Sunday, February 10

Supermarket vs. Neighborhood Store

This is the cereal aisle at a supermarket near my house, and it is probably just like the cereal aisle in your supermarket too. On display is the vast range of product options available to the consumer, a full spectrum of colorful boxes and crazy mascots. The ability to provide this level of choice is a major reason that regional supermarkets were able to dominate the food retail business in the 20th century, edging out the older, smaller, and more localized stores. Larger and larger outlets needed to serve a consumer base drawn from a wider geographic area, which meant that virtually everyone had to drive to the grocery store. This fit pretty well with the drivable suburban land use arrangement in North America.

But let's take a second look at the product choices here. After all, each of these cereals are basically various combinations of corn syrup, wheat flour, preservatives, and maybe some other grain. The rest of the differentiation can be chalked up to value-added brand identification. Are hundreds of feet of shelf space really necessary to provide this level of substantive choice and spur on enough healthy competition between brands? I tend to think a store could do the trick with 10% or less of the shelf space.

Researchers in the last decade have been questioning (pdf) the retail orthodoxy that more choices are always desirable. There seem to be various problems associated with what is known as "hyperchoice": confusing information overload, time-stress, increased likelihood of consumer regret and error. Anecdotally, when working as a manager of a board game store, I found that customers were more likely to purchase something when I made two specific recommendations rather than presenting a whole range of options. Walmart has figured this out too, and they have been cutting the number of product options and focusing only the the products they know will sell. This article from the University of Texas business school gives some fascinating insight into this trend,

"Additional studies since then have confirmed that consumers often appreciate less choice, not more, even though both retailers and consumers tend to assume the opposite. “It’s a two-edged sword,” McAlister says. “People want the broader selection, but once they get it, they’re overwhelmed.

Could it be that the warehouse-sized grocery stores that we currently build and shop in are relics of an outdated business model? Or at least they may no longer be the only kid on the block. Maybe its time for a resurgence of the local, neighborhood store.

Consider Missoula's Rattlesnake Gardens neighborhood store. Sitting in the middle of your neighborhood, it's close enough to walk to. You greet your neighbors while shopping. There is an attached coffeehouse that serves as a gathering area. A community bulletin board announces events. Not even any tabloids in the check-out line. Is this what buying groceries will look like in the future?


J.W. said...

the majority of neighborhood stores that i have seen are boutiques that specialize in expensive organic foods and supplements--not really plausible options for day-to-day shopping. i'm hoping that the local market alternative becomes a live option again soon.

Daniel Nairn said...

That's been my experience too, although there are a couple of places around that do carry some of the staples. If there is a shift like this happening, it could take a while. said...

Quite worthwhile piece of writing, lots of thanks for the article.

augusto fagioli said...

As Italian citizen I can say we'r experiencing same issues here in all Europe. Local stores can hardly offer good stuff for cheap. Still, I think large stores, struggling for best discounts, on the long term may offend workers dignity, offering law salaries.
We run and we want to promote small locals stores [ie: Clothes Stores in Paris]

Do you need to promote your local shop? Feel free to submit your shop . Your're most welcome!