Supermarket Expansion - What is Really Happening?

 

It seems like in every town now there are new building projects happening that are set to be new supermarkets. All the major supermarkets are investing in new stores across the UK with an increase of 20% by 2014 expected just a year ago. With a new store opening or an expansion on an existing site happening every day, and on a scale we've never seen before, when will the rise in bigger and better and more supermarkets stop... how much is enough?

 

What does this mean for the consumer? Better access to their favourite choice of supermarkets, or less choice as the big names take more of the market share and impact on local independent retailers? 97% of all grocery spend is now with supermarkets.

 

The beginning of the recession had a positive impact for supermarkets, as other retailers go bust more money is spent with the supermarkets. Empty shops and pubs in key locations helped them acquire High Street sites for development of smaller express style stores. However 80% of the expansions are set to be out of town, larger developments. Supermarkets are no longer just grocery stores - the move towards large scale retail sites allows them to also increase on the range of clothing, electrical, home and entertainment items. Morrisons is catching up the other big three this year and next moving from a grocery based business to a lifestyle supermarket retailer with plans to extend its non grocery offering and introduce a new line of clothing in-store.

 

 

Although Morrisons has recently eased back on its expansion drive, Tesco too - having previously been pursuing the goal of having a site in every postcode area, as well as Sainsbury's and M&S. The recession has impacted longer term on commodity prices and along with higher fuel costs, poor harvest crops this year, and with government spending cuts set to continue retailers are being more cautious about their spend on expansion.

 

 So the upshot is that whilst supermarkets are still going ahead with expansion plans they are not going full steam ahead as they initially planned, and the 20% extra that was previously expected to happen has slowed considerably this year. The expansion plans are always good for supply chain companies like Ruck Retail, offering plenty of opportunity to install in new developements across the UK.