Wegmans Opening In-Store Food Hall as Supermarkets Expand Beyond Groceries

As supermarkets look to provide one-stop shopping, Wegmans is pushing beyond the typical grocery format to open a hybrid supermarket/food hall in New York City.

According to Time Out New York, the new Manhattan location, set to open Wednesday (Oct. 18), will be set up to look like a market, with a range of different food areas including an area to purchase pre-made salads, a sushi bar, a bakery, a fish market with selections flown in from Japan and more.

“The main goal is to let the consumer know we’re not just here to sell groceries. We are here to uplift the community,” store Manager Kyle Butta told PIX11.

The news comes as more supermarket chains find ways to make their stores destinations rather than just places to purchase grocery products. For instance, a grocery store coming to Augusta, Georgia next summer, FreshTake, will boast a five-hole golf green, in addition to an on-site café, bar, barbecue smokehouse and firepit.

Supermarkets have been finding creative ways to expand beyond food categories for years. In 2021, for instance, Midwestern grocer Hy-Vee brought exercise equipment showrooms to its stores, and around the same time, Texas supermarket chain H-E-B opened jewelry shops in its stores.

Yet most of grocers’ efforts to meet more of consumers’ day-to-day needs have been centered on the connected “eats” category, which brings in meal kits, ready-to-eat options and restaurant meals in addition to traditional groceries.

Grocery giant Kroger, for its part, has become the nation’s top sushi seller, with consumers purchasing more than 40 million pieces from the company per year. The grocer also owns meal kit company Home Chef. Smaller chains, too, are adding more hot food and prepared meal options, adding self-serve in-store restaurants and more.

Indeed, consumers seek out the option to get as much of their food purchasing done as possible from one merchant. In an interview with PYMNTS, Atul Sood, chief business officer at Kitchen United, the company behind Kroger’s in-store digital food halls, spoke to the consumer demand for more hot food options at the supermarket.

“What we had as an initial hypothesis was that when consumers do shopping for the week, they don’t necessarily want to cook that night,” Sood said. “That seems to be really clicking with consumers. As soon as they get educated about the option of ordering from restaurants in a grocery store, that repeat orders tend to be very high and consumer retention tends to be very strong.”

For grocers, these initiatives not only give them the opportunity to stand out against competitors but also to draw consumers to their brick-and-mortar businesses, which tend to be higher-margin, without the labor cost of putting together pickup orders or of driving out delivery orders.

Indeed, eCommerce-focused locations have an uphill battle when it comes to turning a profit. In February, Walmart shut down its last pickup-and-delivery-only locations, ending its nine-year test of the model. Meanwhile, curbside-only grocery startup Addie’s, which debuted at the start of this year, appears to have already closed up shop, its website now defunct. According to WCVB, it shuttered in June.