Small-Box Retail Is Where the Growth Is

Small-Box Retail Is Where the Growth Is

Bigger isn't always better

Big-box retail is discovering good things come in small packages. 

According to recent data from Kantar Consulting, big-box retail sales grew by 2.3% last year. That trailed overall retail sales (excluding auto, fuel and food service), which rose 3.8%.

Small-box retail, which tends to fall into the convenience store and dollar store categories, was the real success story. Kantar said this subcategory experienced 6.2% growth in 2017, more than 2.5 times the growth of big-box retailers.

Kantar forecasts growth of 4.3% for retail overall in 2018 (again excluding auto, fuel and food service), with shoppers continuing to shift to online sellers and small-box retailers.

Big-box retailers are adjusting to reflect the shift.  In 2017, 81% of the 111 stores Walmart opened in the US were smaller format (around 40,000 square feet). Meanwhile, 22 of Target's 27 planned stores for 2018 are smaller than 50,000 square feet vs. the 133,700 average.

As far as foot traffic goes, Walmart dominates the big-box space. PlaceIQ measured US in-store visits to the leading big-box retailers each month of 2017, and in aggregate Walmart took the largest share of visits (65.5%), followed by Target (14.7%).

But paralleling the small-box trend called out by Kantar, PlaceIQ noted that brands like Costco and Meijer, which have smaller footprints, had higher efficiency ratings—that is, more visitors per store. 

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