen says: "You need to have whatever it takes to get people in. Teas, sugar-free and low-calorie candies, gift baskets and hand-dipped chocolates are among the products that filtered in as the inventory has changed to reflect the changing urban landscape of today," he says about his philosophy and the store.

Economy Candy also keeps to its origins. Along with offering hundreds of varieties (maybe thousands) of packaged candies, the store merchandes scores of candy items in bulk, along with offering numerous varieties of dried nuts and fruits in bulk bins.

These items range from the basic nut varieties like almonds, walnuts and cashews, to more specialty varieties like Hazelnuts, all sold at value prices. The store also offers a variety of its own special nut blends, creating various combinations and selling them in bulk.

The same is the case with dried fruits. Among the varieties offered include: dried apples, blueberries, strawberries, cranberrys, tart cherries, dried cantaloupe and many others.

But it is candy that's at the heart--literally and merchandising-wise--of Economy Candy. upscale, downscale, premium, conventional, natural, organic (and candy brands that can't be found elsewhere) are shelved and stacked throughout the store. It's a shrine to the ingredient sugar. And speaking of sugar, walking through the store one can't help smelling that sweet scent no matter what part of Economy Candy you are in.

Service also is at the heart of Economy Candy. Knowing customers by name, letting them nosh on the sweet treats in the bulk bins as long as they don't make a meal out of it, and seeking out rare brands and varieties of candy for customers are all a part of the family-style customer service the Cohen family practices at their 71-year old small-format, value-priced candy store on the Lower East Side.

Economy Candy is an excellent example of how a small store with a single-minded focus, combining reasonable prices with category expertise and superior customer service, can not only survive but thrive, even in the biggest city in the United States.

Lessons from the store's merchandising and operations, category expertise, affordable pricing, superior customer service, and more, are valuable to food and grocery retailers of any size and format. We also think there's room in the retail space for more small-format, single-focus (with some complementary categories of course) stores.

And such single-focus, category killer stores don't have to be huge warehouse stores. Rather, like Economy Candy, they can be smaller footprint stores, as long as the format and execution at retail are done in a superior way.

Economy Candy is a sweet case study in doing it all well from a merchandising, operational and customer service perspective.

Small-Format Food Retailing Special Report: Global Small-Format Food and Grocery Retailing News and Notes

The International Small-Format Food and Grocery Retailing Revolution Marches On

United Kingdom

On July 16, Britain's Co-operative Group and the Somerfield supermarket chain jointly announced they've entered into an agreement for the Co-operative Group to acquire the 900 store Somerfield chain for ~1.6 billion-p (British Pounds).

The Co-operative Group operates small-format food and grocery stores throughout the United Kingdom (UK), along with banks, insurance agencies, travel agencies and related businesses. As the name implies, the Co-operative Group is a cooperative-owned enterprise. In fact it's the largest multi-retail format Co-op in the world in terms of total annual sales in its food stores and other businesses.

The acquisition of Somerfield, which operates fairly small-format but conventional rather than convenience-oriented supermarkets, will transform the Co-operative group into the UK's fifth-largest food and grocery retailing chain, just behind number four Morrisons. Tesco is the nation's leading retailer, followed by Wal-Mart-owned Asda and Sainsbury's.

With the Somerfield acquisition, the small-format Co-op chain will have annual sales of about ~8 billion-P (British Pounds), with an 8% share of the nation's total food and grocery market. Number one Tesco has about a 31% share. Number two Asda has an approximately 16% markets share, followed by Sainsbury's with about 14.5%, and Morrisons with about 10%. The remaining market share is fought over by Marks & Spencer, Waitrose and a handful of other key players in the UK.

Two small-format discount grocers, German-based Aldi and Lidl, also are becoming major players in UK food and grocery retailing with their no frills, limited assortment little discount dynamo grocery stores.

While the Aldi and Lidl small-format stores are price-focused, as both Germany-based international retailers stores are throughout the world, small-format food retailing is a format explosion in terms of styles and offerings in the UK.

For example, Tesco's Tesco Express small-format stores (currently about 800 in the UK) are fairly middle-market food and grocery stores with an emphasis on convenience.

Sainsbury's Sainsbury's Local small-format stores are similar, but a bit more upscale and specialty-oriented than the Tesco Express stores.

At the higher-end, Marks & Spencer's small-format Simply Food stores are much higher-end and feature the retailer's popular specialty and gourmet store brand food and grocery items.

Waitrose is joining the higher-end small-format segment in two new ways: with its new 3,000 -to- 5,000 square foot Market Town food stores positioned for smaller cities and towns in the UK, and with its just recently announced new convenience food and grocery store operation, which will feature approximately 15,000 square foot food and grocery stores positioned in cities and suburbs.

The Co-operative Group's small-format stores offer basic groceries and lots of natural foods, including organic and locally-produced foods. The stores also are positioned as environmentally sustainable, selling lots of Fair Trade products, focusing on animal welfare issues and practicing green retailing as a way of doing business.

Eastern Europe: Romania

France's Carrefour, the second largest retail chain in the world after number one Wal-Mart, Inc., is growing its small-format Carrefour Express food and grocery store count in Eastern Europe, with a particular focus at present on Romania.

Carrefour will open two Carrefour Express grocery stores in the Romanian cities of Lugoj and Bistrita next week.

The launch of the two new Carrefour Express small-format grocery stores is part of the French retailer's plan to remodel the Artima supermarket chain, which the French retailer took over in October 2007. Artima's 21 stores acquired by Carrefour are being converted to the Carrefour Express format, which can range from stores as small as 3,000 square feet in urban regions to about 15,000 square feet. Thus far nine of the 21 Artima stores have been converted to Carrefour Express stores in Romania.

The two Carrefour Express grocery stores will reopen on July 23 and July 24 respectively, according to Carrefour, which means crossroads in French.

Carrefour paid 55 million euros for the 21-store Artima supermarket chain.

The France-based global retailer now operates two formats in Romania: large hypermarkets and the small-format Carrefour Express grocery stores. Carrefour currently operates 15 hypermarkets in Romania, along with the nine Carrefour Express stores, with 13 remaining Artima supermarkets set to be converted to Carrefour Express small-format grocery stores.

India

The India-based blog Twenty22--India On the Move, which stands for the year 2022 when independent India will be 75 years old, has a well-researched and written piece about food, grocery and other format retailing in the nation with world's second-fastest growing economy, after China.

A key focus of the piece is about India's Reliance, which is a huge, multi-format retailer. Among Reliance's fast-growing food, grocery, soft goods and hard goods retail formats, is its about 4,000 -to- 6,000 Reliance Fresh small-format food and grocery store chain.

The piece also talks about India's Tata Group, which is another multi-format retailer, including operating a small-format grocery chain, along with other companies in India's fast-growing retail sector. Click here to read the piece from Twenty-22.

United States

An Iowa mayor opens a small-format specialty food store on main street

The small-format food retailing revolution in America seems to be becoming so popular that it's even drawing politicians into the business. The mayor of the Midwestern USA city of McGregor, Iowa, Roger Knott, and his wife Lora, have opened a small-format specialty-focused grocery store on main street in the Iowa city he runs as mayor.

The new independent grocery store is named McGregor's Top Shelf. At about 5,000 square feet it features specialty, natural and gourmet food and grocery items, an upscale deli, specialty wines, spirits and craft beers, fresh produce and fresh, prepared foods, and high-quality fresh meats from a nearby purveyor, Edgewood Meat Locker, in Edgewood, Iowa.

According to his honor the mayor and the grocer, the main street building is brand new but is designed to look like an old fashion general store. Above the food store, the independent grocer/mayor and his wife Lora, build a small Bread & Breakfast Inn, which features a two-bedroom apartment, and balcony deck which is available for nightly or weekly rental. Bed & Breakfast tenants get fresh gourmet coffee and pastries from the small-format McGregor's Top Shelf grocery store as part of their rental of the two bedroom apartment.

McGregor's Top Shelf opening on the city's main street also is part of a growing trend in the U.S. in which grocers are opening smaller format stores in city neighborhoods and in downtown districts. This includes urban stores focusing on both basic groceries as well as on specialty foods and groceries.

A small-format gourmet rose for East Harlem, NYC

Speaking of urban America and small-format specialty foods-oriented stores, an Ottomanelli Brothers New York Grill will open soon at 1325 Fifth Ave. at 111th Street in New York City's East Harlem neighborhood, according to the owners of the family-owned, 100-year-old New York chain, best known for its prime cuts of meat, reports the New York Sun newspaper.

Known for its freshly ground meat, grass-fed beef, poultry, and game, Ottomanelli's operates five butcher shops and restaurants in the city. Nicolo Ottomanelli, who with his brother Joseph is chairman of the company, said his grandfather founded the business in 1900 with a pushcart on Delancey Street. Another Ottomanelli's store, on Bleecker Street, is owned by cousins, he said.

The new, 28,153-square-foot Ottomanelli's, situated on a tree-lined block not far from the Duke Ellington memorial, will feature a sidewalk café facing Central Park, the New York Sun reported last week.

East Harlem is going through a gentrification process in which the historically low-income neighborhood is becoming home to higher-income professionals who are flocking to the new residential developments being constructed in the neighborhood. In turn, these changing demographics are bringing in lots of higher-end retailers of all formats.

Will Tesco's Fresh & Easy feel the no-booze sales blues?

As we've written about before, Tesco's small-format Fresh & Easy Neighborhood Market grocery chain, which currently has 63 combination basic grocery and fresh foods markets in Southern California, Nevada and Arizona, has self-service checkout in all of its stores. Shoppers scan their own grocery purchases and the checkout lanes, then bag the groceries themselves. The stores only except debit and credit cards, and cash. But not paper personal checks. Nor do the small-format Fresh & Easy stores cash payroll or government checks like nearly every American supermarket does.

The stores also offer what the retailer calls "assisted checkout," which means that if a shopper wants help checking his or her order they can request help from a store clerk who will either assist the customer or do the checkout for them. However, the shopper has to ask. In other words, the default checkout system is self-service.

Tesco's Fresh & Easy grocery markets also sell wines and beers in their stores, including a selection of their own specially-blended wine varieties, similar to what Trader Joe's grocery stores offer.

If a California State Assemblyman from Southern California has his way however, stores like Fresh & Easy which offer only self-checkout lanes rather than a mix of full-service and self- checkout like other chains in California do, will not be able to sell alcoholic beverages in the stores unless they dedicate at least one checkout lane in each store to full-service, according to a report in the blog Fresh & Easy Buzz, which focuses on covering and writing about Tesco's Fresh & Easy Neighborhood Market USA. Customers buying alcoholic beverages in the store would have to use that lane.

Tesco's Fresh & Easy is the only food and grocery chain currently in California that has self-service-only checkout lanes. Obviously, should this proposed legislation pass, at best it would require Tesco to add a full-service checkout lane in each of its stores. The worse case scenario if it chose to not do so, would be that the stores could no longer sell wine and beer. We think they would choose the former rather than the latter, as the specially-blended wines are a significant part of the retailer's merchandising strategy.

If the legislative bill, AB 523, proposed by California Democratic Assemblyman Hector De La Torre advances in the Assembly it will be interesting to see if the California Grocers Association (CGA) takes a position for or against it.

The CGA is the state trade association for California's food and grocery retailing industry and counts among its members California's leading supermarket chains like Safeway Stores, Inc., Kroger Co.'s Ralphs, SuperValu's Albertsons, Save Mart, Raley's and most others, along with nearly every major independent grocer in the Golden State.

None of these member chains or independent offers self-service only checkout lanes in its stores. In fact, only a handful even have a mix of self-service and full-service checkout lanes in their stores. Those few that do, like some of the Ralphs new "Fresh" format supermarkets and Safeway's new small-format "the market by Vons" in Long Beach, California, have just a few self-service checkout lanes, compared to a higher number of full-service lanes per-store. Read the full story from Fresh & Easy Buzz here.

Hardball on and off the court

Fresh & Easy Buzz also has an interesting feature story about former NBA basketball all-star Kevin Johnson, who's running for Mayor of Sacramento in a highly contested runoff election with the city's current mayor this November.

Johnson, who is a native of Sacramento, moved back to the city after retiring from the NBA. He then launched a career as a developer, along with founding and running a successful non-profit community development organization called HOPE.

As we reported in Natural~Specialty Foods Memo earlier this year, Johnson the developer is bringing a Tesco Fresh & Easy Neighborhood Market to Sacramento's historically low-income Oak Park neighborhood, the very same Sacramento neighborhood he was raised in.

Fresh & Easy Buzz reports that Johnson, the driving force behind bringing the Fresh & Easy grocery store to the Oak Park neighborhood, which is underserved by supermarkets, is being attacked on multiple fronts in an aggressive campaign by a local labor union, which supports incumbant Sacramento mayor Healther Fargo, who Kevin Johnson is challenging. Tesco appears to be somewhat in the middle of the current mayors' race, and the attack campaign, by virtue of the fact its Oak Park neighborhood store is going on land owned by Johnson.

Tesco's Fresh & Easy also has union problems of its own, as the United Food & Commercial Workers union is waging an aggressive campaign against the chain in order to get Tesco executives to sit down with union leaders and discuss the potential unionization of Fresh & Easy store-level employees. Read the Fresh & Easy Buzz feature story: "Fresh Feature: A Former NBA All-Star Who Wants to Become Mayor, A Trade Union, And A Future Tesco Fresh & Easy Grocery Store In Sacramento, California ."

Small-format innovation: Dillions and Kwik Shop to create combination small-format grocery and convenience store in Greensburg, Kansas

From the Dodge City, Kansas Daily Globe: July 18, 2008

By Cherise Forno
Dodge City Daily Globe
Jul 18, 2008

Greensburg leaders, government officials and Kwik Shop and Dillons’ representatives gathered on Thursday to break ground for the new grocery store in Greensburg.

The new Dillons will be built next to the existing Kwik Shop to create a combination convenience and grocery store. This expansion will increase the Kwik Shop to 8,000 square feet, which is three times its current size.

"It is encouraging to see progress and growth as Greensburg rebuilds, and we are humbled to be a part of the journey," said Dillons President John Bays. "Greensburg and Kiowa County residents have supported Dillons and Kwik Shop for over 70 years, and we are pleased to continue this relationship."

Lt. Gov. Mark Parkinson said he was inspired by the city's progress over the last year.

"What I see here is amazing," he said.

The Kwik Shop, located at 203 W. Kansas Ave., has been providing Greensburg residents with fresh produce, meat, dairy products, fuel and household items since a Level F5 tornado devastated the city in May 2007.

The addition of a Dillon’s grocery store will double the selection of fresh produce available and provide more selections for all grocery items.

The store will also feature a deli department with an assortment of home-style hot foods. The Kwik Shop will continue to meet the city's daily needs for items such as fuel, fresh-brewed coffee, newspapers and Kansas lottery tickets.

This grocery and convenience store, expected to be completed in early 2009, will be the first of its kind.

The Dillons store will be built in accordance with the city's dedication to the environment and sustainability, said Jeff Parker, president of Kwik Shop.

Some of the "green" features of the building include a white-reflective Thermoplastic-Polyoflefin roof with extra insulation; skylight coverage of the roof to provide natural daytime lighting; low-water demand landscaping; and highly efficient systems for cooling, heating and refrigeration equipment.

"This is an opportunity for the world to see Dillons through Greensburg's eyes," Mayor Bob Dixson said.

Dillons' decision to build the store in an eco-friendly manner is one of many ways in which the city is fulfilling its commitment to improving the environment.

"We want to educate people about going green," said Levi Smith, a Kwik Shop employee and member of the Green Club. "It's not a radical change. We want to teach people how easy it is."

Smith and other Greensburg High School students established the Green Club to make the process of "going green" easier for the community.

Last holiday season, the students went through the neighborhood collecting Christmas trees to recycle. More than 50 trees were turned into mulch for Greensburg's trees and plants instead of being dumped in the trash.

The club also participates in a lightbulb program, in which club members provide residents with energy-efficient compact fluorescent lightbulbs in exchange for their old bulbs.

End Piece: Trader Joe's says 'no' to Palm Springs despite petition drive

It appears that 6,000 signatures on a petition to bring a Trader Joe's small-format specialty grocery store to the Southern California desert region city of Palm Springs just isn't enough for the Southern California-based chain, which is owned by members of the same German family that own no frills, small-format discount grocery chain Aldi International.

This despite the fact after all that Palm Springs was good enough for the likes of Frank Sinatra, Dean Martin and Sammy Davis Jr., collectively known in the 1950's and 1960's as the "Rat Pack," along with such former residents as the late eccentric billionaire Howard Hughes and the girlfriend to two Kennedy's, President John F. Kennedy and his brother Robert, Marilyn Monroe.

For well over a year members of a community coalition of Palm Springs residents have been meeting and organizing in an atempt to lure a Trader Joe'stores to their city, which is a popular upscale resort mecca, as well as having a considerably fast-growing year-round resident population.

ButTrader Joe's which has stores in three nearby cities--next door Palm Desert, Cathedral City and La Quinta--has just told the good citizens of Palm Springs it won't be bringing one of its quirky small-format grocery stores to the city anytime soon; although it appreciated the petition drive which resulted in 6,000 signatures.

Meanwhile, Tesco's Fresh & Easy, which also has stores in the three cities mentioned above, will soon open one of its small-format combination basic grocery and fresh foods stores in Palam Springs. The Fresh & Easy and Trader Joe's stores have many similarities, although Fresh & Easy sells an assortment of basic grocery products while Trader Joe's focuses on specialty and natural food and groceries items.

If we were running Tesco Fresh & Easy's marketing department, the first thing we would do is get a copy of that petition to bring a Trader Joe's to the city, and mail each of the 6,000 names and addresses on the petition an invitation to the Palm Springs' Fresh & Easy grocery store grand opening, along with a couple of the retailer's $5 -off (on any order of $20 or more) coupons.

In other words, make TJ's loss Fresh & Easy's gain, as well as making the 6,000 residents who wanted a Trader Joe's feel welcome at the new Fresh & Easy store, perhaps converting them to Fresh & Easy shoppers. You can read a report here from the local Desert Sun newspaper.