The world of retail is constantly evolving. While large stores certainly serve a role in the industry, it’s clear that stores of a smaller size are gaining momentum. 

Small-format stores, or retail spaces that offer a fraction of a store’s traditional offerings, are becoming increasingly popular across the globe. Across industries, several prominent chains are dipping their toes into small formats, viewing this expansion as a way to embrace customers’ desire for convenience and accessibility. 

In this piece, we’ll examine how three industries have embraced small-format stores, setting an example of how vital it is to listen to consumer needs. As customers increasingly demand the accessibility and convenience of “on-the-way” locations, brands are responding with unique spaces that not only cater to the customer, but save money and square footage for the business, as well.

Food for Thought: Grocery Stores

The COVID-19 pandemic led people to think about their health in a different way. In fact, a study conducted by CVS Health found that 77% of people said the COVID-19 pandemic led them to pay more attention to their health in general. As a result of this change, the post-pandemic world has seen an expanded interest in fresh, healthy foods that are easily accessible. That’s why grocery stores are closely paying attention to what customers are seeking, and small-format stores providing these offerings are popping up everywhere. 

Whole Foods is debuting Whole Foods Market Daily Shop, a small-format store focused on  urban neighborhood residents looking for a quick, convenient shopping experience. Set to debut later this year with five locations in New York City, these locations aren’t seen as a replacement for the traditional supermarket experience. Instead, they’re seen as a new concept that offers everything from grab-and-go meals to grocery essentials. 

Sprouts, a popular natural/organic chain, is also exploring small-format stores.  These venues will reduce both the grocer’s square footage and environmental impact as they focus on smaller properties. With the news that Trader Joe’s is also trying out small-format stores with their new format called Pronto, it’s clear these grocery chains are onto something. 

“Smaller shops mean more customers per square foot, a key factor in big cities where rents can be astonishingly high,” Food & Wine reports. “Second, stores can tailor their merchandise to neighborhood demographics.”

Express Shopping: Housewares & Electronics

Ikea is known for its overwhelming format. That’s why the Swedish furniture mega-brand is doing their best to make it easier for customers to shop online and in person. They’re opening small-format stores, referred to as “plan and order point” stores, that serve as both shops for people who know what they’re looking for, and easy pickup spots for online shoppers. The Gaithersburg, Maryland location is about 8,800 square feet, or 2% the size of the closest warehouse store in College Park, Axios reports.  These locations carry about 500 “really popular takeaway” products, compared to about 10,000 items in traditional Ikea stores.

Best Buy Canada, the popular electronics retailer, recently opened their first small-format store. They currently have plans to open 167 more, according to Retail Dive. While they’ll also offer buy online, pickup in store services, the express-format stores will also provide a Geek Squad services and telecom services from Bell, Virgin Plus and Lucky Mobile. 

Department Stores Go Small

As traditional malls struggle to thrive, the stores that previously served as anchors are looking for new ways to evolve. This spring, Macy’s opened small-format stores across the country, and will continue to increase that count to about 30 through fall 2025. Viewed as going “off-mall,” these new shops, which frequently team up with local indie brands for pop-ups and events, are often housed in former Bed Bath and Beyond stores.

 “The customer experience scores in these stores are all really high, particularly regarding the physical environment,” Chief Stores Officer Marc Mastronardi told Chain Store Age. 

Bloomingdale’s also introduced a new small-format store known as Bloomie’s. As revenue dropped for their larger, full-size department stores, the chain’s goal is to “deliver a relevant shopping experience that aligns with consumer preferences for streamlined and neighborhood-friendly retail spaces.” 

When it comes to retail, we are in the “era of experimentation.” While stepping into small-format stores can be a risky pursuit, it can also be an incredibly worthwhile one. 

“A smaller concept store may be easier to gear toward local tastes and culture, which can help create stronger connections with new and existing customers,” says Stephanie Cegielski, Vice President of Research and Public Relations at the International Council of Shopping Centers.

Not only are small-format stores efficient to operate because of their smaller size, which cuts down on the cost of both employees and utilities, but they go hand-in-hand with the growing online shopping experience, which emphasizes in-store pickups and frequent returns.

As retailers look to shrink their footprints, stores in a smaller format are a great tool to do so. In this “era of experimentation,” great risks bring great rewards. As the retail world continues to grow and evolve, small-format stores are an exciting way to change the narrative.