Global Hypermarket Revitalization Strategies

Date: March 1, 2011
Pages: 62
Price:
US$ 2,795.00
Publisher: Verdict
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: G1F01B7DE68EN
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Global Hypermarket Revitalization Strategies
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Global License: US$ 13,125.00


Introduction

The hypermarket has grown as a popular grocery format, providing a one-stop shopping destination. However emerging consumer trends, along with stricter legislation on expansion, is prompting superstore retailers to adapt the format in the form of innovative instore services, development of click and collect and downsized stores, resulting in an entirely new large format grocery store concept.

Features and benefits
  • Uncover range assortments and complementary instore services that can be used to attract shoppers and revive sales in large format stores.
  • Identify a variety of new ways to reinvigorate the layout of your hypermarket or supermarket by uncovering how other retailers have managed to do it.
  • Adapt the hypermarket size according to trends surrounding urbanization and household sizes by accessing demographic data covering global markets.
  • Develop innovative multi-channel strategies and consider alternative store formats by identifying the strategies of your competitors.
Highlights

Auchan's Chronodrive click and collect model in France allows customers to order products online and collect them at a suitable time from the Chronodrive warehouse. The service saves customers time as well as money on delivery costs. More importantly, the service is a cost effective way of boosting Auchan's revenue and extending its customer base.

Carrefour is consolidating its non-food offer to focus on the best performing categories, which will help it to boost store profitability. The health and beauty sales area has been extented by a substantial 40% with the addition of complementary services, such as a hairdressing unit, while the home department has been cut by 15%.

Just over three quarters of the 1,327 Kmart stores in the US have a pharmacy instore, acting as a complementary service to its health and beauty department. The pharmacies include a seasonal walk-in clinic at the majority of Kmart sites, such as during the flu season, with trained nurses to administer vaccinations.

Your key questions answered
  • What consumer trends are responsible for the overall change in the performance of hypermarkets? Is there evidence that hypermarkets are in decline?
  • How can I improve my store layout and what services should I offer to improve sales performance at my large store network?
  • How can I engage shoppers when they are conducting their grocery shopping and how can I better position myself as a food specialist?
  • Which products sold in hypermarkets are proving most resilient and which are damaging profit margins? How can I use the internet to maximise my offer?
  • How can I protect myself from the rising threat of the online and convenience store channels?

OVERVIEW

About the series
Summary

STRATEGIC ACTION POINTS

Ensure the online offering complements the physical store model
  Sell large ticket non-food items online
  Create a click and collect model to allow customers to pick up orders from a hypermarket
  Create a click and collect model by using a specialized warehouse as a pick-up point
  Extend the click and collect service to pedestrians and cyclists
Offer additional services and events to improve the shopper experience
  Add services that offer customers convenience to boost basket sizes
  Add eating areas to prolong customers' store visits
  Add services that are complementary to your product offering
  Host events that promote specialism in your core product area of food
  Add facilities that allow customers to complete other chores alongside their grocery shop
  Add electric vehicle charging points to your car park to promote sustainability initiatives
Rationalize your food and non-food categories
  Rationalize your SKU count across all categories
  Remove or cut down underperforming non-food categories, such as DIY and electricals
  Enhance the clothing offer to attract female customers, focusing strongly on childrenswear
  Extend the health and beauty department to capitalize on resilient spend in this category
  Improve the soft DIY and homewares offer
  Adapt the non-food proposition on a store-by-store basis to meet local demands
Modernize the store format and layout to better suit customers' needs
  Downsize the store to create a compact hypermarket
  Segment the store into clear departments to create a modular store layout
  Divide the store clearly into food and non-food by providing separate entrances
  Widen aisles and lower shelves to improve instore navigation for customers
  Add large, clear signage and banners to promote pricing and make products visible throughout the store
  Adapt the store to suit the rising population of elderly shoppers
Create an additional revenue stream by opening shopping centers in high footfall locations
  Open up hypermarkets as anchors to shopping centers
  Add leisure and entertainment facilities to your hypermarkets

STRATEGIC CONTEXT

Several developments are motivating hypermarket retailers to revitalize their format
  Social and demographic changes are impacting consumers' shopping patterns
  New channels are emerging as credible competitive threats to the hypermarket
A number of operational factors need to be taken into account by hypermarket retailers
  Rapidly developing urban areas are creating new catchment areas for hypermarket retailers
  Some retailers are considering creating an entirely new hypermarket format and brand
  The size of the hypermarket is changing to fit new locations
  The layout and design of a hypermarket may have to be amended to improve navigability for customers
  Category choice across non-food may have to be rationalized to improve sales densities and margins
  Changing consumer demand is prompting retailers to rationalize their food product assortment
  Adding additional services can improve the hypermarket offer
  Adapting pricing strategies is a fundamental consideration for retailers looking to improve footfall
  Utilizing the online channel can complement sales at physical hypermarkets
  Other store formats and channels can act as an alternative point of expansion

STRATEGY IN FOCUS: RETAILER CASE STUDIES

Downsizing formats allows hypermarket operators to enter new catchment areas
  Downsized stores are proving a better fit for changing demographics
  Carrefour's hypermarkets are gradually decreasing in size
  Meijer launched a small format in the suburbs of Chicago in 2010
  Walmart is using a smaller format to target untapped customers in rural regions in growth markets
Retailers are increasingly opening hypermarkets in shopping centers
  Shopping center development is a profitable venture for hypermarket retailers
  Aeon's shopping center subsidiary is outperforming its retail business
  Carrefour's partnership with Klépierre has allowed it to boost footfall to its hypermarkets that anchor malls
Hypermarket retailers are adapting their store layouts to improve mobility
  New hypermarkets have a more modular and spacious layout
  The new Carrefour Planet stores feature segmentation by category
  The refurbished Tesco Extra store in Wembley features a departmentalized non-food area
  German grocer Edeka has adapted the layout of selected stores in response to the aging population
Retailers have been rationalizing their product counts to reduce operational costs
  Underperforming SKUs are being cut down to reduce inventories and simplify the supply chain
  The SKU count across food categories in Carrefour hypermarkets has been rationalized
  Supervalu plans to complete the roll out of its SKU rationalization strategy by spring 2011
Hypermarket retailers are complementing instore services with their online channel
  Online shopping is on the rise as consumers seek convenience and price transparency
  Auchan has formed the E-Drive subsidiary to manage the click and collect business
  Casino is increasingly selling the bulk of its non-food items via Cdiscount
Extra services and events are being added to utilize space in hypermarkets
  Retailers are promoting their expertise in a few chosen categories through complementary services
  Additional services and events have been introduced to Carrefour Planet
  Kmart's instore services focus on healthcare and everyday chores
  Loblaw has diversified into mobile phone stores and continues to expand its cookery courses
Retailers are strengthening their non-food sales by focusing on high performing categories
  Curbed spending across non-food has prompted retailers to concentrate on the best performing categories
  Carrefour has segmented its Planet store format to concentrate on a rationalized selection of non-food categories
  Casino is drastically rationalizing its non-food offer at Géant Casino to enhance margins
  Albert Heijn only recently introduced comprehensive non-food ranges in its large format stores

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