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Woolworths plans to launch a cashless micro store called “MetroGo”

Woolworths Group Ltd (ASX: WOW) is launching a new concept, it’s a tiny cashless store called “MetroGo” in Sydney according to reporting by News.com.au.

This new MetroGo store will only have one aisle and will not accept any notes or coins. Shoppers will be able to use their card or their phone (with the ‘Scan & Go app) to pay for items.

What’s going to fit in this tiny 50sqm store (compared to a normal 2,500sqm supermarket)? Well, the store will have cold drinks, a few bakery items, sandwiches, salads, yoghurt and some everyday essentials. Around half the store will contain packaged fresh fruit and food.

Woolworths Metro stores general manager Justin Nolan told news.com.au that the products will be aimed at breakfast, lunch and snacking with opening times between 6am to 6pm – clearly aiming at office workers.

Indeed, it’s a specific office worker group this tiny store is aimed at because the store is one the ground level of the Woolworths’ building which contains its online and innovation arm, although anyone from the public can walk in.

It will be interesting to see how profitable this store can be. It will be run by just two staff at a time.

For now, there isn’t a plan to launch this concept nationwide. Although I imagine that will change if the store does well. Stores like 7-Eleven will have some tiny competition!

Foolish takeaway

This one store is immaterial to Woolworths’ earnings. But if it proves a hit the concept could become decently sized because market research firm IbisWorld says the convenience store industry generates $4.7 billion of revenue each year.

Looking at the Woolworths share price, it looks expensive to me, even if interest rates have somewhat justifiably boosted valuations.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.