In general, the traditional grocery stores being built today are smaller than those built in the 2000s. Sure, there's chains and geographic markets that are exceptions, but the trend of smaller stores will continue for three key reasons -pseudo3d wrote: ↑January 30th, 2020, 5:39 pm I disagree that the "era of large supermarkets is coming to an end". Sure, there aren't as many traditional supermarket chains anymore and square footage is no longer increasing, but when chains like H-E-B are still pushing out 70k+ square foot stores even in dense, urban footprints (and other independents like Hy-Vee and Giant Eagle continue to work with large stores) while smaller prototypes (both from small store chains and large chain prototypes) from a variety of contenders are hit and miss, the death of such stores is highly exaggerated.
(a) fewer shoppers are purchasing non-food items from traditional supermarkets: Older Millennials are far more likely to purchase non-food items elsewhere, whereas younger Millennials are skipping the traditional supermarket altogether. Traditional supermarkets were hopeful that as older Millennials reached peak earning years they'd place more value on their time and purchase more non-food items, but that hasn't occurred and appears unlikely.
(b) It's expensive to carry a large selection of the same item, and online shopping/distribution centers provides an alternative option. If, for example, 80% of unit sales of ketchup go toward the lowest priced ketchup + the most popular brand, then it doesn't make sense to stock a dozen brands, and a half-dozen varieties of each brand. If somebody wants French's brand or No Salt Added Heinz brand, they can now order the product online and have it shipped to the store or their home. It just doesn't make sense for the product to take up valuable real estate - and a disproportionate amount of product will be tossed upon expiration.
(c) Unit sales of center store items continues to decrease. Unit sales of things like cereal, classic canned goods, etc. continue to decrease, as consumer preferences shift. To be fair, advances in technology and food preparation has largely made canned veggies, classic Campbell's soups, Chef Boyardee, canned chicken, etc. obsolete, so it's not surprising this is happening.
Amazon's concept grocery stores are suppose to tackle these points -- they're suppose to be aggressive on price, emphasize fresh food + ready-to-eat food, and offer selection limited to the most popular brands (with the option to purchase others online, for delivery). We'll see how it does...