Asda recently announced it was to slow the pace of its openings in London and Sainsbury’s meanwhile stated that it was, in sharp contrast, to continue to open new units at a cracking rate.
We’re talking about convenience stores, which have certainly been in the news of late and the coverage has highlighted how the strategies of the major grocers are diverging from the earlier gung-ho approach to expansion to which they all steadfastly adhered.
Of the differing approaches, Sainsbury’s is an interesting one as not only would it like to double the number of its regular (measuring up to 3,000 sq ft) convenience stores to 1,500 but it is trialing a 1,000 sq ft outlet that has been dubbed its ‘micro’ format.
Focused largely on fresh produce and food-to-go items, the company reckons there could be the potential for 1,000 of these mini outlets in particularly densely populated areas. These locations would clearly be unsuitable for any of the larger Sainsbury’s formats and could act as in-fills for its regular convenience stores.
What is fascinating about this move is that it is yet another step down to ever more compact formats for the major supermarkets. It takes them further away from their earlier strategic objectives of opening ever larger units. This was a model that some of the larger global players like Tesco and Asda’s parent company Wal-Mart sought to export around the world.
They saw these large hypermarkets as the progressive step-on from the fresh market stores that predominate around the world in emerging economies and which are often not much bigger than kiosks. They rely on very frequent shopper visits for small average baskets – offering the ultimate convenience.
This is exactly what the UK and other developed economies are now moving more towards as consumers continue to change their shopping habits towards regular visits to smaller stores located in convenient locations. The big bulky weekly or fortnightly shopping trips have fallen well out of favour.
The tables have clearly been completely turned and a U-turn in strategies is taking place. We can no longer sell a concept to consumers in emerging economies that we are now rejecting, especially as it comes at a time when we are embracing the same style of outlet that their populations typically frequent.
Expect to see more of the ‘micro’ style stores that Sainsbury’s is now championing.
Glynn Davis, editor of Retail Insider
K3 Retail deliver multi-channel solutions that enable retailers to create joined up shopping experiences for their customers whether they choose to buy on-line, direct, in-store or via mobile. It has over 20 years’ experience delivering award winning solutions, to more than 175 internationally recognised retail brands.