Tesco's entry into US with it's small store format is changing the Retail Formats for big Retailers in US.

Miles of Aisles for a Gallon of Milk? Not Here - NYTimes.com (registration required)

After years of building bigger stores — many larger than a football field and carrying 60,000 items — retailers are experimenting with radically smaller grocery stores that emphasize prepared meals, fresh produce and grab-and-go drinks.

The idea is to lure time-starved shoppers who want to pick up a few items or a fast meal without wandering long grocery aisles or paying restaurant prices.

Safeway has opened a smaller-format store in Southern California, and Jewel-Osco is building one in Chicago. Wal-Mart plans to open four “Marketside” stores in the Phoenix area this fall, and Whole Foods Market is considering opening smaller stores.

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The biggest push in such stores is coming from the British retailer Tesco, which made a splashy entry into the United States last fall, opening a 10,000-square-foot Fresh & Easy Neighborhood Market in Las Vegas.

Since then, Tesco has opened 72 stores in Nevada, Arizona and Southern California.