Dive Brief:

• Kroger will close its two Fresh Eats MKT convenience stores on Wednesday, according to a report from NBC 4 in Columbus, Ohio. Both locations opened in 2017 as part of Kroger's testing around smaller stores and fresh, meal-focused assortments.
• In a statement to NBC 4, a company spokesperson said the decision came after a portfolio review. Kroger said it would apply what it learned about fresh, quality food to other parts of its business.
• Affected employees have been encouraged to apply to other Kroger locations in the area.

Dive Insight:

Kroger launched Fresh Eats MKT in May 2017. The concept paired a convenience store format with fresh foods and grab-and-go options. The first location in Blacklick, Ohio, spanned about 12,000 square feet and featured a full-service Starbucks, a bakery, fresh produce and a fast-casual restaurant. It also piloted mobile ordering for made-to-order foods. 

At the time the concept debuted, Kroger still operated hundreds of convenience stores. But less than a year after launching Fresh Eats MKT, Kroger sold its c-stores to the U.K.'s EG Group for $2.15 billion. Without a clear path forward for the concept, Kroger was likely mining it for consumer insights. Fresh Eats never expanded beyond the two locations in the Columbus area.

Since Kroger debuted Fresh Eats, numerous other fresh-focused convenience stores have launched. Hy-Vee’s Fast & Fresh and Fast & Fresh Express concepts are growing in the Midwest. Convenience chains like Sheetz and 7-Eleven have also revamped their stores with in-store restaurants, fresh foods, produce and gourmet beverages. 

Kroger, like other large-scale retailers, has a history of investing in new store concepts. But those investments haven't panned out lately. A few months after launching Fresh Eats, Kroger closed its Main & Vine concept store in Washington state after less than two years in business. Main & Vine’s value proposition was healthy, affordable food and features like cooking demos and a plant wall. In December, Kroger divested its stake in organic grocer Lucky’s Market. Lucky’s filed for bankruptcy in January.

With so many competing grocers testing small-format stores, Kroger may be looking for another opening. The Giant Company has opened three Heirloom Market locations in Philadelphia, while Publix has opened several Greenwise Market stores in the Southeast. Last week, Amazon made a splash with Go Grocery, a 10,400-square-foot store with no checkouts and a full assortment of produce, groceries and grab-and-go meals.