Can We Bring Back the Neighborhood Supermarket?

“Urbanism,” broadly understood, is about more than just land use and the regulations that determine it, like zoning, parking regulations, and highway or transit funding (or lack of funding). Urbanism is also about commerce and business. Look at any semi-abandoned small town or struggling city in the Midwest, or coal country, or other places that have undergone economic dislocation, and you’ll see that good land use and urban form alone are no guarantee of success. When retail and services disappear or decamp for car-oriented locations away from downtowns, “urbanism” falls apart.

One of the most important retail enterprises is a supermarket. Supermarkets are key elements of modern mixed-use developments and “town center”-style projects, and distance to a supermarket is a good measure of and proxy for a place’s local economic vitality. But this is not really a land-use question. At least, not one that localities can fix by adjusting local land-use regulations. It’s a business issue: most mainstream American grocery chains these days do business exclusively in a car-oriented, suburban, big-box form. There are financial and tax reasons for this, customer expectations of easy parking and convenience, and the simple fact that it’s a tested and easily replicable business model.

I’ve written about this recently, here on some of the history and trends, and here with some more specifics and a look at a small but complete Latino grocery store in Arlington, Virginia. In this piece I’m going to show you in more detail a few smaller grocery stores out near my home in Herndon, Virginia. In many ways these stores are typical of what a mainstream American grocery store once was. Herndon is far more suburban in its land use than Arlington, and another 35 minutes away from Washington, D.C. Yet even out here commerce at a traditional urban scale thrives.

The benefits of stores like this might not be obvious. When a lot of us think of those older, smaller supermarkets that were still hanging around in the 1990s, we think of run-down stores with rattling freezers, stained drop ceilings, and sad-looking produce. Many of them were indeed subpar. And I’m not arguing that we should get rid of Costco or Kroger. Big-box retail is fine. Sometimes it’s good. It just shouldn’t be our only option.

Neighborhood grocery stores are convenient for a number of reasons. First, and most importantly, they are scaled small enough to “fill in” the spaces between conventional big-box supermarkets, especially when it comes to anchoring mixed-use developments. I want to focus on this point for a moment.

A couple of years ago, I wrote about a recent mixed-use development in a semi-rural area about 45 minutes from Washington, D.C. (that’s with no traffic). It was anchored by a nice, big, new supermarket, a Harris Teeter. The Harris Teeter opened in 2008—and closed in 2020. It’s been empty for four years. Why? A Wegmans opened up down the highway, and the sparsely populated area simply couldn’t support more than one large supermarket. If American grocery chains offered a small, neighborhood-scaled store that could function as an anchor for individual housing developments, this waste of resources and no-longer-mixed-use development could have been avoided.

In other words, the absence of the neighborhood supermarket retail form holds back the development of dense walkable nodes in the suburbs, and leaves most small towns and many city neighborhoods without a local source for real food shopping. A business problem becomes a land use problem, and then they intensify each other.

Neighborhood supermarkets are also convenient because their smaller footprints and parking lots mean they’re less imposing to walk to, less time consuming to park at, and quicker to run in for one or two items. We might think of size and selection as convenience, but a store with tens of thousands of items and 50,000 (or 100,000 or more, in the case of a supercenter store) square feet is not scaled to the quick, frequent errand run. These are different kinds of efficiencies or conveniences. Huge stores concentrate and centralize shopping runs in the same way they concentrate economic activity and concentrate the physical locations where it is possible to buy things. We are largely missing a whole other category of conveniences that come from physically smaller, financially more nimble, and geographically more distributed stores.

So here’s the kind of store I’m talking about. There are many reasons why this isn’t commonly done by the chains. But there’s no reason it couldn’t be done.

These are three local grocery stores in Herndon: an old mid-sized (20,000 square foot) supermarket, now a Latino chain called Bestway, and two very small grocery stores called Madina Market and Aditi Spice Depot. Madina has meat as well as refrigerated items; Aditi has no meat department. (The small supermarket in Arlington I previously wrote about is a true full-service supermarket contained in only 6,000 square feet!)

Here’s Bestway:

It’s not that long ago that this was what we’d simply call a supermarket; yet this footprint is already pretty much no longer built.

Here are the other two grocery stores, which are much smaller. Aditi is smaller than Madina.

Take note not only of how small the stores are, but also how densely their interiors are packed. As the square footage gets smaller, the aisles become narrower. Narrow aisles mean more stuff per unit of area. This is like a tiny microcosm of an old Main Street, versus a modern suburban shopping center. An old-fashioned store runs on the same principles as an old-fashioned city. The aisles in a lot of modern supermarkets are often twice as wide as the aisles in these older stores!

Strong Towns emphasizes the concept of revenue or productivity per acre in comparing urban and suburban areas, finding old-fashioned urbanism to generate far more revenue per unit of land area than the suburban pattern. This is not true just at the level of the block or the shopping center—the acre—but it is true down to the level of the aisle inside the store—the square foot! In many ways, suburban land use and commerce are about the increasingly less efficient use of more and more space.

Yet, as these mostly immigrant-owned “ethnic” stores show, the neighborhood supermarket isn’t completely gone.

In fact, there’s some evidence that it may be coming back. The twin German imports, Aldi and Lidl, have grown rapidly in the United States, though typically in suburban locations. Still, they show us something important. An Aldi or Lidl can squeeze in, physically and financially, where a 35,000 or 50,000 square foot supermarket can’t. It can also, importantly, coexist alongside such stores. That implies the big stores are leaving a profitable gap.

In terms of land use, some American stores, particularly Whole Foods and The Fresh Market, have gotten good at building smaller, more compact urban-format stores. Publix has built a handful of urban-ish stores in recent years. The Stop & Shop chain in the Northeast has been developing small-format supermarkets. There are many smaller and more local examples around the country.

Everything about these stores is optimized for quick local stops, many of them by walking, biking, or transit. They’re not just businesses; they’re amenities, enterprises which enhance their surroundings in a particular way. Unlike a Costco, which attracts customers from a trade area of many miles, these smaller stores serve a narrower area and are not routinely jam-packed. They’re just there when you need them, and small enough to be able to survive on levels of patronage that do not result in them always feeling crowded.

Why have the big chains gotten out of the neighborhood-supermarket game for so long? I don’t have any inside insight on this, but financing—for example, a lack of comps for mixed-use centers with small supermarkets—is probably a factor. One interesting factor raised by a commenter on one of my previous pieces is that mom-and-pop grocery stores do not have a white-collar manager making six figures. In other words, the corporate structures and salary expectations that would exist for a small chain supermarket make it unprofitable from the get-go. Supply chains and delivery networks scaled for larger stores may be a factor. There are likely many other reasons.

There is only so much that localities can do about this—they cannot conjure a non-existent retail form. But nobody does anything until they do it. The demand for smaller grocery stores, especially in urban and mixed-use locations, is real. I’ve seen it in my hometown (which once had two supermarkets on its little Main Street!). But eventually it should become obvious that a retail segment sized for the burgeoning mixed-use development trend will make good business sense.

I want to reiterate this issue of scale, again, a little more abstractly: America in many ways is missing the whole bottom half of the “scale ladder”: tiny apartments or small starter homes, what the Europeans call “city cars,” small grocery stores and/or stores with densely arranged interiors. American land use, and in turn commerce, all bend towards a certain concentration and embiggening.

Urbanism is not about attacking that, but about rebuilding the bottom half of the ladder, and making room and opportunity for those who can’t reach the middle or the top, or aren’t there yet. Or even just those of us who’d like to run into the supermarket for a quick purchase, and stroll home.

Addison Del Mastro is a Partner Writer for the Resident Urbanist. He writes from Northern Virginia on urbanism, retail, cultural history, and other assorted issues, with a focus on the ideas and psychology behind urbanism. Of particular interest to him are small towns, the ongoing urbanization and "growing up" of the suburbs, and what urbanism looks like outside of the big city. He runs The Deleted Scenes. You can follow him on Twitter and Threads.