Grocery Innovation

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US Grocery Innovation: Store Formats

While there was limited preexisting information to fully answer your question, I used the available data to pull together key findings: I was able to find that craft beer tastings and in-store restaurants were the two most innovative additions to grocery stores. Unfortunately, most information published about speculated ideas were related to technology. Below, you'll find an outline of our research methodology, as well as a deep dive into our findings.

METHODOLOGY

I conducted an exhaustive search of grocery store websites, market reports, white papers and trusted media sites. Unfortunately, most information published was regarding the current trends in store formats; however I did find the speculation of mini-food courts. In order to make this research as most comprehensive as possible I was forced to use sources from 2015-2018, due to limited newer information available. Below are a deep dive of my findings.

GROCERY STORE PSYCHOLOGY

According to the most recent study conducted by the University of South Carolina, location and color are two key elements to designing a store format to optimize profit. The study revealed that products placed at ends of the aisles and at eye level delivered the most profits. The study also concluded that color carries a symbolic meaning and can impact consumer judgment. The complete findings of this study can be viewed, here.

ALDI'S MAZE-LIKE STORE FORMAT AND UNUSAL ITEMS

Aldi introduced a new tactic to the layout playbook — an "ever-changing section of special items not usually found during a grocery shopping expedition." The store has a maze-like design that features unusual products in the center of its stores. In order to get to these items customers are "encouraged to weave their way through aisles of other items that might tempt them along the way."

CRAFT BEER

Craft beer tasting is one of the newest innovative methods to drive revenue and profitability. In my research I was able to find numerous stores that have jumped on this innovative trend and have listed case examples below:

- Lucky's Markets offer customers $2 beers while they shop.

- A Whole Foods, located in Houston, "has its own microbrewery promotes it with a keg-equipped beer bike offering quaffs to thirsty customers."

- Lowe's Food has in-store beer dens and holds pint nights every Friday night to attract crowds. Once customers are in the store, they are likely to spend.

- Kingma’s, as an innovative way of attracting customers, offers over "400 beers along a 28-foot wall of beer," and hosts wine and beer tastings every weekend.

IN- STORE RESTAURANTS

Grocery stores are adding in-store restaurants, sometimes known as "groceraunts" as an innovative method of attracting millenials. Many of these restaurants include full-wine walls and numerous beers on tap. Examples include Whole Foods which as been offering sit-down dinning and drinking areas for years.

According to the NPD Group, "Goceraunts fall in line with the uptick in prepared store meals, which has grown 30 percent since 2008 and driven $10 billion in sales last year."

Market Grille, "the restaurant at a Hy-Vee grocery store in Columbia, Mo.", offers all meals being prepared with fresh ingredients directly from the store. Manager, Kyle Riggs stated that "football games can pack the 148-seat restaurant with college students and young professionals."

According to Josh Onishi, president and CEO of Peace Dining Corporation, “The next step in the grocerant phenomenon is putting several grocerants within the supermarket, like a mini food court. This creates a powerful magnet attracting shoppers to enjoy the experience of shopping at your store.”

OTHER FINDINGS

- Whole Foods in both Denver and Centennial both offers massage parlors in-store. (The Body Tree Massage)

- Sushi bars offer minimal profits for grocery stores, there are provided to attract customers into the store so they will buy additional items.

CONCLUSION

In-store restaurants and craft beers appear to be the two newest and innovative trends in grocery store lay-outs. Future speculation talks of mini-food courts inside grocery stores. I hope you find this helpful!

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