Wednesday, April 14, 2010

Small store format is a big thing

Several retailers are making progress in format development by developing smaller formats. Even if hypermarkets will continue to grow on several markets it is clear that many retailers is thinking small and neighbourhood stores in order to boost growth in the years to come. Tesco is building Fresh & Easy Neighborhood Market, Walmart Neighbourhood Market and Safeway´s along withseveral other both food and non-food retailers are searching for ways to make their stores smaller. The reasons are obvious:

- Smaller stores means quicker, easier shopping experiences

-A lower investment minimizes risks and implies low break-even points

- Localization is easier with more alternatives for smaller formats, escpecially in urban areas.

- Coming closer to the customers mean less fuel spending

- A smaller format means more stores per area unit making it possible to optimize coverage.

- A smaller store usually has higher sales per square meter, making it more cost effective.o