SUPERCENTER STOMP

Elliot Zwiebach

Alternative formats to the traditional supermarket have continued to proliferate in the last 15 years.

Convenience stores, drug stores and even gas stations -- which once only dabbled in groceries -- have made a stronger commitment to take share-of-stomach away from the supermarket industry.

But no single format has been as devastating to the industry as Wal-Mart's chain of supercenters, which went from a single store in 1987 to the food industry's sales leader with more than 1,000 stores and close to $65 billion in volume at the end of 2001 -- and still growing.

The supercenter format evolved from a series of 200,000-square-foot-plus hypermarkets, or hypermarches, that were opened in the United States by three French companies in the mid-1980s: bigg's in Cincinnati, operated by Euromarche (in partnership with Supervalu); Carrefour in Philadelphia in 1987; and Auchan in Chicago and Houston in 1988.

But none had the success Wal-Mart achieved in the years following the 1987 opening of Hypermart USA in Garland, Texas -- a 220,000-square-foot joint venture with Cullum Cos., Dallas.

After a second joint venture opened, Cullum dropped out of the partnership and Wal-Mart expanded on its own -- gradually at first and then more rapidly, converting up to 100 or more discount stores a year to the supercenter format over the ensuing decade.

Sam Walton, ever the visionary, saw the potential for the supercenter concept at the opening of the company's first Wal-Mart Supercenter in Washington, Mo., in February 1988. "I have a different feeling about this store than I've ever had," he said. "It's a Wal-Mart but it's not a Wal-Mart -- but it may be our future."

By 2000 -- only 12 years after moving into the format -- Wal-Mart became the dominant food retailer in the nation with grocery sales estimated at $57.2 billion, and in late 2001 the company said supercenter sales had surpassed those of discount stores for the first time ever, with food volume growing at more than double the rate of overall sales.

While Wal-Mart supercenters were proliferating, two other discounters were moving into the field: Kmart Corp. and Target Stores.

Kmart moved into the supercenter arena in 1988 when it opened American Fare in Atlanta in a joint venture with Bruno's, Birmingham, Ala., followed by Super Kmart Centers in Kankakee, Ill., and Clinton, Iowa. "We think there's great potential in many markets for this format," Joseph E. Antonini, chairman and chief executive officer, said in SN in 1992. "Our goal is to build a perception in the customers' mind that a supercenter is an interesting, fun and honest place to invest both their money and their valuable time."

To help it master the grocery business, Kmart moved all its food volume to Fleming Cos. in 2001, at the same time it expressed its intention to convert up to 1,000 existing discount stores to the supercenter format over the succeeding 10 years. However, Kmart filed for Chapter 11 bankruptcy protection earlier this year, throwing the future of the entire company into question.

Target Stores got into the supercenter business in 1995.