Government document on the future of retailing that describes supermarket operations
Planning controls and store size and location
Land use planning controls have had a major impact on store size and location.
Limits on specific types of development can have multiple and direct competitive effects. For example limits on the development of food and non-food superstores:
There is a range of indirect competitive effects on consumer access to stores and on traffic generation. These factors may be of direct concern, however, to other aspects of public policy. In terms of a direct impact on competitiveness, we see in the grocery sector the success of stores that have gained permission and are operating, particularly, but not only, in medium sized communities where quasi-monopoly positions are achieved as a result of a combination of market size and planning policy. We also see the search for other competitive opportunities with moves back into town centres and onto filling station forecourts by the major firms. The large firms are also exploring non-store provision to enable continuation of their market penetration and hence continued improvement of their competitive position.
Food retailers have adopted similar responses to the constraints created by planning policy :
J Sainsbury operate six distinct store formats:
ASDA has three formats:
Tesco portfolio of retail formats in
Source: Tesco Annual Report (1999)
Number of Stores
Average sales area
Very large stores including an extensive range of non-food categories
Large stores offering a full food range and many non-food products
Core superstore range, but within a more compact environment
Supermarkets selling food ranges and household goods
City-centre stores providing convenience foods
Petrol station forecourt shops selling a limited range of everyday products
Non-store 'internet' service based on full store ranges with delivery
Tesco Financial services
Internalised concession accessed through the fixed store network
Supermarkets take account of their customer base.
Social change affecting household and personal consumption
These changes encourage a fragmentation of personal and household shopping patterns
Social changes in the attitudes and behaviours of consumers alter the effectiveness of different types of retailing in terms of their productivity, profitability and so their competitiveness. Retailers seek more competitiveness by responding to these social changes. Several actions of retailers illustrate attempts to increase competitiveness by responding to social change.
Changing shopping behaviour in the convenience sector has encouraged Sainsbury to identify several different segments within the convenience shopper group using Sainsbury Local stores. The names Sainsbury's have given to the segments indicate their behaviour: grab and go perishable top-up, impulse, habitual, and distress.
retailers have strengthened their corporate cultures to relate to changed attitudes
of consumers. Examples are Body Shop, IKEA, Planet Organic, and
Demand for new products, for example mobile phones, has generated new competitive opportunities for The Link and Carphone Warehouse. Higher levels of home ownership have extended competitive opportunities for DIY retailers and for kitchen and bathroom retailers.
in personal mobility not only affect the behaviour of shoppers but also provide
opportunities for retailers. For example Halfords,
with over existing
Not all these formats will be developed in full but the experimental approach illustrates the response to consumer demands in different situations.