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Whole Foods to Launch Small Format Stores, Starting in NYC

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Whole Foods Market will aim to make big profits from smaller stores in New York City and beyond.

The Amazon (AMZN)-owned grocery chain announced Monday it plans to open mini-stores ranging from 7,000 to 14,000 square feet, or about a quarter of the size of regular Whole Foods outposts. The chain will start by opening one later this year at 1175 Third Avenue on the Upper East Side, with additional locations planned in New York before it rolls out the concept in other cities.

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The so-called Whole Foods Market Daily Shops will sell meals and snacks, plus staples such as fresh produce, meat, bread, alcohol and supplements, as well as a “handpicked range of local specialties,” the company said.

A spokesperson for the company did not provide details about the size of the Third Avenue space, but said the goal is to bring Whole Food locations closer to where customers live.

“We’re tailoring every square foot to the unique, fast-paced needs of urban lifestyles,” Christina Minardi, Whole Foods and Amazon’s executive vice president, said in a statement. “We’re excited to introduce a new way for our customers to quickly pick up their Whole Foods Market favorites — from grab-and-go meals to that last-minute dinner ingredient — making the early morning or after-work grocery trips more efficient and enjoyable.”

Minardi added that the move is key to the company’s growth.

It’s also part of a growing trend in retail, and grocery stores in particular, to experiment with micro-stores across the country in hope of increasing the industry’s razor-thin margins.

And it seems to be working for some, as shoppers in one Florida town dwelled between three and six minutes longer in a small format GreenWise by Publix location compared to the store’s existing locations nearby, according to a study of foot traffic patterns by Placer.ai.

Others haven’t been so lucky when experimenting with small formats. Ikea started a push to plant locations far smaller than its typical 400,000-square-foot warehouses in city centers around the world, but its 17,350-square-foot “Ikea Planning Studio” at 999 Third Avenue closed in 2020 while its 115,000-square-foot spot in the Rego Center mall shuttered in 2022.

Amazon itself pulled back on some of its smaller retail spaces, with the e-commerce giant starting to close some of its cashier-free stores around the country last year.

But Whole Foods — which Amazon bought for $13.7 billion in 2017 — does not plan to shutter its traditional stores anytime soon and still has more than 75 stores in its pipeline, according to its announcement. 

Last year, the 17th Whole Foods location in New York City opened at One Wall Street in the Financial District, joining more than 530 other locations spread across the United States, Canada and the United Kingdom.

Abigail Nehring can be reached at anehring@commercialobserver.com.