The Freshest Ideas Are in Small Grocery Stores (Published 2018) (2022)

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As big supermarkets struggle, a new crop of local groceries are innovating to serve niche audiences and advance social causes.

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The Freshest Ideas Are in Small Grocery Stores (Published 2018) (1)

By Kim Severson

BALTIMORE — Maj. Gene Hogg, the Salvation Army’s commander for central Maryland, organized mobile kitchens after the twin towers fell in Manhattan and the levees broke in New Orleans. He fed protesters and police officers during the riots that erupted here in 2015 after a young man named Freddie Gray died of injuries he received while in the back of a police van. More than 200 businesses were destroyed, many of them places where people bought food.

Once the city calmed down, he pondered his next move. After three days of prayer and fasting, Mr. Hogg had an answer.

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“God said I needed to open a grocery store,” he said.

It wasn’t exactly what he had hoped to hear. What Mr. Hogg, 56, knew about grocery stores he could have scribbled on the back of receipt.

Now, three years later, he can talk about produce and Pop-Tarts like a pro. On a recent Friday afternoon he bounded around the aisles of DMG Foods, a bright, 7,000-square-foot, nonprofit grocery store, showing a customer with a baby how to print a coupon and encouraging another to try the freshly ground chicken.

The market, which opened in March in a working-class neighborhood three miles from where the riots began, is one of a growing number of experimental grocery stores that have emerged as traditional supermarkets confront a crisis that industry analysts say could surpass the retail apocalypse that pounded shopping malls a decade ago.

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Most North Americans still buy their food at the classic supermarket, with its wide aisles and seemingly limitless choices. But stores like Kroger, the nation’s largest chain with more than $105 billion in sales in 2017, are being cannibalized by a host of discount competitors like Dollar General and Aldi on one side, and by the growing dominance of Amazon and online delivery on the other.

“By and large, supermarkets are kind of behind the eight ball” in responding to changes in how people shop, said Diana Smith, the associate director of retail and apparel for the market research company Mintel.

Customers, especially younger ones, want stores that offer what some industry analysts have come to call “food experiences,” with craft beer on tap, meals to go and vegetable butchers. They tend to shop only when they cook, visiting more than one store to collect ingredients, rather than making a weekly trip to stock the pantry with toilet paper, chuck roast and gallons of milk.

Large chains are throwing everything they can at the problem, planning smaller stores customized for different demographics. Kroger, which already sells clothes at some of its stores, has developed a grab-and-go fashion line called Dip, and is testing driverless delivery. The Midwestern chain Hy-Vee is adding medical clinics and spa-inspired bath boutiques to its stores.

But some of the most radical reinvention is happening at the local level, in both cities and small towns, where a new breed of small community stores use the grocery aisles to fill cultural niches and address social needs.

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“There’s a lot of innovation that is geared toward bringing people together and back to their food, which is the opposite of the order-your-food-online thing,” said Brianne Miller, 30, the founder and chief operating officer of Nada, a package-free grocery store she opened in June near downtown Vancouver, British Columbia, with her business partner, Paula Amiama.

At Nada, everything, including toothpaste and chocolate, is sold package-free. Shoppers can buy scoops of frozen berries, a handful of crackers and just one egg, if that’s all they need. There’s no plastic wrap or paper at the deli counter. Customers bring their own containers, buy reusable ones at the store or take some from a stack that have been cleaned and sanitized, using a digital scale to weigh and tag them before they start shopping.

The store won’t be equipped to sell fresh meat, but will soon add cured meats and more frozen seafood (caught in a sustainable way, of course). Suppliers, too, have to be willing to reduce waste: A local coffee roaster, for example, delivers beans in refillable bulk containers.

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There’s a similar store, Zero Market, in Denver, and one called the Fillery planned for Brooklyn. No-waste stores are already popular in parts of Europe, and are popping up in other Canadian cities.

Ms. Miller, a marine-mammal biologist who has a big vegetable garden and likes to bake, opened Nada after she saw how much plastic waste was choking the oceans. “It was a leap of faith,” she said.

About 300 people showed up — more than she expected — to shop in the 2,332-square-foot store on its first day. Business continues to beat projections, and Ms. Miller has fielded more than 100 calls from people all over the world who want to know if she plans to franchise or who hope to open their own version.

“It just shows how much people want to buy their food this way,” she said.

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Two thousand miles away in New Prague, Minn., population around 7,600, Kendra and Paul Rasmusson have been inundated with inquiries from people equally enamored with their grocery concept: a store that is largely unstaffed.

The couple’s young daughter has epilepsy, and they discovered early on that a healthy diet could help her feel better. They couldn’t find enough local, organic items at the big-box store close to town, and the nearest co-op was 20 miles away. So, almost three years ago, they opened Farmhouse Market.

Ms. Rasmusson, 34, works part time as a marketing consultant and is the primary caretaker for their three young children. Her husband, 40, commutes 90 miles round trip for a banking job in Minneapolis. They calculated what it would take to open their own store, and realized the numbers wouldn’t work if they were to run it in a traditional way. There just weren’t enough customers.

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Then, inspired by a nearby 24-hour fitness center, they had an idea: Why not create a store that didn’t need staff, for shoppers who wanted organic ketchup, gluten-free crackers and vegetables from local farmers?

Members pay $99 a year and use a key card to open the door. They can shop anytime they want. The system runs on a series of iPads and other devices. Lights are motion-activated, and checkout is done on a tablet. Local farmers, beekeepers and other suppliers have cards, too, so they can restock their supplies at midnight if they want. Ms. Rasmusson prices items from home, and texts orders to suppliers.

Members can use a space upstairs for community meetings, or hold classes on making kombucha or Spanish for children. And the store is not completely unmanned. It is open to the public nine hours a week, with an actual cashier.

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The Rasmussons don’t worry too much about theft. They can monitor the store, which is only 650 square feet, with remote cameras. Inventory is tracked digitally, and they have a one-theft-and-you’re-banned-forever policy.

“Honestly, I think the small-town thing plays into this,” Ms. Rasmusson said. “People feel like it’s their market and they need to defend it. They feel invested in it.”

Membership is up to 275, and Ms. Rasmusson has been invited to speak at rural food conferences, where people ask if her model or something similar — like the stores Amazon is testing in Seattle, where an app records purchases as the customer leaves — could work in rural areas.

“These rural communities are losing grocery stores, and it isn’t making sense to keep them open,” she said. “We need new models.”

More than 80 people from around the world who are interested in opening a version of her unstaffed store have contacted her since Farmhouse Market opened. “I tell people we just pieced it together and dug in and figured it out,” she said.

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In Baltimore, the Salvation Army market is tackling an urban version of the grocery-store drought. The DMG Foods was built in the front of a Salvation Army distribution center in a neighborhood where families in public housing mix with Johns Hopkins students and older people who grew up there.

Many eat at a nearby McDonald’s or a KFC, or walk a quarter-mile to the Giant Food. People around here tend to shop for groceries a day at a time, Mr. Hogg said. Budgets don’t allow for big, weekly shopping trips to stock up, and many residents lack a car.

The cheery store, whose name is an abbreviation of the organization’s motto, Doing the Most Good, feels a little bit like what Amazon would ship if you typed “grocery store” into the search bar. And in a way, that’s what Mr. Hogg did.

The equipment, from the checkout counters to the meat cases, came from another Baltimore community-minded grocery that opened in 2013 but went out of business. The stock comes from C&S Wholesale Grocers, the nation’s largest independent grocery distributor, which gives Mr. Hogg a discount.

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The grocery cost $2.2 million to set up, and his operating costs are low because the Salvation Army handles human resources and some other business operations. The power company takes a quarter off the energy bill. Donations and grants pay for education and training.

“We didn’t do this to make money selling groceries,” Mr. Hogg said. “We did this so people could have a neighborhood grocery store with fresh food.”

The city’s food bank pitches in, so customers who say they are poor enough to qualify for government food stamps get a little something extra at the checkout counter. Sometimes it’s 10 pounds of chicken, other times a small box of snacks.

The store is intended to serve as a work-training site, and Mr. Hogg is planning cooking demonstrations to teach shoppers how to eat better. There are baskets of free fruit for children.

Still, the store has plenty of chips and sodas. “You can’t tell people what to eat,” he said, and choice is a matter of dignity when you’re poor. So is the simple act of shopping. “There’s something about saying, ‘I buy my own groceries,’” he said.

He and the managers are learning what customers want. They added Goya products, fresh ginger and tofu, which is popular with college students and older shoppers. Bagged salad mixes didn’t sell, but prepared ones did. They added fried chicken along with rotisserie chickens, which at $4.99 are cheaper than at other grocery stores.

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There are some surprises, like the popularity of fresh liver. “We got no shrink on liver,” said George Turner-El, the butcher, who never has to throw any out.

People from the neighborhood who stopped in one day in July said they didn’t expect the store to be so nice or so inexpensive.

“At first, we were like, ‘What is this?’” said Jamie Rogers, 31, who was shopping with her sister, Stephanie Rogers, 29.

Jamie bought the ingredients for pepper steak and rice, and realized it cost her only $8. At Giant Food, she would have had to pay about $15, and she would have endured a long walk there and back, she said.

Carol Parker, the cashier, scanned their groceries. As she bagged the food, she reminded the sisters always to check for weekly specials.

She did a little cheerleading, too. “What has Giant ever done for you? What has Safeway ever done for you?” she asked. “We’re your store.”

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FAQs

How can I improve my small grocery store? ›

Use a variety of community-wide and in-store promotions to boost grocery store sales and profits.
  1. Advertising and Promotion. ...
  2. In-Store Coupons. ...
  3. Change Item Locations. ...
  4. Tier Items Near Eye Level. ...
  5. Use Larger Carts. ...
  6. Group Products to Create a Meal. ...
  7. Use Loss Leaders. ...
  8. Offer Free Samples.

What are the trends in the grocery industry? ›

Here are the top trends that promise to shape the grocery industry in 2022.
  • Quick delivery expands.
  • Turning to automation to offset labor shortages.
  • Meals get fresher and more convenient.
  • Retail media networks expand.
  • Premium products accelerate.
  • Getting into the business of B2B.
4 Jan 2022

What is a small format grocery store? ›

The average grocery store size is currently 38,000 square feet, with small formats ranging in size between 12,000 square feet and 25,000 square feet, and even smaller in urban markets.

Why small grocery store is a good business? ›

The most compelling argument for grocery store investment is also the simplest one: demand. Grocery stores sell food, which is something that we all need, every day, to survive. As a result, there is, and will always be, a constant demand for the items that grocery stores sell.

How do small grocery stores attract customers? ›

How do you attract customers to your store?
  • Offer doorbusters for new in-store customers.
  • Send out promotion codes.
  • Host events at your store location.
  • Offer online shopping with in-store pickup.
  • Create an eye-catching window display.
3 Aug 2021

What are the three trends in the food industry? ›

Three big trends in food and drink
  • Functional upgrade.
  • Kitchen redefined.
  • Plant-based 3.0.
  • Snacking and the role of snacking across different occasions.
  • Revaluating food service.
  • Sustainable nutrition.
20 Jun 2022

What factors affect grocery shopping? ›

The factors which have influence on consumers' choice of retail store are specifically problem solving, the physical environment, customer service, customer trust, commitment, and product accessibility.

What are three trends in food service? ›

Top ten foodservice trends for 2022
  • Plant-based food. Gaining mainstream attention in 2021 and predicted to grow exponentially in the coming year, plant-based foods are a trend here to stay. ...
  • A sustainable future. ...
  • Less alcohol. ...
  • Global cuisine. ...
  • Social media. ...
  • Shifting restaurant layout. ...
  • Resurgence of fine dining. ...
  • Ghost kitchens.

What store layout is recommended for small stores? ›

The free-flowing layout, great for smaller businesses and sparking impulse buying, is where merchandise, fixtures and other items a store wants on display are grouped together in a free-flowing pattern throughout the store.

Do small grocery stores make money? ›

Sure, big grocery stores have low profit margins, but they make money by selling large numbers of items in multiple locations. Smaller grocery stores can see higher profit margins through intelligent inventory management, excellent customer service, and savvy store management.

What is the meaning of small store? ›

Related Definitions

SMALL STORE means a retail or wholesale establishment that sells goods or provides services to consumers and occupies under four thousand square feet of retail or wholesale space, excluding storage space, and is not one of a chain of stores.

Why Small shops are popular with consumers? ›

Local businesses tend to hire people with a high level of expertise in order to provide their customers with the best knowledge they can. Many small shops offer hands-on experiences that larger stores and online retailers do not.

Why local grocery stores are better? ›

Better produce: When you buy produce from larger chain markets, the fruits and vegetables are picked in bulk weeks beforehand and shipped from faraway distribution centers. Local markets often have relationships with local farms, reducing the amount of time it takes to get your food to the market.

What are the advantages of supermarkets over small shops and stores? ›

More variety of goods. Discounts on almost all things they sell. They buy goods directly from the producers for a lesser price. Freedom of selection.

How do grocery stores improve customer experience? ›

10 easy ways your staff can improve the customer experience
  1. Say “Thank you” ...
  2. Stay present without hovering. ...
  3. Never turn away from an approaching customer. ...
  4. Smile. ...
  5. Establish procedures for dealing with unhappy customers. ...
  6. Encourage patience. ...
  7. Never say, “I Don't Know” ...
  8. Don't make promises you can't keep.

What is the best way to attract the customers? ›

5 Tips for Attracting New Customers
  1. Identify Your Ideal New Customers. ...
  2. Use Direct Response Marketing to Attract Customers. ...
  3. Give Something Away to Entice New Customers. ...
  4. Give Your Business a Face Lift to Increase Sales. ...
  5. Get The (Right) Word Out.

How do you attract customers with words? ›

10 Powerfully Persuasive Words Your Customers Want to Hear
  1. Free.
  2. Exclusive.
  3. Easy.
  4. Limited.
  5. Get.
  6. Guaranteed.
  7. You.
  8. Because.
2 Aug 2016

What is the key to success of store? ›

There are five keys to success in retail: location; marketing; store layout and appearance; service and assortment, and bundle selling. Let's take a look at how each of these can help you establish a successful retail operation.

What is the smartest way to grocery shop? ›

How To Shop Smart for Groceries
  • Plan ahead. ...
  • Make a shopping list. ...
  • Check the kitchen before you leave. ...
  • Make shopping a family activity. ...
  • Be methodical about shopping. ...
  • Check food quality — and expiration dates. ...
  • Resist bargains. ...
  • Stick to your list.
11 May 2022

What is the most successful grocery store? ›

Top 50 food and grocery retailers by sales
1 RANK1Walmart1 COMPANY Walmart18.53 % CHANGE8.53
2 RANK2Amazon2 COMPANY Amazon243.42 % CHANGE43.42
3 RANK3Kroger3 COMPANY Kroger38.4 % CHANGE8.4
4 RANK4Costco4 COMPANY Costco49.3 % CHANGE9.3
5 RANK5Walgreens Boots Alliance5 COMPANY Walgreens Boots Alliance53 % CHANGE3
28 more rows
6 Jul 2021

What is the most trending food? ›

Capitalize on these trends in 2022 and beyond:
  1. Plant-Based Foods Growing Like Weeds. ...
  2. Zero-Waste Cuisine Takes Hold. ...
  3. Healthy Foods That Are Good for Your Guts. ...
  4. The Demand for Kombucha Set to Rise. ...
  5. The Growth of the Superfood Powders Trend. ...
  6. “Keto” is One of the Biggest Food Trends. ...
  7. Cold Brew Coffee Set to Explode.

Why is it important to have food trends? ›

Why Are Food Trends Important? Food is similar to fashion. The trendsetters of the industry include celebrity chefs and major food corporations. With the help of good marketing and the right taste, trends can become well-known amongst other food options.

How does grocery shopping affect the economy? ›

In addition to providing jobs, healthy food retail also increases or stabilizes home values in nearby neighborhoods, generates local tax revenues, provides workforce training and development, and promotes additional spending in the local economy generated by the store and the new jobs it creates (the “multiplier effect ...

What are 4 shopping tips for grocery shopping? ›

How to Make Wise Grocery Shopping Choices
  • Shop on a full stomach. ...
  • Go armed with a list and stick to it, especially if your kids are “helping”.
  • Plan your meals for the week before you shop and then buy what's on the menu. ...
  • Shop only once a week. ...
  • Shop when you have energy and aren't worn out from a busy day.

What are the 4 factors that influenced consumer purchases? ›

In general, there are four factors that influence consumer behaviour. These factors impact whether or not your target customer buys your product. They are cultural, social, personal and psychological.

What are the emerging trends in the new food economy? ›

Sustainable Food Supply Chains

Consumers are expressing strong interest in sustainability. They increasingly want to know that the food they consume is produced in sustainable ways, the raw materials used are grown in sustainable ways and the packaging contributes to improved sustainability.

What food trends will be new or grow in popularity in 2022? ›

10 food and drink trends set to soar in 2022
  • Flexitarian food. Retailers take note: the flexitarian movement is going strong. ...
  • Bigger, better breakfast. ...
  • Mushrooms. ...
  • Bottled cocktails. ...
  • Nostalgic desserts. ...
  • 6. Japanese flavours. ...
  • Levantine food. ...
  • CBD.
19 May 2022

How do you organize a small convenience store? ›

10 Tips to Help You Run a Successful Convenience Store
  1. Keep Bathrooms Spotless. ...
  2. Illuminate the Forecourt. ...
  3. Manage Your Inventory and Offer More Products. ...
  4. Keep it Organized. ...
  5. Increase Interior Visibility for Your Cashiers. ...
  6. Hire and Reward Attentive Staff. ...
  7. Try Testing New Products. ...
  8. Clean the Soda Fountain and Food Areas.
13 Feb 2020

How much does it cost to start a small grocery store? ›

A small mom-and-pop grocery store can cost you about $25,000 to $50,000. There are other costs that you should also take into consideration. These include supplies, inventory, permits, licenses, and bonds.

Why are grocery store profit margins so low? ›

One reason why grocery stores have such low profit margins is because of competition. Grocery stores are one of the most ubiquitous types of retail operations there are. They meet a very basic human need - the need to eat - and so will always be in demand. This demand will inevitably be met by lots of companies.

How do grocery stores increase profit? ›

10 strategies to increase sales in Supermarket/Retail Grocery Store
  1. Know your customer: ...
  2. Offer suggestions: ...
  3. Reduce wait time at counters: ...
  4. Create combo packs: ...
  5. Update regular customers with offers: ...
  6. Be Omni-Channel: ...
  7. Value customer's feedback:
19 Mar 2021

What is another word for small store? ›

What is another word for retail store?
boutiquestore
mini-mallshopping centerUS
general storechain store
grocery storediscount store
five-and-dimediscount house
43 more rows

What is a small store called? ›

A convenience store, convenience shop, corner store or corner shop is a small retail business that stocks a range of everyday items such as coffee, groceries, snack foods, confectionery, soft drinks, ice creams, tobacco products, lottery tickets, over-the-counter drugs, toiletries, newspapers and magazines.

What are small retail stores called? ›

Even giants like IKEA and Target are opening their own mini-stores. This trend toward small shops is called micro-retailing.

What makes a grocery store profitable? ›

How do grocery stores increase profits? You can boost profitability by reducing shrink, incorporating new loss leaders, strategically displaying products, using customers' impulsivity to your advantage, and making sure they aren't overwhelmed with variety and choices.

What is the most profitable item in a grocery store? ›

The items with the highest retail markup will bring in the most profit per item. But, if you only sell one or two of those items, it won't be very profitable.
...
What is the most profitable item in a grocery store?
  • Prepared Foods.
  • Vitamins.
  • Bodycare.
  • Fresh coffee.
  • Reuseable shopping bags.
  • Cheese.
  • Deli meat.
  • Produce.

How can the performance of a store be improved? ›

9 Proven Tactics to Improve Retail Employee Performance and Sales
  1. Educate retail employees on the business. ...
  2. Get retail employees' feedback and input. ...
  3. Reward retail employees for doing better. ...
  4. Give retail employees the tech and tools they need. ...
  5. Build a retail employee community. ...
  6. Recognize retail employees' greatness.
16 Oct 2019

Can a small grocery store be profitable? ›

Sure, big grocery stores have low profit margins, but they make money by selling large numbers of items in multiple locations. Smaller grocery stores can see higher profit margins through intelligent inventory management, excellent customer service, and savvy store management.

What sells the most in a grocery store? ›

TOP SELLING GROCERY ITEMS
  1. SODA (COKE, SPRITE) & SOFT DRINKS.
  2. MILK.
  3. CHIPS (CHITOS, DORITOS & LAY'S)
  4. EGGS.
  5. BREAD.
  6. BREAKFAST CHEREAL & INSTANT OATMEAL.
  7. CANDY BARS (KIT KAT, SNICKERS & MILKY WAY ETC.)
  8. BLOCK CHEESE & DELI CHEESE.

Is owning a grocery store a good business? ›

Conventional grocery stores make 1-2% bottom-line profit, but stores like Whole Foods Market may generate 5-12% profit. However, for small independent grocery stores, 1 to 4% is more typical. There are also a lot of factors that affect independent owners more, such as marketing, product costs, and shrink.

What item sells the most? ›

The most sold item in the world is clothing and fashion items. This ranges from women and men's outfits to children's clothing, shoes, accessories, and more. People love their clothes, and fashion isn't going anywhere!

What are the most profitable items in convenience store? ›

These convenience store products are among the most popular and could be valuable assets to your store's inventory.
  • Lottery Tickets.
  • Non-Alcoholic Beverages. ...
  • Gas and Automotive Supplies. ...
  • Packaged Snacks and Candy. ...
  • Over-the-Counter Medication. ...
  • Hot Food. ...
  • Toiletries. ...
  • Ice Cream and Dairy Products. ...
28 Jan 2020

What is the most profitable store to open? ›

Top 30 Profitable Retail Business Ideas with Low Investment
  • 1) Grocery store. it is one of the most profitable retail business in today's environment. ...
  • 2) Stationery and bookstore. ...
  • 3) Customized gift shops. ...
  • 4) Cosmetic store. ...
  • 5) Perfume stores. ...
  • 6) Mobile store. ...
  • 7) Kids store. ...
  • 8) Sports shop.
1 Oct 2022

What would be the most important aspect to a successful store? ›

To be successful you must deliver world-class customer service; you must 'go the extra mile for the customer'. This principle is founded on years of experience with customers and working with many different teams that provide customer service.

How can we improve store and team quality? ›

Defining and Improving Product Quality
  1. Understand What Quality Is. ...
  2. Build a Solid Product Strategy. ...
  3. Implement a Quality Management System (QMS) ...
  4. Make Quality a Part of Your Company Culture. ...
  5. Perform Product and Market Testing. ...
  6. Always Strive for Quality.

How do you spend wisely in a grocery store? ›

How to save money on groceries
  1. Pay with a grocery rewards card.
  2. Sign up for the loyalty program.
  3. Clip coupons.
  4. Join a wholesale club.
  5. Go in with a list and stick to it.
  6. Buy items on sale.
  7. Avoid pre-packaged or processed items.
  8. Compare prices between stores.

How do grocery stores attract customers? ›

9 ways to attract customers to your store
  1. Evaluate your store operations. ...
  2. Prioritize and decide to change those things that aren't working first. ...
  3. Focus on your associates. ...
  4. Market to people who already know you. ...
  5. Use retail sales training so your crew can sell your merchandise. ...
  6. Become a student of Facebook.

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