×

Once registered, you can:

  • - Read additional free articles each month
  • - Comment on articles and featured creative work
  • - Get our curated newsletters delivered to your inbox

By registering you agree to our privacy policy, terms & conditions and to receive occasional emails from Ad Age. You may unsubscribe at any time.

Are you a print subscriber? Activate your account.

SUPERCENTERS ENTICE SHOPPERS WAL-MART,TARGET AND KMART INVEST BIG IN FORMAT

By Published on .

On a Friday night in February, Jeff Hudspeth, 30, was doing some early Christmas shopping at the Wal-Mart Supercenter in Senatobia, Miss., 30 miles south of Memphis, Tenn.

"Have to get those Power Rangers and put them in layaway," said Mr. Hudspeth from one end of the store while his wife shopped at the other end. "We put our Christmas gifts in layaway. Not many stores around here do that."

While Christmas shopping, Mr. Hudspeth's family also picked up some household items such as shampoo, snacks and garden items.

Mr. Hudspeth is like many shoppers Advertising Age interviewed around the country who are impressed with the supercenter concept because of its convenience, prices and variety of merchandise. Supercenters draw shoppers amazing distances, as far as 100 miles.

Although supercenters aren't new, giant retailers like Wal-Mart Stores and Kmart Corp. are making major investments in the $40 billion industry that analysts expect to grow 25% annually for the next five years. By contrast, the $350 billion supermarket business is growing about 1% a year.

"Supercenters are going to roll over a lot of the supermarkets, literally turn them into roadkill," said Burt Flickinger III, analyst for A.T. Kearney, New York.

Wal-Mart had 143 supercenters by the close of fiscal 1995 on Jan. 31, and plans to build 100 more during fiscal '96. Industry observers predict that during 1997, Wal-Mart will have 500 Supercenters open.

Currently 68 Super Kmart centers are operating, with plans for more than 100 by yearend. Analysts predict there will be 400 to 500 Super Kmarts by 2000.

Target Stores, the largest business unit of Dayton Hudson Corp., unveiled its first SuperTarget in Omaha March 12 and will open another in Lawrence, Kan., by yearend.

Target introduced its Omaha supercenter to consumers through an advertising campaign, created by Chuck Ruhr Advertising, Minneapolis. The campaign includes two 30-second teasers and one 30-second grand opening spot plus radio and newspaper.

The broadcast spots feature the Amazing Kreskin, who predicts something "big" is coming to Omaha.

Supercenters are a smaller, more profitable version of the '80s hypermart that combine a full-size mass merchandise store and a full-size supermarket with a common checkout area.

Most supercenters are open 24 hours and typically range from 110,000 to 200,000 square feet with more than 20 checkout stands near the entrance. About one-third of the selling area is dedicated to food and some centers offer video stores, sit-down restaurants, banking and optical shops.

Frances Wright, 55, drove 100 miles for her second visit to the Wal-Mart Supercenter in Senatobia. "I came here for some glasses but they don't have optical items," Ms. Wright said. "So, I will pick up some craft items. Their prices are good here."

Drawing consumers into the stores with special services as well as food items is part of the retail strategy behind supercenters.

Analysts say the one-stop shopping format of supercenters is attractive to the changing family structure. According to the U.S. Census Bureau, there are 10.9 million single-parent family groups living in the U.S. Only 3.8 million single-parent families existed in 1970.

"In the 1990s, there are more families in which both parents work, and there are more single-parent families," said Don Spindle, analyst at A.G. Edwards & Sons, St. Louis. "Time and convenience are extremely important."

Convenience is very important to Barbara Lewis, 60, who visits the Meijer supercenter in Middletown, Ohio, twice a week. She likes the convenience of having food along with such items as clothes, motor oil and shoes under one roof.

Ms. Lewis regularly reads the store's circular and always shops for specials. She considers Meijer as the family's main grocery store, shopping there on Fridays and Sundays.

Steve Shindeldecker, 22, likes the convenience of 24-hour shopping at the Middletown Meijer. He lives only 5 minutes away and often uses it like a convenience store, buying beer or cigarettes at 3 a.m.

"I like that they have all kinds of stuff to buy," he said, adding it's the store he shops most, visiting at least once a week.

Regional retailers like Meijer and Fred Meyer Inc. helped pioneer the concept. Grand Rapids, Mich.-based Meijer has successfully operated its combination supermarket-discount retailer under one roof since 1962. Now, Meijer has 85 stores throughout Michigan, Ohio and Indiana.

Portland, Ore.-based Fred Meyer operates 83 stores, mainly on the West Coast.

Not everyone is sold on supercenters.

Retailing analyst Gary Giblen, at PaineWebber, New York, argues that most consumers will remain loyal to where they currently shop because of familiarity with the format.

Eunice Carpenter, 67, visits the Middletown Meijer pretty irregularly. She usually shops at Kroger Co., the area's leading chain, for staples, because she prefers Kroger's prices, selection and quality in most items. "Meijer is kinda high on some items," she said.

Ms. Carpenter said she also dislikes the supercenter concept. "I don't like the clothes and groceries together," she said. "It just doesn't look good to me."

However, most analysts and consumers seem to like supercenters.

"The supercenter concept is one of the major phenomena in retailing in the 1990s," Mr. Spindle said. "It's one of the fastest growing and significant concepts to come along." Contributing to this story: Alan Salomon, Jo McIntyre, Jack Neff, Jennifer Lawrence and Bob Geiger.

Most Popular
In this article: