Whole Foods Unveils ‘Minimarket’ Concept for Urban Shoppers

According to WSJ, Whole Foods (AMZN) is betting on small-format grocery stores for urban shoppers with its new ‘minimarket’ concept Daily Shop locations.

Cool Concept

The Daily Shop stores are designed to cater to busy, on-the-go urban shoppers like Arthur Glauberman, who values the convenience of quick trips for produce and essentials. 

The stores are around 25% of the size of a traditional Whole Foods and are tailored for “fill-in” shopping—frequent visits with small baskets of items.

Nicole Davia, an SVP at Whole Foods, emphasized that the concept addresses unmet needs in urban neighborhoods. Despite logistical challenges, the Daily Shop’s success in Manhattan encouraged Whole Foods to expand the format.

Mixed Signs of Success

Whole Foods isn’t alone in experimenting with smaller-format stores. Walmart (WMT), Sprouts Farmers Market (SFM), and Publix have all explored the ‘minimarket’ approach—with varying outcomes:

• While Sprouts’ smaller stores outperformed larger locations in visitor numbers, other grocers struggled to make the concept profitable due to high operating costs and inventory challenges.
• Walmart abandoned its Walmart Express concept after finding that one supercenter could generate the same sales as a dozen small-format stores. 
• Whole Foods discontinued its “365 By Whole Foods Market” chain in 2019 after its pricing strategy became redundant with traditional stores.

Challenges of Going Small

Experts note that small-format stores rely on high inventory turnover and streamlined operations to offset higher construction, setup, and labor costs. Customer feedback from the Manhattan Daily Shop highlights these hurdles:

• Some shoppers praised the store’s convenience, while others reported frequent stockouts of staples like potatoes and onions.
• Narrow aisles and long self-checkout lines frustrated shoppers seeking even quicker trips.

Despite these early issues, Whole Foods has learned from its past experiences and positioned Daily Shop as distinct from the 365 concept, offering a curated selection without compromising on price or quality.

Looking Ahead

Whole Foods plans to double down on promotions and expand the Daily Shop footprint in dense urban areas. 

With more than 500 locations nationwide and sales up 40% since Amazon acquired the chain in 2017, the grocer is banking on this minimarket strategy to capture the growing fill-in shopping trend.

The success of this initiative will depend on balancing operational efficiency with customer expectations for convenience and product availability—a high-stakes gamble in the competitive grocery sector.