A supermarket, a form of grocery store, is a self-service store offering a wide variety of food and household merchandise, organized into departments. It is larger in size and has a wider selection than a traditional grocery store, also selling items typically found in a convenience store, but is smaller and more limited in the range of merchandise than a hypermarket or superstore.
The supermarket typically comprises meat, fresh produce, dairy, and baked goods departments, along with shelf space reserved for canned and packaged goods as well as for various non-food items such as household cleaners, pharmacy products and pet supplies. Most supermarkets also sell a variety of other household products that are consumed regularly, such as alcohol (where permitted), medicine, and clothes, and some stores sell a much wider range of non-food products.
The traditional suburban supermarket occupies a large amount of floor space, usually on a single level. It is usually situated near a residential area in order to be convenient to consumers. Its basic appeal is the availability of a broad selection of goods under a single roof, at relatively low prices. Other advantages include ease of parking and frequently the convenience of shopping hours that extend far into the evening or even 24 hours a day. Supermarkets usually allocate large budgets to advertising, typically through newspapers. They also present elaborate in-store displays of products. The stores are usually part of corporate chains that own or control (sometimes by franchise) other supermarkets located nearby—even transnationally—thus increasing opportunities for economies of scale.
Supermarkets typically are supplied by the distribution centres of their parent companies, such as Loblaw Companies in Canada, which operates thousands of supermarkets across the nation. Loblaw operates a distribution centre in every province—usually in the largest city in the province.
Supermarkets usually offer products at low prices by reducing their economic margins. Certain products (typically staple foods such as bread, milk and sugar) are occasionally sold as loss leaders, that is, with negative profit margins. To maintain a profit, supermarkets attempt to make up for the lower margins by a higher overall volume of sales, and with the sale of higher-margin items. Customers usually shop by placing their selected merchandise into shopping carts (trolleys) or baskets (self-service) and pay for the merchandise at the check-out. At present, many supermarket chains are attempting to further reduce labor costs by shifting to self-service check-out machines, where a single employee can oversee a group of four or five machines at once, assisting multiple customers at a time.
A larger full-service supermarket combined with a department store is sometimes known as a hypermarket. Other services offered at some supermarkets may include those of banks, cafés, childcare centres/creches, photo processing, video rentals, pharmacies and/or petrol stations.
History
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| A supermarket in Sweden in 1941 |
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| Cashiers and check-out area of supermarket in a United States Army community in 1945 |
In the early days of retailing, all products generally were fetched by an assistant from shelves behind the merchant's counter while customers waited in front of the counter and indicated the items they wanted. Also, most foods and merchandise did not come in individually wrapped consumer-sized packages, so an assistant had to measure out and wrap the precise amount desired by the consumer. This also offered opportunities for social interaction: many regarded this style of shopping as "a social occasion" and would often "pause for conversations with the staff or other customers." These practices were by nature very labor-intensive and therefore also quite expensive. The shopping process was slow, as the number of customers who could be attended to at one time were limited by the number of staff employed in the store.
The concept of a self-service grocery store was developed by American entrepreneur Clarence Saunders and his Piggly Wiggly stores. His first store opened in Memphis, Tennessee, in 1916. Saunders was awarded a number of patents for the ideas he incorporated into his stores. The stores were a financial success and Saunders began to offer franchises. The Great Atlantic and Pacific Tea Company (A&P) was another successful early grocery store chain in Canada and the United States, and became common in North American cities in the 1920s. The general trend in retail since then has been to stock shelves at night so that customers, the following day, can obtain their own goods and bring them to the front of the store to pay for them. Although there is a higher risk of shoplifting, the costs of appropriate security measures ideally will be outweighed by reduced labor costs.
Early self-service grocery stores did not sell fresh meats or produce. Combination stores that sold perishable items were developed in the 1920s.
Historically, there was debate about the origin of the supermarket, with King Kullen and Ralph's of California having strong claims.Other contenders included Weingarten's Big Food Markets and Henke & Pillot. To end the debate, the Food Marketing Institute in conjunction with the Smithsonian Institution and with funding from H.J. Heinz, researched the issue. It defined the attributes of a supermarket as "self-service, separate product departments, discount pricing, marketing and volume selling."
It determined that the first true supermarket in the United States was opened by a former Kroger employee, Michael J. Cullen, on August 4, 1930, inside a 6,000 square foot former garage in Jamaica, Queens in New York City. The store, King Kullen, (inspired by the fictional character King Kong), operated under the slogan "Pile it high. Sell it low." At the time of Cullen's death in 1936, there were seventeen King Kullen stores in operation. Although Saunders had brought the world self-service, uniform stores and nationwide marketing, Cullen built on this idea by adding separate food departments, selling large volumes of food at discount prices and adding a parking lot.
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| A Safeway advertisement from the 1950s. |
Other established American grocery chains in the 1930s, such as Kroger and Safeway at first resisted Cullen's idea, but eventually were forced to build their own supermarkets as the economy sank into the Great Depression, while consumers were becoming price-sensitive at a level never experienced before. Kroger took the idea one step further and pioneered the first supermarket surrounded on all four sides by a parking lot.
Supermarkets proliferated across Canada and the United States with the growth of automobile ownership and suburban development after World War II. Most North American supermarkets are located in suburban strip malls as an anchor store along with other smaller retailers. They are generally regional rather than national in their company branding. Kroger is perhaps the most nationally oriented supermarket chain in the United States but it has preserved most of its regional brands, including Ralphs, City Market and King Soopers.
In Canada the largest such chain is Loblaw, which operates stores under a variety of regional names, including Fortinos, Zehrs and the largest, Loblaws, (named after the company itself). Sobeys is Canada's second largest supermarket with locations across the country, operating under many banners (Sobeys IGA in Quebec).
In the United Kingdom, self-service shopping took longer to become established. Even in 1947, there were just ten self-service shops in the country. In 1951, ex-US Navy sailor Patrick Galvani, son-in-law of Express Dairies chairman, made a pitch to the board to open a chain of supermarkets across the country. The UK's first supermarket under the new Premier Supermarkets brand opened in Streatham, South London, taking ten times as much per week as the average British general store of the time. Other chains caught on, and after Galvani lost out to Tesco's Jack Cohen in 1960 to buy the 212 Irwin's chain, the sector underwent a large amount of consolidation, resulting in 'the big four' dominant UK retailers of today: Tesco, Asda (owned by Wal-Mart), Sainsbury's and Morrisons.
In the 1950s, supermarkets frequently issued trading stamps as incentives to customers. Today, most chains issue store-specific "membership cards," "club cards," or "loyalty cards". These typically enable the card holder to receive special members-only discounts on certain items when the credit card-like device is scanned at check-out.
Traditional supermarkets in many countries face intense competition from discount retailers such as Wal-Mart, Tesco in the UK, and Zellers in Canada, which typically are non-union and operate with better buying power. Other competition exists from warehouse clubs such as Costco that offer savings to customers buying in bulk quantities. Superstores, such as those operated by Wal-Mart and Asda, often offer a wide range of goods and services in addition to foods. The proliferation of such warehouse and superstores has contributed to the continuing disappearance of smaller, local grocery stores; increased dependence on the automobile; suburban sprawl because of the necessity for large floorspace and increased vehicular traffic. Some critics consider the chains' common practice of selling loss leaders to be anti-competitive. They are also wary of the negotiating power that large, often multinational retailers have with suppliers around the world.
Growth in developing countries
There has been a rapid transformation of the food retail sector in developing countries, beginning in the 1990s. This applies particularly to Latin America, South-East Asia, China and South Africa. However, growth is being witnessed in nearly all countries. With growth, has come considerable competition and some amount of consolidation. The growth has been driven by increasing affluence and the rise of a middle class; the entry of women into the workforce; with a consequent incentive to seek out easy-to-prepare foods; the growth in the use of refrigerators, making it possible to shop weekly instead of daily; and the growth in car ownership, facilitating journeys to distant stores and purchases of large quantities of goods. The opportunities presented by this potential have encouraged several European companies to invest in these markets (mainly in Asia) and American companies to invest in Latin America and China. Local companies also entered the market. Initial development of supermarkets has now been followed by hypermarket growth. In addition there were investments by companies such as Makro and Metro in large-scale Cash-and-Carry operations.
While the growth in sales of processed foods in these countries has been much more rapid than the growth in fresh food sales, the imperative nature of supermarkets to achieve economies of scale in purchasing, means that the expansion of supermarkets in these countries has important repercussions for small farmers, particularly those growing perishable crops. New supply chains have developed involving cluster formation; development of specialized wholesalers; leading farmers organizing supply; and farmer associations or cooperatives. In some cases supermarkets have organized their own procurement from small farmers; in others wholesale markets have adapted to meet supermarket needs.
Larger supermarkets in North America and in Europe typically sell a great number of items among many brands, sizes and varieties, including:
Alcoholic beverages (as state/provincial and/or local laws allow)
Baby foods and baby-care products such as disposable diapers
Breads and bakery products (many stores may have a bakery on site that offers specialty and dessert items)
Books, newspapers, and magazines, including supermarket tabloids
Bulk dried foods such as legumes, flour, rice, etc. (typically available for self-service)
Canned goods and dried cereals
Car-care products (motor oil, cleaners, waxes)
CDs, Audio cassettes, DVDs, and videos (including video rentals)
Cigarettes and other tobacco products
Clothing and footwear (typically a general, limited assortment)
Confections and candies
Cosmetics
Dairy products and eggs
Delicatessen foods (ready-to-eat)
Diet foods
Electrical products such as light bulbs, extension cords, etc.
Feminine hygiene products
Financial services and products such as mortgages, credit cards, savings accounts, wire transfers, etc. (typically offered in-store by a partnering bank or other financial institution)
Flowers
Frozen foods and crushed ice
Fresh produce, fruits and vegetables
Greeting cards
House-cleaning products
Housewares, Dishware and cooking utensils, etc. (typically limited)
Laundry products such as detergents, fabric softeners, etc.
Lottery tickets (where operational and legal)
Luggage items (typically limited)
Meats, fish and seafoods (some stores may offer live fish and seafood items from aquarium tanks)
Medicines and first aid items (primarily over-the-counter drugs, although many supermarkets also have an on-site pharmacy)
Nonalcoholic beverages such as soft drinks, juices, bottled water, etc. (some stores may have a juice bar that prepares ready-to-drink freshly squeezed juices, smoothies, etc.)
Personal hygiene and grooming products
Pet foods and products
Seasonal items and decorations
Snack foods
Tea and Coffee (some stores may have a commercial-style grinder, typically available for self-service, and/or a staffed coffee bar that prepares ready-to-drink coffee and tea beverages)
Toys and novelties
In some countries, the range of supermarket merchandise is more strictly focused on food products, although the range of goods for sale is expanding in many locations as typical store sizes continue to increase globally.
Typical store architecture
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| A Kroger store in the Gulfton area of Houston |
Most supermarkets are similar in design and layout due to trends in marketing. Fresh produce tends to be located near the entrance of the store. Milk, bread, and other essential staple items are usually situated toward the rear of the store and in other out-of-the-way places, purposely done to maximize the customer's time spent in the store, strolling past other items and capitalizing on impulse buying.
The interior of a Loblaws supermarket in Toronto
The front of the store, or "front end'" is the area where point of sale machines or cash registers are usually located. Many retailers also have implemented self-checkout devices in an attempt to reduce labor costs.
Criticisms
Supermarkets, in general, tend to narrow the choices of fruits and vegetables by stocking only varieties with long storage lives,
In the United States, major-brand supermarkets often demand slotting fees from suppliers in exchange for premium shelf space and/or better positioning (such as at eye-level, on the checkout aisle or at a shelf's "end cap"). This extra supplier cost (up to $30,000 per brand for a chain for each individual SKU) may be reflected in the cost of the products offered. Some critics have questioned the ethical and legal propriety of slotting fee payments and their effect on smaller suppliers .
In Britain supermarkets have been accused of squeezing prices to farmers, forcing small shops out of business, and often favouring imports over British produce.
Supermarkets can generally retail at lower prices than traditional corner shops and markets due to higher volume throughput. This has led to small businesses losing customers and closing in many areas, which can be seen as an adverse effect on the local infrastructure. (Others view supermarkets as having better economies of scale.) In 2000, the Finnish government drafted the new shopping hours law in such a way, that shops with a sub-supermarket floor area (<400m2) have year-around Sunday opening rights, while supermarkets are permitted to stay open on Sundays only during the summer and mid-winter months.
In New Zealand, supermarkets have been accused of buying fresh produce from growers at low prices and selling with ridiculously high mark-ups, sometimes as high as 500%.
See also
Fast moving consumer goods
Grocery trading
(souece:wikipedia)
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