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Shrinking grocery stores and other retail trends to watch

Shrinking grocery stores and other retail trends to watch

Canada's Globe and Mail recently claimed that a new trend has emerged in grocery retail: shrinking stores.

Why am I having trouble believing this news?

Maybe it's because when I braved Costco for the first time in my life a few weeks ago, I had to circle the parking lot a few times before landing a parking spot. And as I waited in the checkout line, I had time to leave my cart in order to leisurely browse and select a few boxes of CLIF and Lara bars (not to mention do a few yoga poses) before I met the cashier's eyes.

Or maybe it's because one of the four Whole Foods Markets in the Boulder, Colo. area is expanding from something like 40,000 square feet to more than 70,000 square feet.

On the other hand, Walmart did announce recently that it will open 30 to 40 medium- and small-sized stores, ranging from 30,000 to 60,000 square feet, in urban areas next year. These stores apparently will be customized to the tastes of specific neighborhoods.

I can't say I'd be disappointed if supersized stores lost the extra baggage—not necessarily to serve up more prepared food as the Globe and Mail claims customers are demanding but to focus on quality over quantity, as well as customer service.

But the small store won't be the only next big thing? So too will these retail types:

Online stores. Although less than 1 percent of food and beverage sales occur online today, the figure is expected to double by 2013, according to the New York–based Nielsen Co.

Drive-thru and pickup service. Many retailers, from Wal-Mart to ShopRite, offer pickup service. And it doesn't have to cost an arm and a leg. Once an ordering system is in place, all you need is a dedicated place in your store for customer pickup. Then, you can bank on a boost in sales, from both the typical "convenience fee" and from the increase in customers.

Delivery service. FreshDirect in New York perhaps brought this service back from the dead. Others are now jumping on board. You should consider the leap too. Delivery can help distinguish neighborhood stores—yes, those smaller sellers—from the big-box chains.

NFM will be covering these trends and more in an upcoming issue.

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