Store design plays a significant role in keeping pace with today’s bakery, deli and convenience shoppers. With this in mind, a number of North America’s leading grocers are introducing new store concepts this year to respond to the ever-changing purchasing habits of consumers.
The highly anticipated 365 by Whole Foods Market will open the first-ever location on May 25 in the Silver Lake neighborhood of Los Angeles. Designed to complement the Whole Foods Market brand by bringing fresh, healthy food to a broader audience with a streamlined, quality-meets-value shopping experience, 365 by Whole Foods Market stores will feature a curated mix of products that adhere to the company’s industry-leading quality standards in an environment that’s fun and convenient for shoppers.
Silver Lake’s 365 by Whole Foods Market will host several “Friends of 365” through partnerships with by CHLOE., as well as Allegro Coffee Company and teaBOT, a new retail platform that provides custom grab-and-go tea in under 30 seconds. Friends of 365 is an opportunity for innovative businesses and entrepreneurs that align with the mission and quality standards of Whole Foods Market to establish their own independent retail spaces inside of 365 by Whole Foods Market stores.
Allegro Coffee Company will expand its coffee experience with the craft brew bar, serving customers with hot coffee, cold beer and a selection of food items. Toronto-based startup teaBOT will install an efficient self-serve kiosk, allowing customers to personalize tea by mixing up to three of 18 different teas and herbal ingredients.
Popular New York -based vegan restaurant by CHLOE. will offer guests a diverse menu of plant-based foods, including burgers, salads, market specials, pastas and sweets, that can be enjoyed in the restaurant, taken to-go or to a communal dine-in experience elsewhere in the store.
To provide shoppers with added convenience, 365 by Whole Foods Market stores will offer online ordering and delivery services through Instacart.
“With each store, we’re looking to curate a unique experience. Allegro’s craft brew bar will provide a casual place for Silver Lake residents to relax before or after they shop, while teaBOT’s unique service will offer a quick, yet deeply personalized tea-making experience,” says Jeff Turnas, president of 365 by Whole Foods Market. “We’ve really dedicated ourselves to partnering with like-minded companies that are doing new and interesting things in their respective field to bring a truly unique shopping experience that complements our thoughtfully curated selection of foods.”
Two additional 365 by Whole Foods Market locations will open in 2016, in Bellevue, Washington, and Portland, Oregon. Up to 10 stores are expected to open in 2017.
Turnas, a 20-year Whole Foods Market veteran, will serve as president of 365 by Whole Foods Market. Turnas, who has held various leadership positions on both the product and operations fronts, will be based at the company’s headquarters in Austin, Texas.
“We are excited to introduce 365 by Whole Foods Market to bring healthy foods to even more communities with a fresh, quality-meets-value shopping experience that’s fun and convenient,” Turnas says. “A modern, streamlined design with innovative technology and a carefully curated product mix will offer an efficient and rewarding way to grocery shop.”
“With each store, we’re looking to curate a unique experience.”
Jeff Turnas, president of 365 by Whole Foods Market
Kroger’s Community Concept
Another significant development in grocery store design involves The Kroger Co., which is testing a new community-focused grocery store concept called Main & Vine. The smaller-footprint format, with its first location in Gig Harbor, Washington, combines local, specialty and everyday products at affordable prices, according to Rodney McMullen, chairman and chief executive officer.
“It re-imagines the modern grocery shopping experience, placing in the middle of the store fresh produce and bulk items, along with an event center where shoppers can enjoy cooking demonstrations, food and beverage tastings and find a new recipe idea for dinner tonight,” McMullen says. “Customer feedback has been very positive.”
Main & Vine is part of the Cincinnati-based supermarket giant’s broader strategy in “trying different approaches to connecting with consumers,” McMullen adds. The store is designed to serve a customer segment that “we don’t think anybody out there is really serving.”
“As you know, we’ve had phenomenal success in natural and organic over the last several years, and we really see customers continuing to see that as important,” he says. “But with that said, there are certain items where the customer still wants to buy everyday stuff. And when you look at Main & Vine, what we’re trying to do is merge those two pieces but connect at a local level a little deeper than we normally would.”
Kroger continues to see sales growth in its Simple Truth and Simple Truth Organic lines of private label products. McMullen said Simple Truth line sales were approximately $1.5 billion in 2015, an increase from about $1.3 billion in 2014.
Describing the Main & Vine concept’s target consumer, McMullen said it is a shopper who is “overly influenced on speed and convenience for a dinner and a little bit more bent for natural and organic.” Kroger leveraged data from its 84.51? customer insights technology unit to determine which items to sell at Main & Vine, offering an expanded fresh assortment, local products such as coffee, cheese and bakery items, and a wide selection of natural and organic products under the company’s Simple Truth brand and national brands, such as Justin’s and Annie’s.
“Needless to say, there’s a lot going on at Kroger,” McMullen says. “We are creating a seamless experience for our customers, whether experimenting with new formats, driving digital engagement or launching new corporate brand products. We believe that combining Kroger’s culture of innovation with our culture of opportunity will continue to support our growth.”
One of the more subtle yet notable store design and merchandising trends of the year comes from Aldi Inc., which is introducing Healthier Checklanes in select stores. The discount grocery chain will stock single-serve nuts and trail mixes, dried fruits and granola bars at checkout instead of chocolates and candies. The company plans to roll out the program to its nearly 1,500 stores by the end of the year.
“By introducing Healthier Checklanes and through a number of other initiatives, we are doing our part to remove temptation at checkout and stocking stores with even more nutritious options,” says Jason Hart, chief executive officer of Aldi. “At Aldi, we truly care about our customers, and we’re responding with guilt-free checkout zones and increased food options they can feel good about.”
Beyond changes at the checkout, Aldi is taking other steps to broaden its better-for-you offerings. The company has eliminated certified synthetic colors, partially hydrogenated oils and added MSG from its exclusive food brands, which comprise more than 90 percent of products sold in Aldi’s stores. In addition to offering milk free of artificial growth hormones, Aldi’s yogurt, sour cream and cottage cheese will be made with milk that has no artificial growth hormones.
Additionally, the company said it is expanding its selection of fresh and organic meat and produce, adding more gluten-free products under the liveGfree brand, and adding more products free of more than 125 artificial ingredients under the SimplyNature brand. Other initiatives include highlighting nutritional facts on the front of exclusive brand food packages and partnering with registered dietitians to provide tips, recipes and meal-planning ideas for shoppers.
On the flip side, design trends among the larger supercenter formats involve a renewed focus on fresh. Target Corp., for instance, is focused on getting its food business in balance with opportunities for growth, according to Brian Cornell, chairman and chief executive officer.
“We’ve done deep dives into the business and we’ve been tearing down every category and every process,” he says. “What we quickly realized, the deeper we dug, the more fundamental challenges we found. Looking across categories, we found out our market share was out of balance. We were strongest in the categories with the least growth potential. Too much of our assortment is in the center of the store while the true growth opportunities exist around the perimeter. We found we were touching product far too often, driving up operational costs and complicating our out-of-stock position.”
In 2016, the company will continue to focus on showcasing more organic products and improving the freshness of each store’s product assortment.
“We are moving through the assortment item by item, starting in the fields and carrying it all the way to the sales floor,” Cornell says. “We are also focused on driving penetration with our own brands, including the newly relaunched Market Pantry. And we brought in a lot of external talent. They are also laser-focused on business basics. They are focused on assortment and pricing and promotion and presentation and they’ve zeroed in on those key seasonal moments when we absolutely need to shine.”
Initial efforts appear to be reaping dividends as the company’s comps in grocery have outpaced the rest of the store in both the third and the fourth quarter of 2015.
Findings from a new large-scale consumer study of more than 10,000 consumers conducted by Market Force Information reveals that Wegmans is America’s favorite grocery retailer, followed by Publix Super Markets and Trader Joe’s. This is the first time in four years that Trader Joe’s did not rank first.
For the rankings, Market Force asked participants to rate their satisfaction with their most recent grocery shopping experience and their likelihood to refer that grocer to others. The results were averaged to rank each brand on a Composite Loyalty Index.
Wegmans, founded in 1916, is known for its fresh produce, reasonable prices and massive stores. The Rochester, New York-based chain is expanding modestly, but steadily and winning over more devoted customers along the way. Its focus on employee training to ensure customers have the best experience has been a winning strategy that creates super fans eager for a new location to open near their home.
On a national level, shoppers are increasing seeking local and organic foods while grocery shopping. The Market Force study showed that 49 percent of consumers prefer to purchase organic items when given a choice. Produce, meat and dairy were the most frequently purchased organic products, followed by packaged canned foods, packaged dry foods and frozen foods.
As more shoppers are crunched for time, prepared foods continue to be a popular choice, with two-thirds indicating they purchased some form of prepared food from their grocer in the previous 30 days. Forty-three percent did so once a month, 19 percent once a week, and 8 percent twice a week or more. Convenience was overwhelming the most popular reason for purchasing prepared foods, but many also turn to pre-made foods as an alternative to dining out or because of the quality of food offered.
The most common types of prepared meals purchased were ready-to-eat main courses and ready-to-eat side dishes/appetizers/desserts. Ready-to-cook main courses and ready-to-cook side dishes/appetizers/desserts ranked third and fourth, respectively.
Market Force’s study found approximately half of consumers used a grocery app in the previous 90 days. The most prevalently used apps are those offered by specific grocers, while a nominal amount of consumers opt for third-party apps such as Checkout 51, SavingStar and Yummly. Consumers are primarily using apps to obtain coupons, followed by scanning barcodes, comparing prices and availability, and creating grocery lists.