The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.
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Learn moreFeb 2014
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Hypermarkets and mass merchandisers face increasing challenges from internet retailers and smaller store formats with a competitive offer and greater expansion prospects, such as convenience stores, discounters and variety stores. This report analyses the performance of big-box retailers against competing channels and shows where they retain expansion prospects, mostly in emerging markets. It also covers innovations taken by key operators to offset these challenges and remain relevant formats.
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Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.
Shifts in consumer behaviour resulting from unfavourable demographic trends and the rise of internet retailing have led to more challenging conditions for hypermarkets and mass merchandiser operators. As these challenges are expected to become even more pronounced, efficiency gains will take precedence over expansion to maintain profits, especially in developed markets, encouraging a focus on innovation and new concepts.
Although emerging markets still offer vast expansion opportunities for international hypermarket operators, they will need to be more targeted, as several markets, notably BRICs, are moving towards maturity, with highly challenging conditions in first-tier cities and local players making inroads against global retailers, thus intensifying competition.
Although expansion opportunities in developed markets are limited, potential for opening new stores with smaller sizes of up to 7,000 sq m remains, through flexible concepts allowing hypermarkets to be more closely adapted to each catchment area and to target some locations close to residential areas enabling store visits within busy lifestyles. Reduced store sizes with smaller non-food areas may also boost sales per sq m.
Hypermarket players aim to retain the format’s relevance, especially against internet retailers, by specialising in fresh food and a few core non-food food categories, often using smaller stores. Beyond retailing, they will seek to offer more services targeting single and small households, notably including young adults and elderly shoppers.
Multi-channel strategies will increasingly focus on synergies between store-based and online activities and offset the decline in non-food sales, notably by boosting click-and-collect delivery options, including drive-through locations. Retailers will seek other uses for selling space no longer used for non-food, notably to fulfil online orders, and bolster supply chain efficiencies to gain a price advantage against pure play internet retailers.
Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.