the future of the grocery store

imgresThere was a short period of time when I was growing up that someone actually delivered milk to our back porch.  It did not last long but looking back that was pretty cool yet from a business perspective it is expensive and labor intensive.  Quickly afterward we purchased our dairy needs at the Giant, our local market.

I was in LA for a few days and saw that Gelson’s finally opened up their new big store on Lincoln.  I asked my brother and sister-in-law how it was.  They both replied, really big and empty of people.  So what is the future for grocery stores?

In NYC we are seeing grocery chains shut down but the reality for us is that I have shifted our shopping substantially over the past decade.  We buy all our meats from the butcher.  We buy all our vegetables and fruits from the vegetable/fruit market or the Greenmarket.  We get our breads from the baker.  The eggs can be bought at the butcher.  The ice cream comes from Phin & Phebes.  Truth is the only thing we get at the market is milk, yogurt and butter.  Very European way of shopping.

A few things will take place.  Groceries will get better at local products and understanding their consumer.  How Good, a company I am invested in, is working with stores to understand their data better and in turn be more profitable.  Groceries will have to get on the delivery bandwagon like a Blue Apron.  Many are using Instacart now but the costs are extremely high.  They will also have to create more online functions so that people can order and have everything ready to pick up when they swing by.

Grocery chains need to get creative.  The Lobster Place in Chelsea Market is a multi-faceted store.  You can buy your fish to bring home but you can also sit down and have a meal.  They don’t leave a square footage of that store unused.  They could do cooking classes in the evening.  Think about how when Barnes and Noble turned their bookstores into community places where people could eat, buy books, talk and collaborate.  They didn’t pivot again into the next but that concept could be an interesting one in groceries.  Appealing to the local community.

Food as an industry has made significant changes over the past decade from delivery services of ready made food to creating your own healthy menus to pre-chopped food with a recipe to make at home.  People want efficiency and they want to know what they are putting in their bodies.

There is a lot more competition in the grocery world.  The marketshare for large chains is dwindling.  Their demise creates a lot of wasted food.  I see opportunities all over the place.  Grocery in in the midst of a massive reinvention.  I really do believe that the grocery world will look a lot different in 5 years than it does today.


Comments (Archived):

  1. awaldstein

    Hmm…I’m like you in many respects on how I shop.But if you are marketing perishable goods as an artisan, you still are a slave to standard distribution (20-40 pts) and Whole Foods (30-40 pts). Fresh Direct or any equivalent is not much better.I know this world inside out and back again.Is there an alternative really?I’m feeling sullied about my thinking as it all points to next day delivery and that points to the big dinosaurs like Amazon who are actually no different than Whole Foods.Important discussion.

    1. Gotham Gal

      As you know big grocery is important for brands yet insanely antiquated. Is there an answer on how to change this? I am convinced that they all need to rethink how they operate.

      1. awaldstein

        With you.BTW–talk about a store that leaves not one inch unused–the new Eataly in the Financial District.Amazing–and honestly if you have not done some exploration or the Calatrava building inside worth a walk. Love it or hate it is a bold stab at an urban usage.

      2. AMT Editorial Staff

        We often avoid the “big grocery stores” because of size. Just takes too long when we only want a few things. We do use Trader Joe’s weekly. We even skip Whole Foods because too packed with product and people…TJs more efficient at check out; but often the produce is subpar. We try and get this via our CSA or a company called Specialty Produce (serves restaurants) that happens to be a mile from us.

  2. Tracey Jackson

    You bring up a huge point, and it’s grocery stores and many others.I love to shop the European way, but I don’t live in a neighborhood that has anything that would resemble those stores.I also found running into the neighbored market that is inferior was costing a fortune. I would buy things I didn’t need and end up not having what I did need.I admit Fresh Direct has changed my life. I can plan meals. I don’t buy out of impulse or hunger. They have a great selection of organic produce, cheeses We barely eat meat. But the point is I do it twice a week, my kid has access to the site so she can put things in and it’s one less thing I have to worry about.And in urban areas when you don’t have a car, it makes life so easyI buy all my paper products and cleaning and Duane Reade stuff from 1/3 the price!I buy all my dog food and things online on autoship.I barely shop in stores. You can’t beat the prices and the ease. And I love to shop! So I don’t know how the big box chains or stores will compete with that.For working women and moms and families it just makes sense. If Gelsons in SM is not full – a city with a market going population and all with cars, where Gelsons was a really fun place to go, then I don’t know how you do it. But it’s something I think about a lot!

    1. JLM

      .One has to experience to believe it. Aveeno Stress Relief Body Wash?JLMwww.themusingsofthebigredca…

  3. Lauren Moores

    In NYC, it is much easier to shop the European way and I would do the same. In LA, I went to that Gelson’s as a newbie to the neighborhood, until I realized how much more expensive it is to shop there. Alternatives are as others suggest: Co-ops, TJ, Farmer’s market, CSA plus Thrive – many of these are delivery only. In will be interesting to see how the long-run economics change the landscape.

    1. awaldstein

      Both NY and LA have great farmers markets.

  4. cz

    Similarly in NYC, I am lucky to buy mostly from the neighborhood markets, farmer’s market, or CSA. However, two observations: I’ve noticed tons of younger downtown residents buying “groceries” from CVS or Duane Reade. They are filling up on processed foods, or their idea of “healthy” choices like granola/juice/popcorn/corn chips (that are filled with additives and sugar!). Also: Yes, the Lobster Place is a great example of multifaceted marketing, but most Americans are not buying Lobster or similar ocean fare at that price point.Side note – I just returned from Paris where your recommendations over the years were extremely helpful. Au pain des Idees will forever be in my dreams, super scrumptious! Thank you for continuing to share such wisdom!

  5. JLM

    .The most important development in how we obtain and use food is the size and number of refrigerators in our kitchens.There is an super-urban (NYC) and a normal experience. One size does not fit all. What you describe is a very pleasant experience, in addition.Stores like Whole Foods throw in a different quality — at a cost of course.Stores like Costco (best place ever for fresh fruit, high quality and who doesn’t like to linger in the fruits/vegetables room on a hot day?) and Sam’s are providing a different experience and set of product offerings.With refrigeration, we can do all of them.JLMwww.themusingsofthebigredca…