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Supermarkets squeezed between hypermarket giants and minimarts. (Trade).

Retail business, which is getting brisk Brisk as a proper name may refer to:
  • Brest, Belarus (Brest-Litovsk) Brisk (בריסק) is the city's name in Yiddish
  • The Brisk yeshivas and methods, a school of Jewish thought originated by the Soloveitchik family of Brest.
 in the past two years has become a battle ground among major brands such as Hero, Carrefour, Indomaret, Makro, and other modern retail chains. A new form of retail business, first introduced in the country by Carrefour namely hypermarket hy·per·mar·ket  
A very large commercial establishment that is a combination of a department store and a supermarket.


a huge self-service store [translation of French
 have posed a threat to supermarkets, the first form of modern retail business in the country.

Amid the crisis that served a severe blow to the retail sector in May 1998 riots, the French giant, Carrefour, came with a new concept called hypermarket, which has succeeded in drawing customers at the expense of supermarket and department stores This is a list of department stores. In the case of department store groups the location of the flagship store is given. This list does not include large specialist stores, which sometimes resemble department stores. . Hypermarkets, which combine the concepts of supermarket shopping convenience and cheaper goods offered by whole sale companies like Mark and Goro have succeeded in strengthening their foothold foot·hold  
1. A place providing support for the foot in climbing or standing.

2. A firm or secure position that provides a base for further advancement.


 in the country especially in Jakarta.

Unlike Makro, whose targets are traders and wholesalers or distributors that serve large purchases in lower prices by retail traders, Carrefour deals directly with retail buyers. Being giant in size, Carrefour has to select the right location by taking into account the size of catchment area catchment area or drainage basin, area drained by a stream or other body of water. The limits of a given catchment area are the heights of land—often called drainage divides, or watersheds—separating it from neighboring drainage . The right location, therefore, is a business district or residential areas for middle to high class communities. It is no wonder that Carrefour selected Kelapa Gading Kelapa Gading is a subdistrict of North Jakarta, Indonesia.

The subdistrict is divided into 3 administrative villages (kelurahan): West Kelapa Gading, East Kelapa Gading, and Pegangsaan Dua. The postcodes for Kelapa Gading are 14240 and 14250.
 before expanding to other potential business districts including Cawang, Kuningan, and Pasar Baru--all are crowded business areas.

With the size of Carrefour's its outlets, no other hypermarket outlet would be feasible in areas where it has one. The presence of Carrefour outlets in an area not only discourages new comers but also causes problem for old supermarkets. For example, Hero outlet, which is located not far from one of Carrefour outlets in Cempaka Putih Cempaka Putih is a subdistrict of Central Jakarta, Indonesia.

The subdistrict is divided into 3 administrative villages (kelurahan): East Cempaka Putih, West Cempaka Putih, and Rawasari

It lies to the west of the Jend A Yani toll road.
, or Hero in Ambassador Mall, which is squeezed in area between two Carrefour outlets in Pasar Festival and ITC ITC (Brit) n abbr (= Independent Television Commission) → Fernseh-Aufsichtsgremium

ITC n abbr (BRIT) (= Independent Television Commission) →

Hero with the concept of supermarket has the market target the same as that of Carrefour. The location between two outlets of Carrefour would put Hero in a head on collision with two giants. Carrefour is more competitive as it could offer the same good in lower price

The concept of hypermarket is adopted from that of supermarket in service and choice of goods but hypermarket could offer a lower price. Being much larger in scale hypermarkets could secured goods in lower price from suppliers as it has greater bargaining power facing suppliers. Both hypermarkets and supermarkets select business centers and residential areas in cities for the location of their outlets.

In its country of origin, France, regional administrations generally do not allowed hypermarket to take a location in a city center. Generally hypermarket are located in the outskirts where land is much cheaper. Strangely, Jakarta, which previously had a regulation banning a supermarket to have a location close to traditional market, seems to choose not to be too strict in implementing its regulation. Carrefour seem to have no difficulty in securing a license to operate in the city center regardless of the condition of the positions.

The expansion of hypermarket in the city has given rise to the birth of a new form of retail business namely minimarket. Indomaret with its franchise systems has expanded rapidly, and not minimarket systems grew faster as supermarkets have lost part of their popularity squeezed by hypermarket.

Minimarket could resist the offensive hypermarket as being small could squeezed through the competition. Minimarket could take a location where supermarket let alone hypermarket could not. Minimarket could establish outlet closer to consumers in housing complex even in crowded residential areas. Though small in scale minimarket has large number of chain stores that it could enjoy a strong bargaining position as hypermarket or supermarket do facing suppliers.

The presence of hypermarkets and mini markets, supermarkets gradually lose their footing Facing a hypermarket a super market is less competitive in price and the variety of goods. Facing minimarket a super market is in disadvantage over proximity to consumers. With prices are competitive.

Before hypermarket and minimarket were introduced in the country, supermarkets mushroomed as they had no rival in offering convenience to customers especially among the middle to high income consumers. Hero began to open its outlet n the city center, and soon later it expanded to other parts of the city even to city outskirts. Hero became a threat to traditional markets as they could not match the supermarket n convenience and availability of goods.

Now, however, the condition has changed. The good days have been over for Hero. Hypermarkets have come up offering more than what a super market could offer. Hypermarket offers convenience as good supermarket could offer plus higher variety of goods and cheaper price. Minimarket came up with its ability to get closer to customer. Supermarkets are still safe in cities like Bogor, Sukabumi and other major cities where hypermarkets have made an appearance. Supermarkets are also safe n those city from the threat of minimarkets as Supermarkets could not yet matched by minimarket in the availability fresh products.

Not only Hero but other supermarkets in Jakarta have also suffered with the presence of hypermarket. Some of the supermarket have changed strategy by operating as discount stores giving more emphasis to lowering prices rather than to convenience. For example, Supermarket Tip-top gave more attention to improving competitiveness in prices than in convenience. It meets hypermarket in price competition but it offers less convenience that offered by Hero or Gelael.

Hero's strategies in facing Carrefour

Aware that it is losing ground in almost all front, the management of Hero has taken steps including cooperation with Malaysian hypermarket Giant. As Jakarta has been overcrowded o·ver·crowd  
v. o·ver·crowd·ed, o·ver·crowd·ing, o·ver·crowds
To cause to be excessively crowded: a system of consolidation that only overcrowded the classrooms.
 and has fallen under the domination of Carrefour, Hero's Giant chose to set foot first in Surabaya and Tangerang.. Hero also established its minimarket chains through Starmart networks.

Carrefour brings in the European shopping service system with broad shopping alleys allowing the shopping carts to maneuver maneuver /ma·neu·ver/ (mah-noo´ver) a skillful or dextrous method or procedure.

Bracht's maneuver  a method of extraction of the aftercoming head in breech presentation.
 freely. Durable and fresh goods are placed so that buyers will first buy durable goods durable goods

Goods, such as appliances and automobiles, that have a useful life over a number of periods. Firms that produce durable goods are often subject to wide fluctuations in sales and profits. Also called consumer durables.
 before fresh goods such as foods, fruits close to the cashiers. The concept introduced by Carrefour has been well accepted by buyers in Jakarta who are easily carried over by new culture. The concept brought in by Giant has yet to prove itself.

PT Alfa Retailindo Tbk., a publicly listed supermarket, has also followed the strategy adopted by Hero. The strategy adopted by PT Alfa Retailindo Tbk, is one by expanding business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets  from distribution to, whole sale, supermarket and minimarket systems. Alfa whole sale attracts buyers with large volume such as market targeted by Makro and Goro. Alfa has also succeeded in developed its own minimarket system.

In smaller cities in Java, supermarkets are still safe from the threat of hypermarket and minimarkets as the market size is not big enough to accommodate larger modern retailers as hypermarket. However, supermarkets are not very safe from the threat of minimarkets. The weakest competitor in the retail market is traditional retailers
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Comment:Supermarkets squeezed between hypermarket giants and minimarts. (Trade).
Publication:Indonesian Commercial Newsletter
Geographic Code:9INDO
Date:May 27, 2003
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