Once upon a time, there was an era when the hypermarket format was exciting. Indeed, each hyper opening caused a frisson.
Sadly, I am old enough to remember that era. The opening of Asda’s 100th hyper was a cause for celebration – with a tie (polyester, naturally) the official memento, I recall.
Visible from my current office, its Isle of Dogs store is truly from a different age. But are hypermarkets now relevant enough – to sufficient consumers – to have a viable economic future?
Spending some time in Russia in the last few years, I can quite see how they still generate that excitement in emerging markets. If the hyper stands for a wealth of goods at attractive prices, under one roof, with ample car-parking, no wonder the average Muscovite prefers to visit them, rather than risk contracting frostbite whilst visiting numerous kiosks and stalls in an open market.
The hyper – or even a purely non-food equivalent, such as an Ikea – is a monument to consumerism that the Russians appear to want to embrace warmly.
But in the UK, or indeed France, the odds are looking a lot less favourable. Growth of ready meals has halted, with some renewed interest in buying raw ingredients – driving more frequent shopping trips, where local wins out.
Some of the hypermarket format’s originally targeted non-food categories are looking less economically compelling. Electricals, for example, at least in the small domestic appliance and mobile music categories, are now sold by all sorts of other retail formats.
Hypermarket operators have fairly uniformly failed to provide any skilled sales staff to help shoppers cope with the level of technological progress that manufacturers understandably deem necessary to keep consumer demand stimulated. CDs are yesterday’s story, and where does a hypermarket feature in acquiring a downloaded album?
Overarching all this is of course the impact of the web. You can get better advice on a washing machine from a decent website than you can from hypermarket staff (if you can
Still perhaps less of an influence in France, here in Blighty online food shopping is now an embedded part of everyday life for many households, particularly young families.
Remember any food shopping trip takes some time. And a trip round a 100,000 sq ft store takes a lot of time. Size and range will surely act as a deterrent for some consumers rather than a magnet that was the received thinking some years back.
Leclerc, my nearest hypermarket in France, compounds this by somehow (with the French planning system being even more constipated than our own) achieving extensions that take its unshoppability to a new level.
Elephants have a complex, apparently deeply felt, and protective grieving process – which starts with an understandable reluctance to acknowledge death. Perhaps the retail community is at that stage in appreciating mortal symptoms for one of its formats.
- Paul Smiddy head of retail research, HSBC