Hypermarkets in Spain

PROSPECTS

Facing competition from other more convenient channels, hypermarkets reviews product offer and selling space

Although hypermarkets experienced a stable performance in 2019, the channel recorded fluctuating sales over the review period, as it faced increasing competition from convenience stores and e-commerce. Local consumers therefore, increasingly searched for ways to reduce their time spent shopping rather than visiting large hypermarkets located in city suburbs or in dedicated shopping areas outside of the cities which accommodates their generally larger selling space.

Players attempt to offer greater proximity and rapid service to attract time-poor consumers

Some local consumers have continued to gradually move away from large shopping channels such as hypermarkets and towards convenience stores for several reasons: proximity and speed. These are factors which have encouraged some players within hypermarkets to study and develop their offer in their attempts to improve the consumer shopping experience.

Hypermarkets explore different format options as way to differentiate from competition

Hypermarkets are also looking at different options of how best to differentiate themselves from the competition not only within the channel but outside of it as well, by exploring different formats. Sharing space with specialist suppliers or allowing shop-in-shop concessions is one strategy to expand a brand’s services, as offered by Carrefour, which has opened a sushi stand within its hypermarkets.

COMPETITIVE LANDSCAPE

Carrefour strengthens lead of hypermarkets with further outlet expansion

Carrefour strengthened its lead of hypermarkets in 2019, recording positive value sales and further expanding its outlet network. The player continued to invest in transforming its stores towards the end of the review period, including expanding its offer of fresh produce including fish, meat and baked goods, and its organic ranges, while also investing in its warehouse capacity.

Adoption of smaller format with the aim of competing with convenience stores

Bon Preu SA and Dinosol Supermercados (Hiperdino) ventured into a new kind of hypermarket by opening outlets with a smaller than average selling space, with this format becoming increasingly popular towards the end of the review period, allowing for greater flexibility in terms of location and bringing them closer to consumers. Both players have opted to offer a more expansive selection of grocery products, while limiting their non-grocery ranges including sports products and domestic electronics and appliances due to the smaller footprint of their stores.

Future restructuring plans for Hipercor unclear

In 2017, El Corte Inglés made the initial step to reform the concept of its Hipercor banner, by integrating the non-grocery section into its department stores following declining sales and to avoid the duplication of products across both channels. This has led to the ongoing gradual closure of its hypermarkets while it also started to reduce the selling space of its non-grocery sections, particularly its bazaar and textiles.

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