From http://www.scotland.gov.uk/cru/kd01/blue/retail-06.htm

Scottish Government document on the future of retailing that describes supermarket operations in Britain with specific references to Tesco,

J. Sainsbury, ASDA and the car maintenance and bicycle retailer Halfords.

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

J Sainsbury operate six distinct store formats:

• Savacentre: store of over 6,000 sq.m. with a wide range of food and non-food. Some large food superstores are in process of being converted to this format.
• Superstore: stores typically in the range 2,800-6,000 sq.m. with a deep offer in foods and substantial non-food offer.
• Supermarket: a standard food and grocery supermarket of 1,400-2,800 sq. m.
• Country town: a small supermarket, typically 900-1,800 sq. m. suited to small towns with an substantial external catchment population
• Central: typically 750-1,100 sq. m. located in city centres and having four main product groups – snacks, meals, fresh foods and groceries
• Local: a convenience store of 250-300 sq. m. serving small communities or in locations with a large volume of passing pedestrian traffic, for example in railway stations.

ASDA

ASDA has three formats:

• Superstore: the core format with stores typically 2.300-5,500 sq. m.
• Hypermarket: stores over 5,500sq. m designed as a destination format for foods and non-foods
• Supercentres: stores over 9,300 sq. m. with a full range of food and non-food aimed to be a destination format across many product areas. Although already in the planning stage prior to the Wal-Mart acquisition this format will not be operational until 2000. Smaller than the Wal-Mart of the USA this is likely to become the UK Wal-Mart store.

TESCO

Tesco portfolio of retail formats in UK in 1999

Source: Tesco Annual Report (1999)

Supermarkets take account of their customer base.

Social change affecting household and personal consumption

Examples are:

• changes in housing tenure, [e.g. in favour of home ownership],
• changes in consumer mobility [e.g. higher levels of car ownership],
• changes in family structures [e.g. more one person households],
• changes in ownership of wealth [e.g. polarisation of incomes],
• attitudinal changes of consumers [e.g. in respect of on food product safety],
• changes in social values of consumers [e.g. environmental awareness, vegetarianism],
• changes in time-money trade-offs [e.g. willingness to pay higher prices to save time],
• Changes in consumer attitudes to shopping [e.g. having different approaches to shopping motivation at different times and in different situations].

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.

Some retailers have strengthened their corporate cultures to relate to changed attitudes of consumers. Examples are Body Shop, IKEA, Planet Organic, and Peckhams.

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.

Changes in personal mobility not only affect the behaviour of shoppers but also provide opportunities for retailers. For example Halfords, with over existing 400 High Street and superstore units, were trialing in 1999 seven new formats aimed at shoppers in different situations and with different needs in respect of their personal mobility:

• Warehouse-style superstore – 1860 sq. m. on trial in Swansea and includes a Ripspeed specialist accessories sub-shop
• Large scale superstore - 1395 sq. m. with sub-shops on trial in Gateshead
• Standard superstore – typically less than 1000 sq. m. but similar to the store at Gateshead
• Halfords Autoparts – a specialist shop of 465 sq. m. opened at Hyde
• An extended version of Autoparts.
• Halfords Bikehut – 280 sq. m. specialist bike shop in Havant
• Motorway service station shop – 55 sq. m. impulse goods shop 4 of a planned 14 have been opened.

Not all these formats will be developed in full but the experimental approach illustrates the response to consumer demands in different situations.