Cub will open its first small, urban concept grocery store in 2019

Supervalu's retail division is the latest to follow a popular retail trend — creating smaller stores.

The Eden Prairie-based company announced Wednesday that it will build a new urban concept Cub grocery store at E. 46th Street and Hiawatha Avenue in Minneapolis. The 46,000-square-foot store, about half the size of the largest Cub stores, is also the first to anchor a residential complex.

"This store is unlike anything you'll see in any Cub," said Anne Dament, executive vice president of retail, marketing and private brands. "It's designed to seamlessly integrate into the community. It's more chic than you've seen before."

The smaller store to open in spring 2019 will feature a large deli area with a selection of Quick and Easy and made-to-order meals, a popcorn shop, a produce section modeled after a farmers market layout, an enhanced floral gift space and a pharmacy. It will have outdoor and indoor seating at the Refresh cafe/bar, where customers can get coffee, ice cream or a warm cookie in the store or the walk-up window outside.

The new location east of the Holiday station on 46th will be steps away from a bike path. A bike dock will be included to accommodate those customers. Open seating will be provided inside and out.

"We want people to hang around with their iPad, grab a cup of coffee, sandwich or cut fruit, relax and then go about their day," Dament said.

Although it's a smaller store, Dament said customers can still shop as they would in a typically sized Cub. Instead of finding 20 varieties of Heinz ketchup, customers may find five, for example.

"Supermarkets are trying to be more of a curator rather than stocking 50,000 different items," said Phil Lempert, a grocery analyst and founder of Supermarketguru.com. "We're tired of walking around in a big store when now supermarkets have lockers, click and collect and deliveries."

Lempert said smaller stores are the right thing to do in the age of Amazon and online ordering, but each one has to figure out what's right for its neighborhood. He pointed out the Lunds & Byerlys Kitchen that closed in Wayzata in 2017 never found the right mix.

Nearly all of the large supermarket chains, including Hy-Vee and Kroger, are testing smaller market stores. In Des Moines, where Hy-Vee is based, the chain opened a downtown urban store called 4th and Court. Sales at the 35,000 square-feet-store have exceeded expectations by double digits, said Jen Kopriva, district vice president of the north central region for Hy-Vee.

"We hope to put one in downtown Minneapolis or Kansas City," she said last week.

The smaller stores work for a simple reason, according to David Livingston, a supermarket analyst in Milwaukee.

"It's all about sales per square foot," he said. "Bigger stores are seeing a decline in sales per square foot."

Dament said the Cub at 26th and Lake will remain open. Supervalu recently completed a minor remodel of the store. Twenty-two Twin Cities stores have been remodeled with Blaine south, Inver Grove Heights, Minnetonka, Crystal and Plymouth Vicksburg underway or happening soon.

The new Cub will anchor a five-story, 148-unit complex being built by Excelsior-based Oppidan Investment Co.

Residents in the complex will be able to order groceries or meals on an app for delivery to their doors within an hour. Cub has partnered with Instacart for delivery at 90 percent of its stores and is currently testing click and collect at 15 of its stores.

John Ewoldt • 612-673-7633