U.K. Supermarkets Target Smaller Footprints

NACSonline
March 28

Retailers such as Tesco are opening smaller convenience stores in town centers.

​STANSTED SOUTH, England – Big is no longer beautiful to U.K. supermarket chains. British grocery stores are focusing attention on opening smaller convenience outlets in town centers, Bloomberg reports. In the United States, big-box retailers like Walmart are following a similar strategy by opening smaller footprint locations in more urban areas.

Tesco opened 150 convenience stores in 2011, while Carrefour and Royal Ahold have turned to smaller stores as more consumers want to shop close to home or online. Euromointor International found that consumers favor small shopping trips on a more frequent basis than bigger buys once a week, said Jon Wright, head of retailing research. Globally, the convenience market jumped 6.1% in 2011 to reach $319 billion—that’s around 6% of total grocery sales, Euromonitor said.

Dalton Philips, CEO of William Morrison Supermarkets Plc., predicts that huge stores will soon “be a blip in the pages of retail history.” Morrison recently announced plans to open more convenience stores in the coming years. The grocery chain will spend 100 million pounds on convenience stores and increasing the number of nonfood online offerings.

However, Carrefour isn’t quite ready to say hypermarkets are a thing of the past. Recently the chain upgraded 81 of its 500 superstores in western Europe. Noel Prioux, who heads the French interest, said hypermarkets can still be relevant as long as retailers make adjustments. “We were one of the first people in this business,” said Prioux. “We didn’t get things right from the start, but I think that now, with our new organization, we can capture this new potential.”​