Perhaps one of the greater debates surrounding supercenters has to do with cross shopping: Do shoppers go to the supercenter with food purchases in mind, nonfood purchases in mind or will they buy both?
It's clear that the best situation for supercenter operators is the last option: that shoppers arrive at the store with both food and nonfood needs in mind. The next best situation is that the nonfood shopper makes an impulsive purchase from the food side, or the reverse. In any case, a mixed shopping basket of food and nonfood purchases is the goal. Most supercenter operators insist that cross shopping does occur and is one of the strongest aspects of the entire supercenter business proposition.
Executives of both Wal-Mart Stores and Kmart make frequent references to the success of cross shopping. Many examples could be drawn on, but here's a recent one: "One-stop, cross shopping of the food and general-merchandise sides of the store is what -- from a sales and profit perspective -- defines the tremendous opportunity of the supercenter format." That's the opinion of Laurence L. Anderson, Kmart's president of Super Kmart. Larry was a speaker at last month's SN Food Retailing Summit. The quote appeared in SN's Nov. 9 issue.
It's evident, though, that there is a limit to cross shopping. The European hypermarket operators learned during their brief sojourn in America a few years back that items seldom bought on impulse, such as major appliances and consumer electronics, fit poorly in a format that depends on food sales to instigate store traffic.
Now, as you'll see by reading this week's front-page news feature about Fred Meyer Stores, there's acknowledgement that cross shopping isn't as important is it's sometimes touted to be, at least for that supercenter operator. (The company actually prefers to be described as an operator of multidepartment stores.)
"Customers who come in for groceries may pick up an item or two from the nonfood side, but they usually make separate trips for food, apparel or the garden center. There's usually a primary purpose for each shopping trip, and you rarely see a basket full of mixed goods." That's the opinion of Darrell Webb, Fred Meyer's senior vice president of the food group, as quoted in this week's SN.
Noticing that, Fred Meyer is tinkering with its format and has rolled out four experimental stores, which feature the food department in the center of the store, not to one side, as is the usual practice. The design allows for a higher degree of differentiation between food and nonfood departments, Mary Sammons, Fred Meyer Stores' president and chief executive officer, told SN.
Such a strategy may seem anathema to many supercenter operators, but, frankly, I've long suspected that the importance of cross shopping has been overrated. In the end, a supercenter is an efficiency bid: Companies that operate both food and discount formats can realize vast operating-cost reductions by putting both in the same box.