Supercenter Dairy Dept. Dwarfs Average Supermarket by 60 Percent: Study

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Supercenter Dairy Dept. Dwarfs Average Supermarket by 60 Percent: Study

A newly released study of linear space allocations reveals key retail merchandising approaches being implemented by major retailers operating across the food, drug and mass (FDM) channels in the United States. The Annual Retail Space Allocation Study (ARSA), produced by Kantar Retail and Crossmark, reveals compelling and reliable insights on retail merchandising for trade partners, store designers and others in need of comparable and metrical information on the specifics of retail store space, current allocations of merchandise, and the direction of store design.

“This study is invaluable to companies that need to know where old opportunity has gone and where new opportunity lies within the U.S. retail landscape,” said John Rand, senior director of retail insights for Cambridge, Mass.-based Kantar Retail and lead author of the ARSA study. “Assessing the amount of space devoted to a department and facing the shopper and the resulting shopper impact is critical to anyone interested in aligning to retailer strategies.”

Conducted in June 2009, the study will be repeated annually to create a baseline and build a database illustrating store development trends for thousands of stores over time.

“The timing of this study is significant,” adds Ryan McCoy, Plano, Texas-based Crossmark’s retail division manager. “In the process of dealing with a recession and other factors, retailers in almost every class of trade have dramatically lowered capital expenditures for new stores and have concentrated on remodeling existing properties. Having a firm grasp of what the vector of change is, on a retailer-specific basis, is of critical importance to trade partners and store designers alike.”

Among the study’s most significant channel findings:

—The dairy department in a supercenter is on average 60 percent larger than in a supermarket
—Supercenters dedicate 68 percent less total space to alcohol than do warehouse clubs
—Mass merchandise stores and supercenters have comparable store space devoted to HBC and cosmetics
—As a percentage of the total store, drug stores offer the most promotional space

Key retailer highlights include:

—Walmart: Space allocation for traditional food and consumable products has been outstripped by the rate of sales development. A considerable change in allocation of space is expected as a result of Project Impact, and-even though the study data was collected before a significant number of Project Impact remodels had taken place, some of the changes are already clear
—Target: The retailer is particularly under-spaced in the categories showing the highest year-over-year growth, and store space allocation for grocery is generally undersized compared with its contribution to sales
—CVS: Promotional activity, sales trends and space allocation at CVS are remarkably consistent, in contrast to other retailers

The objective of the study is to provide a reliable in-depth sample of the linear space allocations for supermarkets, drug stores, warehouse clubs, mass merchandisers and supercenters.

The study reveals retail space approaches used and the merchandising emphasis by department (for more than 15 departments) in over 650 stores, covering all national and regional retailers operating in the FDM channels, including Walmart, Target, Costco, Safeway, Supervalu and CVS.

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