Page 434 - Foundations of Marketing

Retailing, Direct Marketing, and Wholesaling | Chapter 14 401

Superstores
Superstores , which originated in Europe, are giant retail outlets that carry not only the food
and nonfood products ordinarily found in supermarkets, but routinely purchased consumer
products such as housewares, hardware, small appliances, clothing, and personal-care prod-
ucts. Superstores combine features of discount stores and supermarkets and generally carry
about four times as many items as supermarkets. Superstores also offer additional services,
superstores Giant retail
including dry cleaning, automotive repair, check cashing, and bill paying. Examples include
outlets that carry food and
Walmart Supercenters, some Kroger stores, SuperTarget stores, and Super Kmart Centers.
nonfood products found in
To cut handling and inventory costs, superstores use sophisticated operating techniques and
supermarkets, as well as most
often have tall shelving that displays entire assortments of products. Superstores can have an
routinely purchased consumer
area of as much as 200,000 square feet (compared with 20,000 square feet in traditional super- products
markets). Sales volume is typically two to three times that of supermarkets, partly because loca-
hypermarkets Stores that
tions near good transportation networks help generate the in-store traffi c needed for profi tability. combine supermarket and
discount store shopping in one
Hypermarkets location
warehouse clubs Large-scale,
Hypermarkets combine supermarket and discount store shopping in one location. Larger members-only establishments
than superstores, they range from 225,000 to 325,000 square feet and offer 45,000 to 60,000 that combine features of cash-
different types of low-priced products. They commonly allocate 40 to 50 percent of their space and-carry wholesaling with
to grocery products and the remainder to general merchandise, including apparel, appliances, discount retailing
housewares, jewelry, hardware, and automotive supplies.
Many also lease space to noncompeting businesses such as
banks, optical shops, and fast-food restaurants. All hyper-
markets focus on low prices and vast selections.
Retailers have struggled with introducing the hypermar-
ket concept in the United States. Although Kmart, Walmart,
and Carrefour all opened hypermarkets in the United States,
most of these stores ultimately closed. Such stores may be
too large for time-constrained U.S. shoppers. Hypermar-
kets have been more successful in Europe, South America,
Mexico, the Middle East, and India.

Warehouse Clubs

Warehouse clubs , a rapidly growing form of mass mer-
chandising, are large-scale, members-only operations that
combine cash-and-carry wholesaling with discount retailing.
Sometimes called buying clubs, warehouse clubs offer the
same types of products as discount stores, but in a limited
range of sizes and styles. Whereas most discount stores carry
around 40,000 items, a warehouse club handles only 3,500
to 5,000 products, usually brand leaders. Sam’s Club stores,
for example, stock about 4,000 items. Costco currently leads
the warehouse club industry with sales of nearly $ 99 billion.
Sam’s Club is second with almost $ 53.8 billion in store sales.
A third company, BJ’s Wholesale Club, which operates in
East Coast states and in Ohio, has a much smaller market
9
amounting to about $ 11 billion. All these establishments
offer a broad product mix, including food, beverages, books,
appliances, housewares, automotive parts, hardware, and © iStockphoto.com /slobo
furniture.
To keep prices lower than those of supermarkets and
discount stores, warehouse clubs offer few services. They
also keep advertising to a minimum. Their facilities, often Sam’s Club is a warehouse club that has a wide product mix and
located in industrial areas, have concrete fl oors and aisles limited depth.

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