Hypercity: Smaller stores in big cities

Friday, 18 February 2011

Smaller stores with approximately 20,000 to 25,000 sq. ft. floor space are being planned for launch in larger cities by the large format chain store brand Hypercity. The idea is to launch them in cities where Hypercity has at least four large stores and brand equity amongst consumers in those cities.

On this miniature strategy, Mark Ashman, CEO, HyperCity says these would be in cities where they have at least four large stores so customers are aware of their brand. The idea is to cater to a catchment that cannot access the hypermarkets. They are still in the initial stages of putting the plans together for express stores and have not set a target for the launch or decided on the first city to have such a store. Hypercity stores are usually about 100,000 sq. ft. in floor space and Ashman indicated that Hypercity may embrace the smaller format for its new locations and therefore, scaling down its large outlet sizes.

According to Ashman, there are several reasons for the downscale of store floor size. First of all, studies have revealed that Hypercity’s best customer shops once every 13 days and the second best every 24 days. While the shopping basket of the customer in India is growing, it is much smaller than what one sees in developed countries. Therefore, the model in India is of smaller stores.

Another factor that brought about the downscale of floor area is that land in urban areas in India is quite expensive and the infrastructural support of good roads is inadequate. In comparison, internationally, hypermarkets are located on cheaper land and cities offer good roads for customers to drive to the stores.