The launch and rapid expansion of Giant Food Stores' small format banner this year, Giant Heirloom Market, shows how a retailer can successfully create a scaled-down store in a challenging market with a new strategy.
Giant's first Heirloom Market opened in January in Philadelphia's Graduate Hospital neighborhood, and weeks later the company announced plans for three more Heirloom markets in urban Philadelphia neighborhoods. In quick succession, the banner opened its second store in University City in August and a third in the Northern Liberties neighborhood three months later. The fourth planned store in Philadelphia's Queen Village neighborhood will open in 2020.
"What's interesting with this format is it's brand new," Stewart Samuel, program director in Canada for retail analysis firm IGD, told Grocery Dive. "It's not like a smaller version of a Giant store. It's literally something new they developed from the ground up."
According to Matt Simon, chief marketing officer for Giant Food Stores, Giant is the leading grocer in most of the markets where it operates. In Philadelphia, however, Giant takes a solid second place.
"We felt now is the time to find the right people, to go to the city, to do whatever it takes to be successful," Simon told Grocery Dive.
That meant more than just taking a standard Giant supermarket and dropping it into the city. "The role of Giant Heirloom Market is to be our entryway into the city in a way that takes the best of Giant, the best of Philadelphia and brings them together," he said.
The concept for the market is to create a hyperlocal, small footprint store that caters to each unique community where it operates. Each store spans around 10,000 square feet and features local purveyors, freshly prepared foods and a specialty product assortment.
"What's interesting with this format is it's brand new. It's not like a smaller version of a Giant store. It's literally something new they developed from the ground up."
Program director, IGD
"What makes it really stand out for us at Giant is [some of] the products you get there you can only get in Philly," Simon said. "We hire people who live in the neighborhood. So it's a way to really represent Philadelphia in a Giant kind of way."
Giant's approach to designing Heirloom Market was key, and it was based on listening to the customers — which is particularly important in a city like Philadelphia where each neighborhood has its own tastes and culture, said Simon, who grew up near the city.
Paul Madarieta, director of growth initiatives at Giant Food Stores, was tapped to develop the concept in early 2018. In gathering customer feedback, Madarieta said across all four neighborhoods Giant was targeting, residents said they were looking for nicer-for-you options and smaller stores reminiscent of a Trader Joe's, Wegmans or Whole Foods 365 format.
"I needed to have people who were innovative, who were not stuck in a rut and thinking about things the same way, and were interested in doing something pretty spectacular," Madarieta told Grocery Dive.
While Giant said it has no plans to expand the banner outside of Philadelphia, it could face challenges as it looks to grow store count — whether inside or outside the city.
Samuel with IGD said the trend toward personalization is a great strategy, but it's hard to do and isn't always cost-effective. Facing the competition that they do, it makes sense that Giant would adopt a more localized approach for each.
"The challenge will be as they scale up, can they keep that approach going," Samuel said.
Christopher Doering contributed reporting to this story.