Hypermarkets: The engine of future retail growth

Hypermarkets have caught imagination of shoppers all over the country, largely on account of low prices and wide variety of merchandise that they are able to offer to their customers. All research studies suggest great future for them. While, Price Waterhouse Coopers have predicted a major part of estimated US$ 410 billion investment in modern retail in the next five years to go in the hyper and supermarket formats, many experts believe that, in less than five years, the country could see the emergence of more than 1,000 hypermarkets.

Just to cite an example, the UAE based LuLu group, as reported earlier, is setting up a 1,80,000 sq. ft. hypermarket in Kochi compared to Shoppers’ Stop 1,00,000 sq. ft. big “Hypercity” in Mumbai, which presently is the country’s biggest hypermarket.

While, Hypercity, Big Bazaar, Star Bazaar, 10 Acres, etc. are already attracting enormous customer attention, Ambanis, Bhartis, Carrefour, Tescos, and many more big names of the retail world are either implementing or fine tuning their business plans to set up even bigger and better hypermarkets. Clearly, hypermarkets are going to fuel the future growth.

While, we have been reporting on the moves being made by local and foreign players in this arena, we thought it fit to include a quick rundown on their origin, evolution and perceptions in different countries across the globe:

HypercityA “hypermarket” is a superstore which combines a supermarket and a department store. The result is a gigantic retail facility, which carries an enormous range of products under one roof, which ideally should make available to customer all her weekly routine needs in a single trip. Due to their large footprints, a typical Wal-Mart Supercenter covers 150,000 square feet, while a typical Carrefour covers 210,000 square feet of space. These stores are typically single-level enterprises, most of which, except on major holidays, remain open for long hours.

Wal-Mart (USA), Carrefour (France) and Tesco (UK) are the world’s three largest hypermarket stores.

The term Hypermarche’ (French) was originally coined by Carrefour in 1962, however, the credit for pioneering the concept goes to Fred Meyer chain, which set up the first hypermarket in 1931 in Portland in the US. Fred Meyer is now a part of Kroger, the largest grocery chain in the US.

Although, the concept of hypermarkets is very popular in Japan and many other countries, it is not so popular in Germany due to statutory restrictions on size, timing, etc. Metro AG, which recently acquired the business of Wal-Mart in Germany is the biggest hypermarket chain in that country. After the success of super and hypermarkets, and amid fears that all smaller stores would be forced out of business, France has, in fact, enacted laws that makes it difficult to build them and has also restricted the amount of economic leverage that hypermarket chains can impose upon their suppliers.

Japanese hypermarkets, in contrast, may contain restaurants, Net cafes, full range of groceries and merchandise and beauty salons among others within the same premises. Jusco, Ito Yokado, etc. are examples of widely spread hypermarkets in Japan. A recent trend has been to combine the dollar-store concept with the hypermarket, giving rise to the “hyakkin (100 Yen) plazas” in Japan. The Tokyo Hyper fish market, the world’s largest fishmarket, is a hypermarket as well.

Hypermarkets are also very controversial in the US and face opposition from preservationists who feel they destroy conventional grocers and supermarkets. There is strong competition from more focused discount stores. There are also legal restrictions on the size of stores, the pricing policy and opening times.

Source: Wikipedia


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