cations in New York City, before eventually expanding it to other metropolitan cities across the country.  The new, smaller-format supermarkets will range between 7,000 to 14,000 square feet, which is about a quarter to half the footprint of an average Whole Foods Market store. In a public release, Christina Minardi, Whole Foods Market and Amazon’s executive vice president of growth and development commented, “At our new store formats, we’re tailoring every square foot to the unique, fast-paced needs of urban lifestyles… Expanding our footprint with Whole Foods Market Daily Shop is key to our growth, fostering deeper customer connections, and advancing our purpose to nourish people and the planet.” Can Whole Foods successfully launch a small-scale grocery store chain? Whole Foods Market Daily Shop is not the grocery retailer’s first foray into smaller storefronts. Back in 2016, the company launched 365 by Whole Foods Market, a chain of smaller locations, approximately 25,000 to 30,000 square feet each, which prioritised lower-priced and generic brands and offered consumers a rewards program.  However, the project was dropped after three years and twelve store openings due to a low return on investment.  As Whole Foods co-founder and former CEO (he left the company in 2022) John Mackey explained in an internal memo at the time, “As we have been consistently lowering prices in our core Whole Foods Market stores over the past year, the price distinction between the two brands has become less relevant. As the company continues to focus on lowering prices over time, we believe that the price gap will further diminish. As a result, we have decided that it’s in the best long-term interest of the company to concentrate our efforts on growing the core Whole Foods Market brand moving forward.” Amazon’s US$13.7 billion acquisition of the company in August 2017 was another reason the 365 by Whole Foods Market chain shut down. At the time of the acquisition, many retail experts expressed their doubts about the deal, predicting that Amazon’s approach to price-conscious consumers would clash with Whole Foods’ higher price point. According to the market research insights company Numerator, Whole Foods only accounts for 1 per cent of the national grocery store market. To put that in perspective, Walmart has a 19 per cent share of the market whereas Krogers owns 9 per cent.  Now, Amazon is making another attempt to increase Whole Foods’ slice of the grocery store market with the launch of Whole Foods Market Daily Shop. As Neil Saunders, managing director and retail analyst at GlobalData, told Inside Retail, “Amazon has been very experimental with grocery stores and is still trying to produce a format that really works and gives them the potential to expand. I think a smaller format Whole Foods has a role to play in the grocery landscape, and it may be well-received in certain city neighbourhoods.” But he cautioned that it’s unlikely to significantly increase Whole Foods’ share of the market: “I don’t think this is a game-changer for Amazon or Whole Foods,” he said.  “I also do not think this addresses the wider issues at Whole Foods.  “There is a commonly held view that Whole Foods is an amazing grocer but the reality it is a high-quality grocer without many added bells and whistles. Sure, the produce displays may look nice and some of the counters are good, but beyond that, they don’t add a lot to the experience, especially not for the prices it charges. “The bottom line is that Amazon cannot really win in grocery from a smaller store format. It needs to play strongly in both the larger store arena, where the bulk of spending is made,” he concluded. The rise of the small-format grocery store But while Saunders believes Amazon may be better suited to the mass end of the market, research suggests there are several advantages to smaller food retail stores. A report created by Placer.ai, a location analytics company, cited the rise of small-format grocery stores as one of five major trends shaping the industry in 2023. Two successful examples were the American grocery store chains Wegmans, which launched three miniature stores in 2022, and Meijer, which launched two smaller-format concepts called Meijer Grocery in early 2023.  Opening smaller locations allowed these companies to reduce their retail and operating costs, create a more efficient operation, and localise their product offerings to the consumer base.  Meijer was able to strategically locate its smaller storefronts in places that attracted visitors from trade areas with higher-than-average median household incomes (HHI).  Foot traffic data from February to April 2023 showed that Meijer Grocery attracted visitors from trade areas with median HHIs of US$90K/year and US$103K/year, compared with Meijer’s typical trade areas, which had median HHIs ranging from US$51K/year to US$81K/year. Whether Amazon can replicate this with Whole Foods Market Daily Shop remains to be seen.