Whole Foods Courts New Customers With Smaller-Footprint ‘Daily Shop’

When it comes to attracting new customers, Whole Foods Market is apparently thinking small.

The Amazon-owned grocery chain recently opened its first Daily Shop mini-market on Manhattan’s Upper East Side, with plans to bring the concept to other urban neighborhoods, The Wall Street Journal (WSJ) reported Monday (Dec. 2).

“We’re serving a previously unmet need in the neighborhood,” Nicole Davia, a Whole Foods senior vice president, told the WSJ.

The report says that the 9,100-square foot store in New York City is around one-fourth the size of a standard Whole Foods, selling products at comparable prices.

The WSJ report also notes that the Daily Shop stores are part of a larger effort by grocery companies to bring their operations into smaller spaces to court “fill-in shoppers,” consumers who make frequent grocery trips but purchase fewer items.

This type of shopping is on the rise, the report said, citing data from Placer.ai, which tracks visits to stores. Shoppers made 11% more trips to grocery stores in the 12 months ended in October compared with 2019, but spent less time per visit, the company said.

Plans for the Daily Shop stores were first announced earlier this year. As PYMNTS wrote at the time, the format of these stores seems designed to counter cult-favorite grocer Trader Joe’s, known for its limited assortment.

“Streamlining the assortment could go a long way toward meeting shoppers’ need for speed, given that convenience is a top factor influencing choice of merchant for the vast majority of grocery customers,” that report said.

The PYMNTS Intelligence study “Consumer Inflation Sentiment Report: Higher Prices Fuel a Deal-Seeking Competition” found that 77% of consumers said ease and convenience were crucial in determining where to make their most recent grocery purchase.

Meanwhile, PYMNTS wrote last month about Whole Foods-parent Amazon and its efforts to bolster its grocery offerings as it competes against Walmart.

“Amazon Prime struggles to replicate Walmart’s grocery success, despite using its vast eCommerce infrastructure and Prime membership,” that report said. “While Amazon offers grocery delivery through its Whole Foods partnership, it still charges delivery fees in many areas, and the service is limited to select locations.”

For a number of Prime members, groceries are a secondary offering, with the service chiefly used for fast shipping on non-grocery products. Still, the convenience of bundling groceries with other Amazon benefits is gradually drawing in more shoppers, PYMNTS wrote.