Grocery Stores Shrinking for Success - NBC 7 San Diego

Grocery Stores Shrinking for Success

Experimenting with smaller footprint

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    The popular high end grocery chain Gelson's Market opened it's 25th store in San Diego. But the store is less than half the size of the last store they opened here. The Gelson's in Del Mar is nearly 50,000 square feet but the store in Pacific Beach is less than 18,000.

    "So we have to squeeze in all our bells and whistles into this smaller box," said Gelson's CEO Rob McDougall.

    The smaller box is called the "footprint" of the store.  That's the shoppable space inside a store, the area that people push their grocery cart.

    Whole Foods is opening up a series of smaller stores named "365".  The first just opened in the Silver Lake district of Los Angeles.  Many feel it is an attempt by Whole Foods to compete with smaller size stores like Trader Joe's.

    "The smaller footprint allows people today to kind of cherry pick where they want to go," said Miro Copic, marketing professor at San Diego State University.  He says it's cheaper for a chain to open smaller spaces and allows them to find locations where they couldn't establish a full retail store.

    "Customers need a larger store at different times," said Copic. "They like a smaller store for very specific things."

    The smaller Gelson's was largely dictated by the size of the store space, a former Haggen's and Albertson's.  But the company CEO says he sees more Gelson's adopting this compact design.

    "This has been a change for us as we continue to refine our model," said McDougall.

    German based Aldi has recently expanded into the Southern California area. It also sets up in smaller size footprints. Fresh & Easy attempted to do the same thing but failed.