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New Retail on the Rise

By Mike Lauber - February 27, 2017

On Aug 4, 1930, a new concept in grocery shopping opened in Queens, NYC. King Kullen featured low prices and self-service, a concept that rapidly swept the nation.

From the end of WWII to the end of the 20th century, the primary way grocery stores changed was simply by square feet. I remember growing up in the late 1960’s/early 1970’s and saw our local McArdle’s IGA go from perhaps 12,000sf to maybe 40,000sf in three successive buildings over the span of only a decade. That same scenario played out across the nation as Baby Boomers wanted fed and brand marketers grew to meet the demand. Grocers became supermarkets which led to supercenters and warehouse stores in the bigger-is-better race.

Bigger reached its limit since the Great Recession in part because shoppers seem less interested in one-stop shopping and more interested in finding the best deal. For one shopper, “best deal” might mean lowest price; for another, most convenient; for another, it might be freshest or coolest or most unique.

Trader Joe’s stores fill old, smaller grocery store buildings, 365 by Whole Foods are quasi-convenience stores and Aldi’s is winning the private label, limited selection battle. People are buying staples at Kroger, bread at a local bakery, coffee at Starbucks, produce from a farmers’ market and beer from Burial Beer. In some ways, we’re reverting to buy from specialists, not one-size-fits-all megastores with all the same stuff.

Online shopping fits neatly into this pattern too as boutique e-tailers cater to narrow, specific tastes. Want greater convenience for items you predictably buy all the time? Amazon Subscribe and Save will make sure those diapers or paper towels show up just when you expect to need more.

Retail has never been more diverse, dynamic and challenging. Merchandising in those spaces takes nimbleness and specialized skills. The risks and rewards are high for marketers and retailers alike.