Grocers Try Mid-Size Stores on for Size
By Teresa F. Lindeman, Pittsburgh Post-Gazette
May 4–It’ll be interesting to see what Harmar shoppers think of their new Giant Eagle store that opens today — or, to be more accurate, their new Giant Eagle Express.
The O’Hara grocer is hoping the prototype will fill that gaping space between the mammoth super grocery stores and the pert convenience stores that do the gas, milk and sandwich thing. Tucked into a prime spot by Route 910 and Freeport Road, the new place is 14,000 streamlined square feet packed with produce, a deli, a drive-thru pharmacy, a free Wi-Fi cafe, a DVD rental machine, a prepared foods area with heat-and-serve meals and a bakery that can handle birthday cakes.
Express customers also can sign up to receive text messages on their cell phones alerting them to dinner specials. Eventually, they might get alerts when fuel prices change at the GetGo gas station out front. “We want this to be your neighborhood store,” said Brett Merrell, Giant Eagle’s vice president of marketing.
The in-between size of this “new” concept will likely seem familiar to anyone who did any grocery shopping before the era of the mega store. Smaller groceries used to be tucked into city neighborhoods and small towns across the country. Many closed when bigger grocers — that now would be considered mid-sized — moved in, only to be dwarfed in turn when even bigger supermarkets and supercenters became the rage.
Now, some of those communities that have done without a nearby grocery offer prime opportunities for the nation’s supermarkets to grow — if they can figure out how to do smaller stores well.
Giant Eagle isn’t the only one making the attempt. United Kingdom grocer Tesco plans to open its first 10,000-square-foot Fresh & Easy stores on the West Coast later this year. News reports last month indicated Wal-Mart might open 20,000-square-foot stores in urban areas. Even the local, independently owned Shop ‘n Save stores, which vary in size, are positioning themselves as just the right size — not too big or too small.
“That’s really a trend,” said Dan Graham, vice president of the California office of Dechert-Hampe & Co., a management consulting firm. As much as the store size, the trend is about the occasions that drive people to hunt for food, he said.
The monthly pantry stocking shopper is looking for something different than someone who just needs a gallon of milk. Then there’s the in-between shopper who needs a few things but doesn’t want to wander down long aisles trying to find the peanut butter.
The typical supermarket carries at least 30,000 individual items, according to Herb Sorensen, global scientific director specializing in shopper insights at TNS Sorensen. The typical household only buys about 300 of those per year, many of them again and again.
He thinks Tesco officials see room for lots of smaller stores to serve customers who want to get in and out quickly. And if consumers go in there to pick up flowers, dinner and something from the deli, they’ll be helping the grocer by purchasing things that tend to have higher profit margins.
Giant Eagle shares ideas with Tesco as part of a group of retailers who don’t compete but can help each other. Company officials said this new prototype isn’t patterned specifically off any particular store although some of the pieces are being tried elsewhere.
Company officials envision the Giant Eagle Express, which is about the size of three 4,500-square-foot standalone GetGo stores, serving two types of time-pressed customers. The first would be local residents on a smaller grocery run while the second would be people who didn’t plan dinner and need to serve something.
Giant Eagle is quite interested in a study by food company Unilever that found 77 percent of dinners are made at home but, on average, the cooks have just 12 minutes to make them.
A central kitchen at one of the grocer’s bigger Market District stores will send over items daily, said Giant Eagle’s Merrell. His list of potential meals included grilled lemon garlic chicken with rice pilaf and hot sausage with penne pasta, both packed either for a single serving or a dinner serving two to three people. The store also makes panini sandwiches to order.
Harmar was a good place to test the new format not just because Target decided to take space formerly occupied by an Ames store as well as a 30,000-square-foot Giant Eagle. The site also happens to be near the Pennsylvania Turnpike, which could draw workers who need to pick up supper in the rush home.
In the early planning stages, local officials expressed concern about the loss of the bigger store. Giant Eagle executives hope everyone will be surprised at how much they’ve managed to pack into a small space. In addition to all the fancy stuff, there’s several different kinds of Tide detergent and organic milk as well as 90 specialty cheeses and value-priced basics such as Valu-Time sugar.
Smaller, two-tiered shopping carts reflect the tight dimensions. The checkout stations — none of which allows self-checkout — will be divided between those devoted to hurried GetGo customers and those for shoppers with larger loads.
The company’s goal is to take this format and use it in numerous locations but that only works if officials get it right. Plans call for interviewing shoppers and training employees to pay attention to feedback.
A second Express store could open later this year, although the company won’t identify potential sites. Last fall, talk of a location in Manchester surfaced at a meeting of the city’s Urban Redevelopment Authority. “We’re actively evaluating multiple sites,” said Rob Borella, Giant Eagle’s senior director of marketing and corporate communications.
Like supermarkets all over the country, Giant Eagle’s experiments have been aimed in part at fending off competition from warehouse operators, drugstores, niche grocers such as Whole Foods and Aldi, as well as anyone else serving up dinner.
The region’s dominant grocer’s next steps could include adding in-store health clinics later this year, an area that competitors such as Wal-Mart also are moving into.
—–
To see more of the Pittsburgh Post-Gazette, or to subscribe to the newspaper, go to http://www.post-gazette.com.
Copyright (c) 2007, Pittsburgh Post-Gazette
Distributed by McClatchy-Tribune Information Services.
For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
TSCDY, TSCO, WMT, SVU,