Classification of Retail Formats

1. Supermarkets

These are large, low, cost, low margin, high volume, self-service operations designed to meet the needs for food, groceries and other non-food items. This format was at the forefront of the grocery revolution and today, it controls more than 30% of the grocery market in many countries. The most widely used definition is a store with a selling area of between 400 sq m and 2500 sq m, selling at least 70% foodstuffs and everyday commodities. Internationally, the size of these stores varies from 8000 to 20000 square feet. ASDA, safe way, Kroger and Tesco are some of the large international players. While there is no standardization on the parameters of what makes a supermarket in India, it is one of the fastest growing business formats in the country. Examples of supermarket in the India market scenario are Nilgiris, Foodworld, Subhiksha, food Bazaar and Vitan. Over the years, variations of this business model have also emerged they include the superstore and the combination store. A superstore store is larger than a conventional supermarket with at least 25000 items and more non food items such as General Merchandise and Health and Beauty Care (GM/HBC) items; while a combination store is a superstore an full-line pharmacy with GM/HBC product accounting for at least 15 % of sales.

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2. Hypermarket

The word hypermarket is derived from the French word hypermarche, which is a combination of a supermarket and a department store. This retail business format has evolved since its invention by retailer Carrefour in Sainte Genevieve de Bois near Paris, in the year 1963. A retail store with a sales area of over 2500 sqm, with at least 35% of selling space devoted to non-grocery product, is termed as a hypermarket. The stores occupy an area which ranges from anywhere between 80000 to 220000 sq.ft. and offer variety of food and non food product like clothes, jewellery, hardware, sports equipments, cycle, motor accessories, book, CD/DVD, videos TV, etc. Hypermarkets are today, synonymous with one stop shopping.

The cheapest prices will normally be found in these stores. Across the world, the world hypermarkets are usually part of Retail Park along with other shops, cafeterias and restaurants. They almost always have their own petrol station on the site, other facilities on the site include bank with cash machines photo processing shops and pharmacies. A key element of differentiation between the hypermarket and the other retail formats is that they are typically destination locations. The hypermarkets are designed to attract customers from a significantly large area with their low price offers, unique range and offers. Key retailers who operate in this business model are Carrefour, Wal-Mart, Meijer, Target, Tesco and Asda Etc. Examples of Hypermarket in India include Giant, Big Bazar and Star India Bazar.

3. Specialty stores

A store specializing in a particular type of merchandise or single product of durable goods ( that is, home furniture and house hold goods, consumer electronic and/or domestic electrical appliances) or a range of normally complementary durable goods product categories is termed as a specialty store. Such a business model is characterized by high level of services or product information being made available to customer. These are characterized by a narrow product line with deep assortments in that product line. Specialty stores usually concentrate on apparel, jewellery, fabrics, sporting goods, furniture, etc. They have a very clearly defined target market and their success lies in serving their needs.

Internationally, most specialty retailer would operate in an area under 8,000 sq. ft. examples of internationally retail chains which are specialty retailers included the Gap, lkea, High and Mighty, Big and Tall, etc. In India, specialty stores is one of the fastest emerging format. Examples of specialty stores in India include retail chain like proline fitness station and Gautier furniture.

4. Department stores

Aristide Boucicaut, the son of a successful hat maker, founded the first department store Bon Marche’ in saint-Germain, Paris in the year 1838. The store lured shoppers by selling different types of goods all under one roof. In the United State, A.T. Stewart established the Marble Dry Goods Palace, where he offered retail merchandise at fixed prices, on a variety of dry goods and advertised a policy of providing “free entrance” to all potential customers. Similar developments were underway in London and in other parts of the world. By 1980, a new world of retailing had been created as department stores had a clear market position as universal providers.

Generally stores eventually became department stores as small towns become cities. The most popular prominent department store emerged from small shop. The department store is also largely responsible for the standard store design. The store layout made shopping easier for consumers, irrespective of their social or economic background. The department store also offered new customer service never seen before, such as restaurants, restrooms, reading rooms, home delivery, wrapping services, store hours, new types of merchandise displays and so forth. This format of retailing is popular in many parts of the world. In broad terms, a department store is large-scale retail outlet, often multi-levelled, whose merchandise offer spans a number of different product categories. Traditionally department store can be defined as averaging 7000 sqm. Selling at least fashion clothing accessories, cosmetics, household goods and often a much broader assortment, from more or less separate department on several floors. Department stores are defined as those establishment depending on food, clothing and home related item for at least 10% percent but less than 70% respectively, of their sale.

Furthermore these stores have at least 50 employees and a self-service ratio of less than 50%. The size of average Indian Department Store varies from 20,000 to 40,000 esq. Some of National Players are Shopper’s Stop, Globus, Westside and Lifestyle, while others like Akbarrally’s, The Bombay Store and Benzer in Mumbai, Ebony in Delhi and Chermas and Meena Bazar in Hyderabad. Well known International Players are Marks and Spencer, Sears, J.C. Penny, Marrods, Selfridges etc.