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US retailers unleash new formats to rival Wal-Mart

by Fiona Briggs

Target: driving hypermarket format

North American retailers are competing with Wal-Mart by developing more diverse formats, according to a new report from Planet Retail.

While Wal-Mart continues to dominate the retail scene in its home market, with sales more than four times larger than its closest competitor, the report finds US and Canadian retailers launched a record number of new concepts last year in a bid to get a bigger slice of the pie.

“The competition hasn’t given up hope. Instead, they’ve become more creative,” said Bryan Roberts, Planet Retail’s global retail researchmanager.

The researcher’s study of the Top 30 Grocery Retailers in North America points to a trend to diversify outside of the traditional supermarket concept. More than half of the region’s Top 30 grocery retailers specialise in the operation of alternative formats such as discount stores, department stores, warehouse clubs, drugstores and convenience stores.

Target, for example, has managed to mix competitively priced general merchandise with groceries – a formula that is driving more openings of its hypermarket format, SuperTarget. Costco, meanwhile, is leading the warehouse/cash and carry channel by focusing on high quality food lines and an ever-changing mix of non-food lines.

Elsewhere, stores are competing by a renewed customer focus, says the study.

Kroger, Wal-Mart’s closest rival, has been successful with its Signature concept, for example, which is building stores based on customer feedback. It plans to invest further in loyalty card analysis in order to customise merchandising, pricing and promotional strategies at store level.

Safeway’s Lifestyle concept, featuring organic and natural food departments is another customer centric model while Publix has launched Publix Sabor to target Hispanic shopers, the fastest growing consumer group in the US.

Canadian retailer Loblaw is also pre-empting Wal-Mart’s move north of the border – it is planning to open three supercentres in Canada – with an expanded general merchandise offer in its Real Canadian Superstores.

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