Specialty Food Magazine

JAN-FEB 2012

Specialty Food Magazine is the leading publication for retailers, manufacturers and foodservice professionals in the specialty food trade. It provides news, trends and business-building insights that help readers keep their businesses competitive.

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Page 35 of 159

THE NEW RETAIL LANDSCAPE B igger is not always the next big thing. Large retail chains and mass merchants are scaling down to fit into urban areas or to have a presence in locations that don't warrant a giant store. Fresh foods and higher-end selections are very much a part of the offerings in these smaller formats. Likewise, some national and regional drugstore chains are morphing into one-stop convenience stores with deli items, fresh to-go options, cheese platters and even beer counters. "Urbanization in America is a megatrend," says Ben Ball, senior vice president of Dechert-Hampe Consulting, a sales and marketing management consulting firm focusing on the consumer products and services industry, with offices in California, Chicago and Connecticut. "With more consumers moving to urban centers, retailers including drugstores and big-box stores are looking to capture the business of that consumer," Ball explains, adding, "and the independent finds new competition." SMALLER OFFSHOOTS Recent months have brought a slew of large chains and mass merchants developing smaller formats. At presstime, Tesco was about to open its first Fresh & Easy Express store concept, a smaller version of its Fresh & Easy Markets, a chain of 184 stores in California, Arizona and Nevada that launched in 2007. "In order to open stores in even more communities, we are trialing a handful of 3,000-square-foot stores," explains Brendan Wonnacott, spokesman for the company. The new format will debut in select southern California neighborhoods that currently are unable to accommodate the company's standard 10,000-square-foot markets. Fresh & Easy Express will offer the same amenities found at Fresh & Easy, just in a smaller footprint. Focusing on convenience and value, the mix will include an edited range of fresh fish, prepared meals, produce, meat and poultry, frozen foods, and daily staples. Walmart, too, is embracing an Express concept, launching convenience stores of about 5,000 to 10,000 square feet that feature fresh foods alongside health-and-beauty items and general merchandise. The first location opened in Chicago in July 2011; the company is currently testing markets with additional stores in Arkansas and Richfield, N.C. The deli offers hot rotisserie chicken and a variety of meats, cheeses and freshly prepared foods. Customers can even pick up cakes and fresh-baked bread in the bakery. Target is also paring down for certain communities with the new City Target concept scheduled to debut in Chicago in July 2012, and the company has plans to open other City Targets in Los Angeles, Seattle and San Francisco. The small-format store is a new brand for Target focusing more on urban dwellers' needs, and will offer an edited assortment with the retailer's best-selling merchandise. The company anticipates devoting space to grocery, but additional details on the initiative weren't set at presstime. Target has revealed, however, that upscale sandwich chain Pret A Manger will open a location within the Chicago State Street City Target, offering a selection of its fresh grab-and-go sandwiches, soups, salads, coffee and desserts. 34 ❘ SPECIALTY FOOD MAGAZINE ❘ specialtyfood.com DRUGSTORES EMBRACE FRESH Even pharmacies are making moves to capture the consumer with upscale fresh-food options. Duane Reade, which is owned by Walgreens, launched its fresh and prepared foods concept in Manhattan in March 2010 as a way to provide customers with better access to quality foods that include produce, bagged salads and wrap sandwiches. The New York Metro chain is continuing its strategy to add more prepared foods and is targeting local tastes— as evidenced by the debut of a beer bar in the Brooklyn store in January 2011. Duane Reade continued its high-profile launches last July, with a new 22,000-square-foot flagship store in Manhattan, complete with a 24-hour juice bar, sushi chef, fresh bakery counter and expanded offerings of natural and organic foods with produce, sandwiches and salads made daily. Walgreens began to offer fresh foods in some Chicago and New York stores in fall 2010. By January 2011 the drugstore chain announced plans to expand fresh food offerings to 400 stores, and beef up its presence in the food deserts of Chicago. The most recent test market has been San Francisco, where Walgreens launched fresh foods in 30 store locations, with items including wraps, sushi and fruits. The company has announced plans to convert or open at least 1,000 "food oasis" stores over the next five years as a way to address the need for greater access to healthy foods in underserved communities across the country, building on its successful 12-store pilot in Chicago. The Walmart Express format is designed for those on the go. The deli offers hot rotisserie chicken and a wide variety of meats, cheeses and freshly prepared foods. Customers can even pick up cakes and freshly made bread in the bakery. (continued on p. 125)

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