Meijer thinks small with a new urban concept store

Dive Brief:

Meijer will begin construction this summer on Bridge Street Market, a 30,000-square-foot store in downtown Grand Rapids, MI, according to MLive. The location will open fall 2018.
The one-off store will focus on fresh products, and will anchor a $60 million mixed-use development spearheaded by Rockford Construction, Meijer’s longtime contractor.
Meijer calls the new store "the first-of-its-kind in the region and a unique retail model intended to deliver a convenient, fresh neighborhood grocery option for those who live, work and play in the area."

Dive Insight:

Meijer has made its name as a big-box company that operates in suburban areas. So how will the retailer fare with an urban format that’s less than a quarter the size of its average store?

Industry observers got one answer to that question earlier this year, when the company shuttered its two Meijer Marketplace stores. The locations, which were less than half the size of a typical Meijer, opened in 2011 and were touted as “dramatic step” by CEO Hank Meijer. But customers just couldn’t get excited about a mini-supercenter experience. Likewise, a 102,000-square-foot company store that was built in 2010 in Niles, IL closed last year.

Meijer had once envisioned these smaller stores as a way into profitable urban markets. But they were still too big to operate in most U.S cities. And although they were much smaller than a typical Meijer, the stores were twice the size of an average supermarket.

With its Bridge Street Market concept, Meijer joins a growing number of retailers, including Hy-Vee and Niemann Foods Inc., building one-off stores that are quite different from the companies’ core offerings. Fourth + Vine, Hy-Vee’s new store in downtown Des Moines, features such trendy offerings as a custom soda fountain, a large wine cellar, and a sushi bar.

Retailers are eager to crack the urban market, where a high concentration of affluent consumers can make for attractive profits. But securing real estate and adjusting to the new market can be a challenge. In Meijer’s case, the big-box operator is shrinking way down and focusing on fresh grocery. Will it succeed? The only thing certain at this point is that the store will be a major departure for a retailer used to thinking big.