July 16, 2008
Jewel Tests Urban Fresh Concept
Jewel-Osco, a division of Supervalu, is the latest chain to test a small store concept that it hopes will speak to the needs of urban consumers in tony neighborhoods, including Chicago’s Lincoln Park.
The new format, dubbed Urban Fresh, by Jewel, focuses on fresh foods and ready-to-go meals for busy consumers à la Fresh & Easy, Safeway and Walmart.
“The smaller-format store is an exciting complement to our larger, more traditional grocery stores,” said Keith Nielsen, president of Jewel-Osco, in a company press release. “We hope to learn as much as possible from the effort, paying close attention to customer feedback, so we can deliver the best experience for our shoppers.”
Unlike big boxes that have gotten a less than friendly reception by Chicago’s elected leaders and labor officials, the new Urban Fresh store is drawing praise.
“The store will be a welcome addition to the community,” said Alderman Scott Waguespack (32nd). “Everyone is pressed for time these days and the store will make life a little easier for our residents.”
Discussion Questions: Has store size become a more important factor within the consumer hierarchy in determining where to shop? Does a format being tested by Jewel-Osco in the Lincoln Park area of Chicago give you more or less confidence that it will succeed than other small store concepts tested by merchants in other communities?
BrainTrust
Recent Discussions
Discussion Questions
Poll
The Chicago Sun-Times reports this is the former Sunflower Market location, 1910 N. Clybourn.
Urbanites want to get in, get what they want, and get out. So the Urban Fresh idea, as long as it is executed well, should be a hit.
Supervalu’s Jewel banner in Chicagoland has faced some bruises in recent years. Now with SuperLow Foods and Aldi more than nipping at their feet, they needed something that would be a market trendsetter, and shoot the first salvo before Fresh&Easy invades the Windy City.
Chains such as A&P with its SuperFresh banner have opened these smaller footprints in urban downtowns with great success.
Smaller can be better when it is strategically placed, and offers a wide selection of prepared foods at reasonable prices.
With high gasoline prices, consumers are not as likely to drive to the “big store” if they can find what they need at a neighborhood store. The challenge is to ensure that the goods and services available at the neighborhood store are what the consumers in that neighborhood want.
The major grocery retailers in the UK have been successfully using the small store format in urban areas for years. Like Jewel, they offer fresh produce a small selection of meats/poultry/fish, prepared foods and items that shoppers typically buy with great frequency. Asda, Tesco and Sainsbury initiated this format when they could not acquire space at the necessary price point for their regular super/hypermarkets.
If Jewel can anticipate consumer needs, offer products at a reasonable price and provide fast, efficient, friendly service, this could be a strong addition to their business.
If I am correct, isn’t this the location of the Sunflower Market shuttered by Supervalu a few months ago? I assume they are “re-opening” this smaller Jewel in the former location.
Also, as a retail designer, I have really enjoyed visiting the remodeled Jewel stores. I believe the design was originally designed by Albertsons and rolled out now by Supervalu. It looks very contemporary and fresh.
Can anyone add some light to this matter?
Formats that match up well with trip needs and lifestyles of neighborhood shoppers will succeed. If the average household uses 350 SKUs, why would we want to spend time browsing stores with 60,000 items?
Every urban neighborhood, including Chicago’s Lincoln Park, has its own fingerprints. To serve consumers well in such areas requires providing a combination of factors important to the residents therein such as convenience, economics and products and services that comfortably embrace the “fashion of the neighborhood.”
The success of these ‘smaller’ footprint stores located in urban and even niche specific neighborhoods reflects many factors. The most dominating factor may be the lack of time (and in many cases, patience) consumers have these days. It’s long been predicted that as baby boomers age the lure of big box stores will begin to fade. How many people 45 and older want to trek around the 100,000 square foot store looking for the hot sauce? Less time shopping = a better lifestyle for more and more consumers.
The smaller size achieves many things for grocers; the ability to get back into increasingly important urban areas, SKU reduction (which they can’t seem to do very well otherwise) and a better “fresh” presence being the three most important.
The question going forward will be labor. These stores, when done right, are much more labor intensive than the old “stack-em-high-let-em-fly” ops model. BUT…if the labor model proves out, everyone’s really got something here…everyone being consumers and retailers.
(Thanks Geoff)
I’m generally a fan of the recent trend toward neighborhood grocery stores that fit into smaller spaces, so I look ahead to this opening with some anticipation.
For a large operator like Supervalu, getting the Urban Fresh concept right may take some investment and learning. It’s more than a convenience store, but less than a conventional supermarket. And I think the formula will need to flex to fit local neighborhoods.
Next question we should all ask is: “What will this store stand for in the minds of consumers?” If the answer comes close to “the food store that fits me and my urban lifestyle,” they may be onto something.
(Oh–and for Bernice and others: I interpret “tony” to mean upscale and fashionable, as in “high-toned”.)
The reduction in size of the store clearly will have an impact on the shopping experience from a customer logistic perspective (navigating the box) but this should also provide the retailer with an opportunity to develop key learning in how to fine tune their assortments to meet the needs of the local market.
Since the smaller footprint will likely create more candidates for future site locations, by default this will also require the retailer to re-define and rationalize their assortments, potentially on a store-by-store basis. The sooner retailers come to grips with the reality that the one-size-fits-all merchandising plans of the past really don’t fit anyone well, the better.
Who knows, maybe we’ll soon see more “urban focused” retailers opening stores in this “final frontier” of retail growth by proving that you really can have improved financial results in these locations when merchandised correctly. No more carrying too much of the wrong product in the wrong store locations, along with higher margins from selling more of what the urban consumer wants at a higher price point due to better overall sellthroughs.
Novel concept, ain’t it?
The small store market is ripe for takeover! This has been controlled by many of the mom and pop c-stores for years, and it really needs to reflect the efficiencies and price management that a larger store chain can bring, without the presence of a distributor/middleman to increase the prices 20-30+%. This is one of the next phases of American retailing that offers an easy line extension for all of the major grocers to grow into, while increasing their sales and often their margins, at little to no additional cost.
Outside of Minnesota, Supervalu doesn’t have much of a successful track record of creating successful retail formats. The last small store format, Sunflower, was a disaster and closed. Maybe by changing the sign to Jewel, and rearranging the store a bit, they might do better.
Walmart and Safeway have yet to be tested. Fresh & Easy stunned us all with their failure. No one expected they would be performing as poorly as they are.
Aldi does great with their small format, however, no one in the USA is coming close to them in pricing. If you are going to be successful with a small store format, then the store will need to be a leader in some area of operations. Otherwise you will end up with cute little ghost towns like Fresh & Easy.
Maybe American shoppers are being hit by choice fatigue. I know that I am now used to smaller stores here in the UK. Even our so-called bigger stores are a whole lot smaller than your average sized ones. And I avoid them like the plague. When my favourite, regular, supermarket moved to larger premises it took me quite a while to get used to it. I still kinda wish they hadn’t done it. The larger branches incur larger problems for staff and customer alike. I wonder how much head offices think about that when they look at their balance sheet and just think about potentially increased revenue by getting more people buying more stuff. Possibly the higher levels of both irritation and wastage don’t get included in the calculations and they may not even know if they get different shoppers because they have lost some who prefer the smaller stores.
And by the way, what is a tony neighborhood?
I agree with Johnny. When you observe success in smaller formats, you’ll see that the operators eschewed rigid store design prototypes and standard assortments. Yet, while the stores are smaller, the the winners in this space are all big chains with deep pockets. They need the buying power and state of the art STORE LEVEL data that only big chains can afford. Chain-wide aggregated data is useless in this format. Each location’s POS must inform new product offerings and drive replenishment door by door. Central planograms are a prescription for death. With all due respect to Kraft, its pasta sauce has never sold in Italian neighborhoods, yet it still takes up space on chain store shelves because of standardized national agreements. Tesco is very good at fine tuning store design and assortments with local store data in its Fresh & Easy concept. They are fact-based decision makers. Some smaller, urban Whole Foods locations also demonstrate excellent assortment diversity based on local demand. Sobeys Express is a good sleeper too. The $15B Canadian chain’s 4000 sf format is entering urban in-fill neighborhoods that their big-format competitors can’t touch. Their British-trained CMO has also been credited with part of their success.
The essence of this concept is acting locally, down to the SKU level. No more forced orders and blind auto-replenishment. True retail is local. Store design and services should follow better site analysis. The tools are available to do this efficiently if retailers are willing to be responsive to readily available store-level data and equally available GIS location research. The real merchants are in the stores, not head office.
Enough testing. This concept is fully battle tested. Get on with it!
Small footprint = modest gross sales/location = modest compensation for the location manager = higher management turnover = poorer customer service. One big-box advantage: they can afford to pay their managers decently. So can warehouse clubs and high-volume supermarkets. Small footprint locations can’t afford higher-priced managers, unless they’re high-end luxury stores.
More Discussions
As Boomers ‘Age Out of Peak Purchasing,’ How Can National Brands Retain Interest With Gen Z?
According to a recent First Insight study titled “Is Gen Z Still Choosing Your Brand,” while…Is Supply Chain Volatility Here To Stay?
Can we expect an ongoing volatility to remain in terms of retail supply chain?Has Same-Day Delivery Become an Expectation Across Retail?
Are expectations around retail delivery speed in flux?
The Chicago Sun-Times reports this is the former Sunflower Market location, 1910 N. Clybourn.
Urbanites want to get in, get what they want, and get out. So the Urban Fresh idea, as long as it is executed well, should be a hit.
Supervalu’s Jewel banner in Chicagoland has faced some bruises in recent years. Now with SuperLow Foods and Aldi more than nipping at their feet, they needed something that would be a market trendsetter, and shoot the first salvo before Fresh&Easy invades the Windy City.
Chains such as A&P with its SuperFresh banner have opened these smaller footprints in urban downtowns with great success.
Smaller can be better when it is strategically placed, and offers a wide selection of prepared foods at reasonable prices.
With high gasoline prices, consumers are not as likely to drive to the “big store” if they can find what they need at a neighborhood store. The challenge is to ensure that the goods and services available at the neighborhood store are what the consumers in that neighborhood want.
The major grocery retailers in the UK have been successfully using the small store format in urban areas for years. Like Jewel, they offer fresh produce a small selection of meats/poultry/fish, prepared foods and items that shoppers typically buy with great frequency. Asda, Tesco and Sainsbury initiated this format when they could not acquire space at the necessary price point for their regular super/hypermarkets.
If Jewel can anticipate consumer needs, offer products at a reasonable price and provide fast, efficient, friendly service, this could be a strong addition to their business.
If I am correct, isn’t this the location of the Sunflower Market shuttered by Supervalu a few months ago? I assume they are “re-opening” this smaller Jewel in the former location.
Also, as a retail designer, I have really enjoyed visiting the remodeled Jewel stores. I believe the design was originally designed by Albertsons and rolled out now by Supervalu. It looks very contemporary and fresh.
Can anyone add some light to this matter?
Formats that match up well with trip needs and lifestyles of neighborhood shoppers will succeed. If the average household uses 350 SKUs, why would we want to spend time browsing stores with 60,000 items?
Every urban neighborhood, including Chicago’s Lincoln Park, has its own fingerprints. To serve consumers well in such areas requires providing a combination of factors important to the residents therein such as convenience, economics and products and services that comfortably embrace the “fashion of the neighborhood.”
The success of these ‘smaller’ footprint stores located in urban and even niche specific neighborhoods reflects many factors. The most dominating factor may be the lack of time (and in many cases, patience) consumers have these days. It’s long been predicted that as baby boomers age the lure of big box stores will begin to fade. How many people 45 and older want to trek around the 100,000 square foot store looking for the hot sauce? Less time shopping = a better lifestyle for more and more consumers.
The smaller size achieves many things for grocers; the ability to get back into increasingly important urban areas, SKU reduction (which they can’t seem to do very well otherwise) and a better “fresh” presence being the three most important.
The question going forward will be labor. These stores, when done right, are much more labor intensive than the old “stack-em-high-let-em-fly” ops model. BUT…if the labor model proves out, everyone’s really got something here…everyone being consumers and retailers.
(Thanks Geoff)
I’m generally a fan of the recent trend toward neighborhood grocery stores that fit into smaller spaces, so I look ahead to this opening with some anticipation.
For a large operator like Supervalu, getting the Urban Fresh concept right may take some investment and learning. It’s more than a convenience store, but less than a conventional supermarket. And I think the formula will need to flex to fit local neighborhoods.
Next question we should all ask is: “What will this store stand for in the minds of consumers?” If the answer comes close to “the food store that fits me and my urban lifestyle,” they may be onto something.
(Oh–and for Bernice and others: I interpret “tony” to mean upscale and fashionable, as in “high-toned”.)
The reduction in size of the store clearly will have an impact on the shopping experience from a customer logistic perspective (navigating the box) but this should also provide the retailer with an opportunity to develop key learning in how to fine tune their assortments to meet the needs of the local market.
Since the smaller footprint will likely create more candidates for future site locations, by default this will also require the retailer to re-define and rationalize their assortments, potentially on a store-by-store basis. The sooner retailers come to grips with the reality that the one-size-fits-all merchandising plans of the past really don’t fit anyone well, the better.
Who knows, maybe we’ll soon see more “urban focused” retailers opening stores in this “final frontier” of retail growth by proving that you really can have improved financial results in these locations when merchandised correctly. No more carrying too much of the wrong product in the wrong store locations, along with higher margins from selling more of what the urban consumer wants at a higher price point due to better overall sellthroughs.
Novel concept, ain’t it?
The small store market is ripe for takeover! This has been controlled by many of the mom and pop c-stores for years, and it really needs to reflect the efficiencies and price management that a larger store chain can bring, without the presence of a distributor/middleman to increase the prices 20-30+%. This is one of the next phases of American retailing that offers an easy line extension for all of the major grocers to grow into, while increasing their sales and often their margins, at little to no additional cost.
Outside of Minnesota, Supervalu doesn’t have much of a successful track record of creating successful retail formats. The last small store format, Sunflower, was a disaster and closed. Maybe by changing the sign to Jewel, and rearranging the store a bit, they might do better.
Walmart and Safeway have yet to be tested. Fresh & Easy stunned us all with their failure. No one expected they would be performing as poorly as they are.
Aldi does great with their small format, however, no one in the USA is coming close to them in pricing. If you are going to be successful with a small store format, then the store will need to be a leader in some area of operations. Otherwise you will end up with cute little ghost towns like Fresh & Easy.
Maybe American shoppers are being hit by choice fatigue. I know that I am now used to smaller stores here in the UK. Even our so-called bigger stores are a whole lot smaller than your average sized ones. And I avoid them like the plague. When my favourite, regular, supermarket moved to larger premises it took me quite a while to get used to it. I still kinda wish they hadn’t done it. The larger branches incur larger problems for staff and customer alike. I wonder how much head offices think about that when they look at their balance sheet and just think about potentially increased revenue by getting more people buying more stuff. Possibly the higher levels of both irritation and wastage don’t get included in the calculations and they may not even know if they get different shoppers because they have lost some who prefer the smaller stores.
And by the way, what is a tony neighborhood?
I agree with Johnny. When you observe success in smaller formats, you’ll see that the operators eschewed rigid store design prototypes and standard assortments. Yet, while the stores are smaller, the the winners in this space are all big chains with deep pockets. They need the buying power and state of the art STORE LEVEL data that only big chains can afford. Chain-wide aggregated data is useless in this format. Each location’s POS must inform new product offerings and drive replenishment door by door. Central planograms are a prescription for death. With all due respect to Kraft, its pasta sauce has never sold in Italian neighborhoods, yet it still takes up space on chain store shelves because of standardized national agreements. Tesco is very good at fine tuning store design and assortments with local store data in its Fresh & Easy concept. They are fact-based decision makers. Some smaller, urban Whole Foods locations also demonstrate excellent assortment diversity based on local demand. Sobeys Express is a good sleeper too. The $15B Canadian chain’s 4000 sf format is entering urban in-fill neighborhoods that their big-format competitors can’t touch. Their British-trained CMO has also been credited with part of their success.
The essence of this concept is acting locally, down to the SKU level. No more forced orders and blind auto-replenishment. True retail is local. Store design and services should follow better site analysis. The tools are available to do this efficiently if retailers are willing to be responsive to readily available store-level data and equally available GIS location research. The real merchants are in the stores, not head office.
Enough testing. This concept is fully battle tested. Get on with it!
Small footprint = modest gross sales/location = modest compensation for the location manager = higher management turnover = poorer customer service. One big-box advantage: they can afford to pay their managers decently. So can warehouse clubs and high-volume supermarkets. Small footprint locations can’t afford higher-priced managers, unless they’re high-end luxury stores.