Dive Brief:
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Kroger-owned Food 4 Less is hosting a grand opening for its first remodeled supermarket with a specific focus on health and wellness on Aug. 2, according to Retail Leader. The store is located in Los Angeles’ Harvard Heights neighborhood.
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The new 39,000-square-foot warehouse-style store features new deli/bakery options, a more extensive produce department, and an increased variety of natural and organic foods.
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Food 4 Less President Bryan Kaltenbach said in Retail Leader, “We designed this store with the neighborhood it serves in mind — offering specialized design features, an outstanding selection of fresh food options, personalized customer service and great deals.”
Dive Insight:
This major remodeling project for Food 4 Less comes from two trends dominating the grocery market right now. Consumers have made it clear they want healthier choices, which includes more organic options. American markets are also scrambling to update their stores and products in anticipation of the discount European powerhouse, Lidl, opening its first stores in the U.S.
Lidl has opened stores in North Carolina, South Carolina, and Virginia, and plans 80 more stores along the East Coast in the next year.. The hard discount German supermarket has a focus on store brands, plentiful fresh food options, and a unique in-store experience. It currently has 10,000 stores in 27 European countries, so the company clearly has found a formula that works. They plan to open 80 more stores along the East Coast by the middle of 2018.
Discount retailer Aldi, a fierce competitor of Lidl in Europe, announced its own $1.6 billion plan to remodel 1,300 stores with a similar focus on expanded produce and more organic options throughout the store. The discounter also plans a $3.4 billion store expansion, which will end with the chain having 2,500 stores nationwide by 2022.
The Food 4 Less remodel was spot on to keep up with these trends, but also to cater to its customers. Millennials are already interested in this chain. According to inMarket, Food 4 Less attracts millennials 48% more often than other age groups. These 18-35 year olds have shown they want healthy, organic foods, but don’t want to spend their entire paycheck on them. This expansion of products they want to buy is a smart move to attract even more millennials, possibly creating store loyalty at a young age.
The potential downside to this remodel is that it could turn off core customers. An increased demand for organic options gets splashy headlines, but you can’t forget about the other products in the average consumer's shopping cart. If it becomes too difficult to find the Doritos, macaroni and cheese and frozen pizza, consumers could start looking elsewhere for a more streamlined and familiar shopping experience