Dive Brief:

• Schnuck Markets plans to include a food hall with branches of three local restaurants inside a supermarket it is completely renovating in the St. Louis suburb of Kirkwood, Missouri, the grocer announced Wednesday.
• The store at 10233 Manchester Road will also include a new produce section, a self-service nut butter area and a store-within-a-store operated by Arch Apparel, a clothing and footwear company based in St. Louis.
• ​Schnucks' decision to invite other retailers to occupy space within the renovated supermarket reflects a growing trend among grocers looking to position their stores as destinations for shoppers.

Dive Insight:

The locally focused food hall will play a central role as Schnucks looks to take its approach to food retailing in a new direction.

The participating restaurants, which include The Shaved Duck, Seoul Taco and The Greek Kitchen, will each run their own service counters but share a common seating area. After recently expanding partnerships with local restaurants around St. Louis to sell grab-and-go items, the food hall provides a new avenue for the grocer to team up with food establishments.  

The concept resembles the in-store dining options other grocers are adding to their stores. In March, The Giant Company opened a new flagship location in Philadelphia with a pair of restaurant operators based in or near the city, including a Mexican restaurant and the Saladworks fast-casual chain, among the eateries in its food hall. 

A few months before, Saladworks debuted a location inside a Kroger store in Cincinnati.

Schnucks' announcement that Arch Apparel will have space in the refreshed store follows decisions by chains such as Hy-Vee and Balls Food Stores to host other retailers in their supermarkets. Stores operated by DSW Designer Shoe Warehouse opened inside several Hy-Vee stores last year, while a Balls-owned Price Chopper store in Kansas City, Missouri, became home to a store run by cannabidiol product manufacturer American Shaman in August.

In addition to hosting restaurants and a clothing store, the renovated Schnucks store will offer kombucha on tap, a larger selection of grab-and-go meals, a new natural living section and an improved liquor and cold beer area. The 60,000-square-foot location opened in 1987, replacing a store built earlier.

Beyond partnering with other food sellers with a presence in its markets, Schnucks has recently stepped up its efforts with local growers. In June, the company said it would work with logistics and marketing firm Foodshed.io to expand and build new relationships with farmers located no more than a five-hour drive from any one of its stores.

The remodel builds on Schnucks' focus on fresh. Last month, Schnucks said it was launching a small-format concept with a heavy emphasis on fresh departments. The first of those stores, to be known as Schnucks Fresh, is scheduled to open in Jasper, Indiana, this summer. Last summer, Schnucks debuted a new natural food store format called EatWell in Columbia, Missouri, which includes natural food items, organic and locally sourced products, and a natural living department.