business news in context, analysis with attitude

A new study suggests that one-stop shopping is the top priority in developing retail markets, which is creating growth opportunities for large format food retailers including Wal-Mart, Carrefour, Metro and Tesco.

The study, by the Retail Forward marketing research firm, reports: “Although the desire to support ‘mom and pop’ retailers remains high, particularly in developing markets, large format food retailers stand to gain as long as their strong low-price perception can be exported. While Wal-Mart was unable to leverage this strength in Germany where the hard discount format is well-established, in most countries where the retailer has a presence its low-price perception in food is strengthening. And, research indicates that the big hypermarket and supercenter formats at the forefront of global expansion by Wal-Mart and other leading food retailers, continue to gain shoppers in most markets.

Among the other conclusions reached by the study:

• “Global food retailing and supply chains are being shaped by rising retail competition. The impact is evident across countries, especially among less developed retail markets. A majority of shoppers in all but three of the countries surveyed say they have more choices to shop for food than a year ago.”

• “Wal-Mart's prospects are strong among consumers globally, particularly in countries where it currently operates. Consumers in Brazil, Mexico and China express the strongest interest in having a Wal-Mart store nearby. Except for Japan and Germany, interest in shopping at Wal-Mart increased from 2005 in the countries where Wal-Mart already has a presence.”

• “Hypermarkets and supercenters have overtaken drug stores as the format of choice in health and beauty care in many countries. The study also reports that conventional supermarkets remain the mainstay of weekly grocery shopping trips in many countries while deep- or hard-discounters are expanding rapidly outside of Europe. Specialty food stores remain popular shopping venues for fresh foods in many countries.”
KC's View:
The world is not only flat, but increasingly homogenous. While we know that in many ways this is a phenomenon to be embraced, there are elements of it that we find to be quite sad.