Supermarket vs. Grocery Store: 6 Similarities and Differences
The grocery business is fiercely competitive. Many believe mass retailers like Walmart are taking over the market, but surveys show that less than a quarter of shoppers prefer this type of store for their grocery needs.
Most of the market is up for grabs, but how can you capitalize on it and maximize your chances of success? With a supermarket… or a grocery store?
Grocery shopping used to be simple — head to the nearest market and pick up whatever you needed. Today, people can go to the massive supermarket across town or pop into the little grocery store on the corner.
If you’re considering opening a grocery store, you might wonder how to stand out against the big box stores. What are the similarities and differences you can embrace?
This article digs into how supermarkets and grocery stores compare on factors like price, selection, brands, and convenience. What you learn here will help you decide how to fit out your store, what to sell, and how to build customer loyalty.
Supermarket vs. Grocery Store: Are They the Same?
When venturing into the world of food retail, you may at first glance think a supermarket and grocery store are different terms for the same store. And there are similarities, including narrow profit margins. However, the differences between these two types of stores can significantly impact your business. So, what are these differences?
First and foremost, supermarkets are typically larger, one-stop shop stores that carry a wide range of products beyond groceries, including clothing, household items, and electronics. On the other hand, a grocery store tends to be more focused on food and produce, often smaller in size, and might not carry the same extensive range of non-food items. Essentially, supermarkets are like a one-size-fits-all store, while grocery stores are more specialized.
Related Read: How To Open a Supermarket: Your 5-Step Guide
Supermarkets may seem like a smarter choice, with the wider variety of products and the chance to reach a broader audience, but there are several compelling reasons you may choose to open a grocery store instead.
Smaller grocery stores allow you to serve your community more intimately. Grocery stores often have a neighborhood feel, where you can build strong relationships with your customers and cater to their specific needs. You'll become a trusted source for fresh produce, quality meats, and pantry essentials.
And if you're passionate about food and fresh produce, a grocery store might be your better option. You can curate your inventory to reflect your personal taste or culture, offering unique and locally sourced items.
Before deciding whether to open a supermarket or a grocery store, consider several factors. Think about your target market, location, and the level of competition in your area. Assess the demand for a one-stop shop vs. a specialized food store in your community.
Additionally, consider your budget and available resources and support. Supermarkets often require more significant initial investments due to their larger size and broader inventory. In contrast, grocery stores can be a more manageable option for those with limited capital.
Ultimately, the decision between a supermarket and a grocery store hinges on your business vision and the unique needs of your community. Take the time to conduct thorough market research, seek expert advice, and create a grocery store business plan that aligns with your goals.
With this in mind, let’s take a closer look at the specific similarities and differences between these two types of stores, giving you all the context you need to make the right decision for you.
Size and Selection Matters
Supermarkets have the upper hand regarding size and selection. This type of store is known for sprawling floor plans, long aisles, and national or regional chains.
This scale allows supermarkets to carry an extensive range of products. Inventories consist of everything from perishables to shelf-stable items, household goods, and even clothes and pharmacy items.
On the flip side, grocery stores offer a more curated selection. This store typically carries around 10,000 to 15,000 different stock keeping units (SKUs), focusing on the most popular grocery items.
While there's less variety in each department, you can make a specialty grocery store shine by offering unique ethnic foods or health foods customers might not find in a larger supermarket.
One-Stop Shop vs. Quick Trip
Supermarkets are your quintessential one-stop shop. This type of store offers everything under one roof, enabling customers to check off their entire shopping list in a single visit.
Many supermarkets also provide additional amenities, such as in-store pharmacies, banks, and even coffee shops, making it convenient to get errands done alongside regular grocery shopping. This model also saves on retail space costs, as you can rent portions of your store to other vendors like coffee shops and bakeries, boosting your bottom line and providing additional convenience to customers.
Grocery stores cater to neighborhoods with a focus on quick, in-and-out shopping. While they may not tend to offer “one-stop” shopping, the smaller format of a grocery store conveniently fits into residential areas, offering easy access to essential grocery items close to home.
Some markets find success by extending operating hours to better serve the local community, staying open later or opening earlier to accommodate the needs of their neighbors.
Price War: Who Wins on Value?
Supermarkets engage in a price war by running frequent sales, promotions, and other marketing tactics. You'll often come across enticing deals like "three for $10" and other discounts in a supermarket environment. These promotions are designed to drive traffic and compete on price, making them an attractive option for budget-conscious shoppers. However, these low prices cut into profit margins and can make it challenging to run a successful store, especially at first.
Prices at grocery stores can vary, and you might notice that they tend to be a bit higher than those at larger supermarkets. This difference often reflects the convenience of their neighborhood location or the quality of their product selection.
Specialty grocery stores, such as health food stores, may charge even higher prices, but they often offer higher-quality products like premium meats and fresh produce. When you run an independent shop, you have more flexibility on pricing than chain stores and supermarkets, which allows you to highlight unique items or run enticing promotions.
Store Brand vs. Popular Products
Supermarkets typically stock a significant amount of their store brand products. National chains often feature their private label products, such as Kroger's Private Selection. These store brands offer cost-effective options for staples like milk, bread, and pasta.
Grocery stores, in contrast, tend to carry more name brands. They emphasize national name brands and may also feature some regional or local brands that you can't find elsewhere. Some specialty grocery stores go a step further by forging partnerships with local artisans, showcasing unique, local products.
Prepared Food: Dedicated Sections or Grab-and-Go?
Supermarkets are often known for extensive prepared food sections. Supermarket customers expect to find deli counters with pre-made sandwiches and salads, in-store bakeries offering fresh breads and sweets, and a wide range of ready-to-eat prepared meal options.
If you plan to open a supermarket, you may want to budget upfront to include the cost of offering prepared foods like these, as customers will expect to find them in your store.
Grocery stores tend to focus more on grab-and-go offerings. While they may have smaller deli counters with basic sandwiches and salads, small grocery stores are increasingly expanding their grab-and-go options, such as sushi, pizza, and ready-to-eat meals.
Some grocery stores also partner with local restaurants to provide customers with a broader array of prepared foods. This strategy can help you offer customers a selection of prepared food — without breaking the bank.
Do You Need Specialty Departments?
Supermarkets often feature expanded non-food offerings. These options can include large non-food sections with items like clothing, home goods, toys, and electronics. Supermarkets also frequently provide full-service pharmacies, floral departments, and wine/beer sections, giving customers the convenience of one-stop shopping.
On the flip side, grocery stores stick to their core offerings, emphasizing convenience shopping for grocery essentials.
Related Read: 8 Trends That Will Define the Grocery Industry
While you may carry basic household items in your grocery store, the non-food selections in these smaller stores are typically limited. A grocery store is more of a specialty retailer, tailoring inventory to specific niches rather than striving to be a one-stop shop.
Opening a Supermarket vs. Grocery Store: Who Do You Want To Serve?
Whether you're leaning towards opening a supermarket or a smaller grocery store, the choice ultimately comes down to who you want to serve and the experience you wish to offer. Smaller grocery stores are the heartbeat of local communities, offering a curated selection of essential items with a personal touch. Large supermarkets can offer lower prices and cater to a larger audience with more standard items.
With smaller grocery stores, you can provide a more personalized shopping experience, where busy supermarkets might lead to longer wait times and a more bustling atmosphere. The choice is yours, and it's a pivotal decision that will define your store's character.
Regardless of your choice when it comes to supermarket vs. grocery store, you’ll need one essential tool to ensure your store’s success: a modern point of sale (POS) system. It's the backbone of your operation, where seamless transactions, efficient inventory management, and satisfied customers come together.
IT Retail offers an all-in-one point of sale solution tailored specifically to grocery stores and markets' unique needs. With features designed to streamline your operations, enhance your customer service, and maximize your profits, our POS system can be a game-changer for your store.
Don't wait; take the first step towards success and schedule a free software demo of IT Retail today.