Mark Price

Carrefour Looks to Reinvent the Hypermarket

August 30, 2010

FROM RETAILWIRE:
Carrefour is testing a new hypermarket concept as Western Europeans buy groceries closer to home or head to department and specialty stores for apparel and beauty products. Do large-format superstores in the U.S. face similar challenges to Carrefour's hypermarkets in Europe?      [more...]

In the U.S., our stores have tended to evolve from the discount mass marketer into groceries, rather than the other way. The stores tend not to be out of town; rather, they are close in and very convenient. Adding groceries to the store have several advantages to those retailers: driving additional frequency and increasing the average order value.

Since these retailers make the bulk of their margin on higher priced mass merchandise items, they can sell groceries at a very competitive rate, if not use them as loss-leaders.

The dynamic is very different; the closest analogy in the U.S. is probably a Costco or Sam's Club, which have found more success from close-in locations than far-out.