Bigger isn't better with shrinking grocery stores

In an industry that has long declared "bigger is better," many supermarkets are opening increasingly smaller stores, according to the New York Times.

The article reports that Safeway has already opened a smaller store in California and Whole Foods and Wal-Mart are contemplating doing the same.

The previous mentality within the industry seemed to be that offering the largest selection would attract the largest customer base, but that is being reconsidered. Shoppers often go to the grocery store on the way home from work or to pick up a few last-minute items and in those cases the speed of the visit is very important.

A trend toward more prepared and ready to eat foods is also contributing to the shrinking stores. The article reports that themany of the plans for these smaller stores still include large deli counters and quick-meal options.

Big supermarkets continue to be very successful, so the trend is likely to emerge in new locations. Instead of building increasingly larger stores, more major supermarkets are planning to downsize their new branches.

A relatively new entrant in the US market, the British retailerTesco, has pursued the "shrinking store" strategy in the Southwest.

The article reports the company has opened more than 70 stores in the past year alone. Retailers are hoping that revisiting the concept of the small localgrocery store will keep their customers loyal.

Click here for more information.

--Bridget O'Sullivan