Here's an article from the New York Times which writes about the growth of down-sized supermarkets, based on a perhaps British model of small 'express' or 'local' supermarkets. (Mile of Aisles for Milk? Not here. May require free registration.) These can be pretty similar to, say, a very well-stocked 7-Eleven, though sometimes a good deal larger (the article quotes 10,000 sq.ft.) offering a range of essentials and not much more, but with the cachet of being within a supermarket concept, rather than overpriced convenience store (though your reality may differ ).
I don't think we've seen people clamouring for this yet in Australia — probably because our supermarkets are still rarely as large as some of the larger US or UK stores. We'll presumably see some more growth before consumers start complaining about too much choice! (Although the big players here have developed the city-centre smaller store concept a bit, I suspect this has more to do with burgeoning apartment-dwelling populations than a desire for simplified choices.)