A growing preference among consumers for localized shopping experiences, which gained steam with COVID-19, has bolstered the small-format retail market and prompted some major retailers to branch out into new formats. New data from Placer.ai, which uses location analytics to discover consumer trends based on foot traffic, revealed that smaller format retail locations might be effective at attracting more frequent visits.

Looking to capitalize on this trend, Sprouts Farmers Market, for example, has spent the past 2.5 years cultivating a small-format strategy that includes reducing the chain grocer's square footage and environmental impact by focusing on smaller, more accessible properties. Its smaller format stores increased by nearly 50 percent since January 2022, which has helped it outpace the overall grocery sector this year.

Other grocers, including Trader Joe's and Whole Foods, are also targeting smaller locations that are driven by convenience.