Throughout the past decade, big-box retailers and department store chains have experimented with small-format stores to reach more shoppers in urban areas they’ve historically missed out on. From 2016 to 2021, Target had been adding more than 20 small-format stores each year, but now, of the 38 stores currently listed on Target’s website as opening soon, most are full-size Target stores and only five will be under 100,000sq ft (9.290m²). Additionally, Nordstrom reported in its annual report in March that it closed a service hub for its small-format concept Nordstrom Local this year and plans to reopen it as a storefront dedicated to personal styling. In 2023, Target closed four of its small-format stores in Washington, D.C., Minneapolis and Philadelphia, citing declining foot traffic as the primary reason for the closures.

Ikea plans to open eight new small-format Plan and Order Point stores this year where customers can order products for pickup or delivery. And it just broke ground on its first ground-up small-city store just outside of Dallas. The furniture retailer also plans to open an 80,000sq ft (7.200m²) location anchoring a new office tower in Manhattan set to be open for tenants by 2028.

Grocers including Whole Foods and Meijer have also opened small-format stores in recent months. Even Target still sees some potential in its urban concept moving forward. For some retailers, the decision to close certain small-format stores seems to be tied to rightsizing the entire fleet. In January, Macy’s reported it would close four of its small-format stores in 2025 alongside 62 full-size stores. Still, Macy’s annual report in March said that part of its $800mn in capital expenditures for 2025 is meant for opening more small-format stores. In 2023, Macy’s announced it would open up to 30 new small-format stores from 2024 through fall 2025, in addition to 12 small-format Macy’s and Bloomie’s locations that had already opened. The stores are about a fifth the size of full-size Macy’s stores with a smaller assortment and are aimed to expand into new areas or replace unproductive stores in existing markets.