Retail Stores are Getting Smaller in Order Grow

Coles has announced that it will follow the lead of other large retailers such as Woolworths and Target,  by opening smaller-sized supermarkets in more locations. As Australia’s population density increases, many retailers are shrinking to grow as a result of increased pressure on available real estate for retailers.



High rents, lack of prime real estate and rising inventory and wage costs have all contributed to need to restructure. Retailers have responded to the increased competition and costs in two ways. The first being ‘rightsizing’; the term used to describe the closure of underperforming and unprofitable locations. Myer is an example of this occurring. The second being ‘downsizing’, which many stores are partaking in by shrinking their store footprints.

Established firms, along with retail start-ups are taking this small store a step further by opening ‘micro’ stores. While others are adapting this concept by using their smaller shopfronts as a ‘click and collect’ point for their online customers.

Smaller stores appeal to shoppers looking for convenience as limited product offering in the smaller space allows shoppers to make decisions more easily. The stores appeal more directly to affluent baby boomers and millennials who shop more frequently with smaller basket sizes. These shoppers demand personalisation, special services and quality products.