Are big box retailers going too small with new store concepts?

Before the age of Amazon, “big box” stores were the category killers that created the destination locations to draw the masses. Today, the big retailers are focusing on shrinking stores. The downsizing trend begs the question:  How small is too small?   

Some of the recent trends toward small store footprints include:

  • Walmart is building 3,000 sq. ft. convenience stores called Walmart Fuel Stations.  Walmart has also tested 4,000 sq. ft. Walmart Pickup with Fuel formats. 
  • Target plans to have 130 smaller, urban format stores ranging in size from 20,000 to 40,000 sq. ft. by 2019.
  • IKEA’s typical stores are 300,000 sq. ft. but it’s opening smaller showroom locations – some under 10,000 square feet – in urban centers to reach city dwellers and supports online sales.
  • Nordstrom’s is piloting a 3,000 square feet location that carries no inventory for sale and focuses on service and engagement.
  • Finally, reports arrived last week that Amazon was setting a goal to open 3,000 AmazonGo locations – the first two have been 1,800 sq. ft. and 1,450 sq. ft. – by 2021.

Smaller stores are less expensive to open and fit in more neighborhoods while also more adaptive to customer’s varied omnichannel expectations particularly in the area of click and collect. 

  • Several key factors that make smaller stores possible and potentially more profitable:
  • Virtual shelf technology reduces the need for large inventory in store;
  • Click and collect also enables small stores to offer “unlimited” choices;
  • Convenient local locations foster click and collect customer traffic;
  • Small footprints reduce rents and enable more locations, particularly urban;
  • Small stores enable curating assortments to local consumers tastes and needs.

The most important trend in bricks and mortar retail right now is finding formats to “right size” the store platform to fit customer needs.

Walmart expands test of giant automated grocery kiosk

After a test in Oklahoma City last summer, Walmart is opening a second grocery pickup kiosk at a location in Sherman, Texas that enables customer to pick up orders without having to interact with a store associate.

Under the set up:

  • Orders are placed by customers who shop online or through their mobile browser at;
  • Walmart associates inside the store fill the orders;
  • The orders are organized in bins and placed in the massive kiosk located in the parking lot, which is equipped with refrigerators and freezers for perishable goods.
  • Customers pull up to the kiosk building, walk up to an interface station and scan the barcode they received with their “order ready” e-mail. The kiosk retrieves the order, delivering it to the customer in a process that takes a minute or less.

Customers are not charged extra but must spend at least $30 per order to use the service.

“Not only do customers not have to wait for an associate to bring them their order, but they also never need to set foot inside the store,” a Walmart spokesperson told Business Insider.

The Sherman kiosk, measuring 11-by-127-feet, is able to serve five customers at once, larger than the one in Oklahoma City that’s able to service two at a time.

Walmart has been investing heavily over the last year in a variety of pickup and delivery options. At the end of Q2, Walmart U.S. had more than 1,800 grocery pickup locations, more than 320 stores offering grocery delivery, and more than 325 pickup towers, which focus on general merchandise. Grocery delivery is expected to reach 40 percent of the U.S. population by year-end.

“Grocery pickup wait times continue to come down and our grocery delivery times are improving,” said Walmart CEO Doug McMillon. “We’re continuing to innovate with trials of self-driving cars in Arizona for our grocery pickup customers and automated picking capabilities for grocery pickup in our store in Salem, New Hampshire. Overall, our omni-channel initiatives are contributing to comp sales growth and providing customers with new levels of shopping convenience.”

Tesco could launch discount chain Jack’s next week

After plenty of speculation over a new brand in the works, Tesco is reportedly on the verge of launching its discount chain called Jack’s next week.

Named after Tesco founder Jack Cohen, Jack’s will focus on cut-price products as a clear competitor to Aldi and Lidl.

The first new store will be unveiled by Tesco chief executive Dave Lewis in Chatteris, Cambridgeshire next Wednesday, where journalists have been invited to a mysterious event at its previously shelved site.

Such is the secrecy around the launch that it’s believed Tesco has made staff and suppliers sign a non-disclosure agreement, and has said little officially in terms of its plans.

The news comes after Tesco was seen advertising for workers at new format stores in Wandsworth, Lincolnshire and Cambridgeshire.

One of the job ads for Tesco’s new stores reads: “The new retail format will be operated separately from the core Tesco business and as such benefits offered will be different from those offered at Tesco.”

Speaking to the Guardian, Shore Capital analyst Clive Black said he expected the Jack’s chain to consist of 100 stores, including around 60 of Tesco’s Metro format supermarkets.

It is believed that Tesco Metros in St Helens and Edge Hill, Liverpool are among those likely to be converted to the Jack’s brand.


Amazon Go store slated for New York City Inc. has set its sights on the Big Apple for one of its cashierless Amazon Go stores.

On Tuesday, Amazon confirmed plans to open an Amazon Go store in New York City. However, the company gave no timetable or details on the store and its location.

News of the planned store had surfaced when published reports said Amazon posted job listings related to an Amazon Go in New York.

Amazon now has five Amazon Go locations opened or in the works. Besides New York, the company has confirmed plans to open the high-tech convenience store concept in Chicago and San Francisco but, again, declined to provide details.

Three Amazon Go stores are already open in Amazon’s hometown of Seattle, and the third location — opening on Sept. 4, only about a week after the second — came as a bit of a surprise to retail industry observers.

The newest Amazon Go, at 300 Boren Ave. N. in Seattle, is the convenience retail banner’s largest so far at 2,100 square feet.

Offered at the store are ready-to-eat breakfast, lunch, dinner and snack options made by the retailer’s chefs as well as favorite local kitchens and bakeries. Customers also will find an assortment of grocery essentials, ranging from staple items like bread and milk to more indulgent fare like artisan cheeses and locally made chocolates.

And in line with the convenience focus, the store stocks an array of chef-designed Amazon Meal Kits, created to provide all the ingredients to prepare a home-cooked dinner for two in about 30 minutes.

As in the other Amazon Go stores, the e-tail giant’s “Just Walk Out” technology enables a checkout-free shopping experience. Shoppers use the Amazon Go mobile app to enter the store. Overhead cameras, weight sensors and deep learning technology detect merchandise that shoppers take from or return to shelves and keep track of the items selected in a virtual cart. When customers leave the store, the Just Walk Out technology automatically debits their Amazon account for the items they take and sends a receipt to the app.

All of the Seattle Amazon Go stores are corner locations. Amazon opened the first Amazon Go, an 1,800-square-foot unit at 7131 7th Avenue, to the public on Jan. 22. A 1,450-square-foot Amazon Go store opened its doors on Aug. 28 at 920 5th Avenue in downtown Seattle.