1991: the year of the supercenter? - hypermarkets - editorial

Discount Store News, July 8, 1991 by Tony Lisanti

It's been three and one half years since Wal-Mart opened its first Hypermart USA in Garland, Texas, marking the beginning of a surge in the development of the European-style hypermarket concept in the United States, DSN dubbed 1988 the "Year of the Hypermarket," and devoted its year-end issue to the topic--"Hypermarkets: Super Stores or Super Hype?"

This hypermarket phenomenon, which generated more hoopla than any event in retailing during the 1980s--except maybe for Sam Walton's hula dance on Wall Street in 1983--led some analysts to believe that this concept would revolutionize discount retailing in the 1990s. Others believed it would be a big bust. In the December 1988 issue, DSN reported that ". . . despite their initial splash, hypermarkets are a risky proposition."

While hypermarkets didn't revolutionize retailing, they weren't a complete bust either. The development of the hypermarket concept, which came to a screeching halt in 1989, is beginning to show signs of growth potential again, but with a few changes. The basic philosophy--to combine food and general merchandise under one roof--remains the same. However, other factors of the first hypermarket concepts have changed. For example, the word "hypermarket" is no longer considered a viable description; "Supercenter" is the preferred term. Also, the size of the hypermarket has shrunk considerably. For the most part, the mammoth 300,000-square-foot stores are being eliminated in favor of stores in the 150,000-square-foot to 200,000-square-foot range.

Consider the following developments:

* Leedmark opened its first superstore in May in Glen Burnie, Md. The company refused to call it a hypermarket, choosing instead, to call it a "hybrid" market. However, the store is 300,000 square feet, contrary to the widespread belief that consumers will not shop such a big store.

* Carrefour announced plans for a second superstore in the Cherry Hill, N.J. area. It will be about half the size of its 330,000-square-foot Philadelphia site. Meanwhile, the store continues to struggle and experiment with different merchandising techniques.

* Meijer is planning to re-enter the Cincinnati market with as many as six supercenters.

* Wal-Mart has apparently fine-tuned the supercenter concept and debuted what is the latest prototype in Batesville, Ark., just a few weeks ago. The discounter has reportedly committed to a major rollout of the concept over the next few years. One analyst said that Wal-Mart will open 10 to 12 supercenters in 1992.

* Kmart will debut its supercenter prototype later this month in Medina, Ohio. While no commitment to a major rollout has been revealed, Kmart will carefully study the results of the new supercenter and undoubtedly expand quickly if successful.

While there has been a lull as well as a refinement in the development of these superstores, the fundamental basis for success, as DSN identified in 1988, hasn't changed. Provide a wide selection of food and general merchandise at everyday low prices in a convenient, easy to shop store located in a smaller, more rural area and dominate the market!

All indications are that the supercenter concept is alive and well and growing. It's possible 1991 may well be remembered as the "year of the supercenter."