Stores within stores: Deal centers are the right fit

February 21, 2011

Can stores within stores enhance the larger format? Yes, if they address today’s most compelling consumer needs.

Trips and traffic are the currency of retail. The big box isn’t as appealing as it once was, as time-crunched shoppers tire of walking hundreds of feet for a gallon of milk or chicken breasts.  

Supermarkets have sensed this for a while. Some tried to place convenience stores under their roofs to attract Quick Trips. Others tried drive-thrus. Few of these efforts became big consumer wins in their markets.  

What should supermarkets do today to get customers in their doors, differentiate their offers, and deliver the values people have been so insistent on since the recession threw American household budgets into turmoil? They should infuse some of the excitement and savings that shoppers have grown addicted to at limited-assortment discounters such as Aldi, Save-A-Lot and Grocery Outlet, we believe at The Lempert Report.

Why not? Shoppers want savings and value today. This priority shapes every purchase decision. So why not huddle up the store operations teams with marketing strategists and figure out how to give people what they want most. This is well within buyers’ capabilities. A defined section of the store that screams value with opportunistic buys doesn’t cheapen the rest of the store, and it could expand a shopper base and build trips and baskets once word gets out.

This approach differs from the ‘real estate’ approach being pursued by Target and Sears. In 1,450 Target stores, Radio Shack will run cell phone shops, and in a California Sears store, the Forever 21 retailer will set up a home, reports Fortune.  These retailers are diversifying and trying to ride trends. Yet we believe that supermarkets have a prime opportunity in well-defined deal centers, which would serve a need that has been so obviously expressed by consumers of every stripe.