Whole Foods Shrinks To Serve Shoppers' Needs

Whole Foods is looking to expand more widely by shrinking itself down. The Amazon-owned supermarket chain has announced that it will open its first small-format location in New York City this year, called Whole Foods Market Daily Shop. This grocery store be much smaller than the standard Whole Foods footprint: while the typical store averages 40,000 square feet, Daily Shops will range from 7,000-14,000 square feet and feature a limited selection of on-the-go options.

Since this new grocery store concept is smaller, it'll offer less overall selection; Bloomberg reports the new locations will not feature meat counters, nor any of the self-serve buffets of the traditional outlets. Instead, the Daily Shops will, according to the press release, sell "an ample selection of fresh, seasonal produce, meat and seafood, prepared foods like sandwiches and pre-packed meals, breads, alcohol, and supplements, as well as a handpicked range of local specialties and our own 365 by Whole Foods Market brand."

It's all in the name of convenience and speed. "The introduction of home delivery has changed customers' mentality," Christina Minardi, executive vice president of growth and development, told Bloomberg. "People want things fast."

In an urban market like New York, giant amounts of retail space can be hard to come by, and smaller stores require less time to get up and running. The shops will be staffed by cashiers, but also have self-checkout stations along with Amazon's palm-scanning payment service (called Amazon One).

If this concept sounds somewhat familiar, that's because Whole Foods opened a chain of smaller locations back in 2016. Those were called 365 by Whole Foods Market, and they mainly focused on house-brand (aka generic) products, which are priced lower than name-brand goods. The 365 stores were each around 25,000 square feet and served hot food, unlike the upcoming Daily Shop locations.

Only nine 365 stores operated in in total, and the experiment of wooing price-conscious shoppers ended in 2019; those storefronts eventually converted into full Whole Foods Market locations. Whole Foods Market Daily Shop already has five locations planned in New York City, and should those prove successful, the company plans to expand the concept outward to other city markets.

"We're excited to introduce a new way for our customers to quickly pick up their Whole Foods Market favorites—from grab-and-go meals to that last-minute dinner ingredient—making the early morning or after work grocery trips more efficient and enjoyable," Minardi said in the press release. "Expanding our footprint with Whole Foods Market Daily Shop is key to our growth, fostering deeper customer connections, and advancing our purpose to nourish people and the planet."

Considering a traditional convenience store has an average footprint of 2,500 square feet, we'll see if Whole Foods' "Goldilocks zone" approach to grocery shopping will resonate with a customer base that's not quite into roller hot dogs but doesn't want to cook, either. Who knows? Maybe an organic hummus wrap and some turbo grocery shopping is just what Manhattanites are looking for.