S.I.W.S. N.R.

SWAMY COLLEGE OF COMMERCE

AND ECONOMICS & SMT. THIRUMALAI COLLEGE
OF SCIENCE

Department of B.M.S. and B.B.I

A
Report
On

Consumer’s Behavior
Towards Retail Store and Supermarket

Second Year B.M.S

Name: Anil Bhatt
Roll No: 15007

October, 2014
 S.I.W.S. N.R. SWAMY COLLEGE OF COMMERCE
AND ECONOMICS & SMT. THIRUMALAI COLLEGE
OF SCIENCE

Department of B.M.S. and B.B.I

A
Report
On

Consumer’s Behavior
Towards Retail Store and Supermarket

Second Year B.M.S

Name: Anil Bhatt
Roll No: 15007
A report submitted in the partial fulfillment of the
Requirement of Marketing Management Syllabus
Report writing
October, 2014
 Preface

The report is an attempt at understanding the facts of

consumer’s behavior towards retail stores and supermarkets. People
usually visit this stores/market for their daily routine basis for shopping.

My research addresses the reviews and experience of

consumers visiting the stores and markets. An attempt has been made
to evaluate the need of consumers for retail stores/supermarkets.

Several sections in the report describes about its positive and

negative impacts, which influence the different group of the society.
The report contains detail information on retail stores and
supermarkets and the consumer’s review of shopping in it.
 Acknowledgement

I hereby express my heartiest thanks to all sources who have

contributed to the making of this project. I am obliged to all those who
have supported, provided their valuable guidance and helped me for the
accomplishment of this project.

I would like to thank my professor Mrs Dr. Veena Prasad for giving
me such a wonderful opportunity to make a project on the given topic
as well as her guidance and timely suggestion on this topic. This project
has benefited me with in depth and excellent knowledge of the same.

Lastly, I would like to express my gratitude to my friends and

respondents for their support and willingness to spend time with me to
fill the questionnaires.
 Summary

A supermarket, a large form of the traditional grocery store, is a

self-service shop offering a wide variety of food and household
products, organized into aisles. It is larger in size and has a wider
selection than a traditional grocery store, but is smaller and more
limited in the range of merchandise than a hypermarket or big-box
market.

Supermarkets typically are supplied by the distribution centres of

their parent companies, usually in the largest city in the area.
Supermarkets usually offer products at relatively low prices by using
their buying power to buy goods from manufacturers at lower prices
than smaller stores can. They also minimize financing costs by paying
for goods at least 30 days after receipt and some extract credit terms of
90 days or more from vendors. Certain products (typically staple foods
such as bread, milk and sugar) are very occasionally sold as loss leaders,
that is, with negative profit margins so as to attract shoppers to their
store. There is some debate as to the effectiveness of this tactic. To
maintain a profit, supermarkets make up for the lower margins by a
higher overall volume of sales, and with the sale of higher-margin items
bought by the intended higher volume of shoppers. Customers usually
shop by placing their selected merchandise into shopping carts
(trolleys) or baskets (self-service) and pay for the merchandise at the
check-out. At present, many supermarket chains are attempting to
further reduce labor costs by shifting to self-service check-out
machines, where a single employee can oversee a group of four or five
machines at once, assisting multiple customers at a time.

A larger full-service supermarket combined with a department

store is sometimes known as a hypermarket. Other services offered at
some supermarkets may include those of banks, cafés, childcare
centres/creches, photo processing, video rentals, pharmacies and/or
petrol stations.
 Content

Topics Page No

Preface I

Acknowledgement II

Summary III

Introduction 1

Types of Retail Outlets 2

Typical Supermarket Merchandise 5

Typical store architecture 7

Global top five retailers 10

Data interpretation and analysis of Store/Market 11

Recommendations and Suggestions 23

Conclusion 24

Appendix-I

Appendix-II

References
 Introduction

A supermarket, is a large form of the traditional grocery store, is a

self-service shop offering a wide variety of food and household
products, organized into aisles. While retail consists of the sale of goods
or merchandise from a fixed location, such as a department store,
boutique or kiosk, or by mail, in small or individual lots for direct
consumption by the purchaser. Retailing may include subordinated
services, such as delivery. Purchasers may be individuals or businesses.
In commerce, a "retailer" buys goods or products in large quantities
from manufacturers or importers, either directly or through a
wholesaler, and then sells smaller quantities to the end-user.
Supermarket is larger in size and has a wider selection than a traditional
grocery/retail store, but is smaller and more limited in the range of
merchandise than a hypermarket or big-box market. The traditional
supermarket occupies a large amount of floor space, usually on a single
level. It is usually situated near a residential area in order to be
convenient to consumers. The basic appeal is the availability of a broad
selection of goods under a single roof, at relatively low prices. In
retailing, shops may be on residential streets, streets with few or no
houses or in a shopping mall. Shopping streets may be for pedestrians
only. Sometimes a shopping street has a partial or full roof to protect
customers from precipitation. Online retailing, a type of electronic
commerce used for business-to-consumer (B2C) transactions and mail
order, are forms of non-shop retailing. Supermarkets typically are
supplied by the distribution centers of their parent companies, usually
in the largest city in the area. Supermarkets usually offer products at
relatively low prices by using their buying power to buy goods from
manufacturers at lower prices than smaller stores can. They also
minimize financing costs by paying for goods at least 30 days after
receipt and some extract credit terms of 90 days or more from vendors.
A larger full-service supermarket combined with a department store is
sometimes known as a hypermarket.
 Types of Retail Outlets
A marketplace is a location where goods and services are
exchanged. The traditional market square is a city square where traders
set up stalls and buyers browse the stores. This kind of market is very
old, and countless such markets are still in operation around the whole
world.
In some parts of the world, the retail business is still dominated by
small family-run stores, but this market is increasingly being taken over
by large retail chains. Most of these stores are called high street stores.
Gradually high street stores are being re-grouped at one location called
Malls. These are more defined and planned spaces for retail stores and
Brands.

Types by products

Retail is usually classified by type of products as follows:

 Food products — typically require cold storage facilities.

 Hard goods or durable goods ("hard-line retailers") —
automobiles, appliances, electronics, furniture, sporting goods,
lumber, etc., and parts for them. Goods that do not quickly wear
out and provide utility over time.
 Soft goods or consumables — clothing, other fabrics, footwear,
cosmetics, medicines and stationery. Goods that are consumed
after one use or have a limited period (typically under three
years) in which you may use them.
 Arts — Contemporary art galleries, Bookstores, Handicrafts,
Musical instruments, Gift shops, and supplies for them.

Types by marketing strategy

There are the following types of retailers by marketing strategy:

  Department store

Department stores are very large stores offering a huge

assortment of "soft" and "hard goods; often bear a resemblance to a
collection of specialty stores. A retailer of such store carries variety of
categories and has broad assortment at average price. They offer
considerable customer service.

 Discount store

Discount stores tend to offer a wide array of products and

services, but they compete mainly on price offers extensive assortment
of merchandise at affordable and cut-rate prices. Normally, retailers
sell less fashion-oriented brands.

 Warehouse store

Warehouses that offer low-cost, often high-quantity goods piled

on pallets or steel shelves; warehouse clubs charge a membership fee.

 Variety store

Variety stores offer extremely low-cost goods, with limited

selection.

 Demographic

Retailers that aim at one particular segment (e.g., high-end

retailers focusing on wealthy individuals).

 Mom-And-Pop

A small retail outlet owned and operated by an individual or

family. Focuses on a relatively limited and selective set of products.
  Specialty store

A specialty store has a narrow marketing focus - either

specializing on specific merchandise, such as toys, shoes, or clothing, or
on a target audience, such as children, tourists, or oversize women. Size
of store varies - some specialty store might be retail giants such as Toys
"R" Us, Foot Locker, and The Body Shop, while others might be small,
individual shops such as Nutters of Savile Row.

Such stores, regardless of size, tend to have a greater depth of the

specialist stock than general stores, and generally offer specialist
product knowledge valued by the consumer. Pricing is usually not the
priority when consumers are deciding upon a specialty store; factors
such as branding image, selection choice, and purchasing assistance are
seen as important. They differ from department stores and
supermarkets which carry a wide range of merchandise.

 Boutique

Boutique or concept stores are similar to specialty stores. Concept

stores are very small in size, and only ever stock one brand. They are
run by the brand that controls them. An example of brand that
distributes largely through their own widely distributed concept stores
is L'OCCITANE en Provence. The limited size and offering of
L'OCCITANE's stores are too small to be considered a specialty store
proper.
  General store

A general store is a rural store that supplies the main needs for
the local community.

 Other types

Other types of retail store include:

 Automated Retail stores — self-service, robotic kiosks located in

airports, malls and grocery stores. The stores accept credit cards
and are usually open 24/7. Examples include ZoomShops and
Redbox.
 Big-box stores — encompass larger department, discount,
general merchandise, and warehouse stores.

Retailers can opt for a format as each provides different retail mix
to its customers based on their customer demographics, lifestyle and
purchase behavior. A good format will lend a hand to display products
well and entice the target customers to spawn sales.
 Typical Supermarket Merchandise

Larger supermarkets in North America and in Europe typically sell

a great number of items among many brands, sizes and varieties,
including:

 Alcoholic beverages (as state/provincial and/or local laws allow)

 Baby foods and baby-care products such as disposable diapers
 Breads and bakery products (many stores may have a bakery on
site that offers specialty and dessert items)
 Books, newspapers, and magazines, including supermarket
tabloids
 Bulk dried foods such as legumes, flour, rice, etc. (typically
available for self-service)
 Canned goods and dried cereals
 CDs, Audio cassettes, DVDs, and videos (including video rentals)
 Cigarettes and other tobacco products (as
country/state/provincial and/or local laws allow)
 Confections and candies
 Cosmetics
 Dairy products and eggs
 Delicatessen foods (ready-to-eat)
 Diet foods
 Electrical products such as light bulbs, extension cords, etc.
 Feminine hygiene products
 Financial services and products such as mortgages, credit cards,
savings accounts, wire transfers, etc. (typically offered in-store by
a partnering bank or other financial institution)
 Flowers
 Frozen foods and crushed ice
 Fresh produce, fruits and vegetables
 Greeting cards
 House-cleaning products
  House wares, Dishware and cooking utensils, etc. (typically
limited)
 Laundry products such as detergents, fabric softeners, etc.
 Lottery tickets (where operational and legal)
 Luggage items (typically limited)
 Meats, fish and seafood (some stores may offer live fish and
seafood items from aquarium tanks)
 Medicines and first aid items (primarily over-the-counter drugs,
although many supermarkets also have an on-site pharmacy) (as
country/state/provincial and/or local laws allow)
 Nonalcoholic beverages such as soft drinks, juices, bottled water,
etc. (some stores may have a juice bar that prepares ready-to-
drink freshly squeezed juices, smoothies, etc.)
 Personal hygiene and grooming products
 Pet foods and products
 Seasonal items and decorations
 Snack foods
 Tea and Coffee (some stores may have a commercial-style
grinder, typically available for self-service, and/or a staffed coffee
bar that prepares ready-to-drink coffee and tea beverages)
 Toys and novelties

In some countries, the range of supermarket merchandise is more

strictly focused on food products, although the range of goods for sale
is expanding in many locations as typical store sizes continue to
increase globally.
Typical store architecture
While branding and store advertising will differ from company to
company, the layout of a supermarket remains virtually unchanged.
Although big companies spend time giving consumers a pleasant
shopping experience, the design of a supermarket is directly connected
to the in-store marketing that supermarkets must conduct in order to
get shoppers to spend more money while there.

Every aspect of the store is mapped out and attention is paid to

color, wording and even surface texture. The overall layout of a
supermarket is a visual merchandising project that plays a major role in
retailing. Stores can creatively use a layout to alter customers’
perceptions of the atmosphere. Alternatively, they can enhance the
store’s atmospherics through visual communications (signs and
graphics), lighting, colors, and even scents. For example, to give a sense
of the supermarket being healthy, fresh produce is deliberately located
at the front of the store. In terms of bakery items, su-permarkets
usually dedicate 30 to 40 feet of store space to the bread aisle.

Supermarkets are designed to "give each product section a sense

of individual difference and this is evident in the design of what are
called the anchor departments; fresh produce, dairy, delicatessen,
meat and the bakery". Each section has different floor coverings, style,
lighting and sometimes even individual services counters to allow
shoppers to feel as if there are a number of markets within this one
supermarket.
 Marketers use well researched techniques to try to control
purchasing behavior. The layout of a supermarket is considered by
some to consist of a few rules of thumb and three layout principles. The
high-draw products are placed in separate areas of the store to keep
drawing the consumer through the store. High impulse and high margin
products are placed in the most predominant areas to grab attention.
Power products are placed on both sides of the aisle to create
increased product awareness, and end caps are used to receive high
exposure of a certain product whether on special, promotion or in a
campaign, or a new line.

The first principle of layout is circulation. Circulation is created by

arranging product so the supermarket can control the traffic flow of the
consumer. Along this path there will be high-draw, high-impulse items
that will influence the consumer to purchase which he or she did not
intend. Service areas such as rest rooms are placed in a location which
draws the consumer past certain products to create extra buys.
Necessity items such as bread and milk are found at the rear of the
store to increase the start of circulation. Cashiers' desks are placed in a
position to promote circulation. The entrance will be on the right-hand
side because research has shown that consumers who travel in a
counter-clockwise direction spend more.

The second principle of layout is coordination. Coordination is the

organized arrangement of product that promotes sales. Products such
as fast-selling and slow-selling lines are placed in strategic positions in
aid of the overall sales plan. Managers sometimes place different items
in fast-selling places to increase turnover or to promote a new line.
 The third principle is consumer convenience. The layout of a
supermarket is designed to create a high degree of convenience to the
consumer to make the shopping experience pleasant. This is done
through the character of merchandising and product placement. There
are many different ideas and theories in relation to layout and how
product layout can influence the purchases made.

One theory suggests that certain products are placed together or

near one another that are of a similar or complementary nature to
increase the average customer spend. This strategy is used by retailers
to create cross-category sales similarity. In other words, the toothpaste
is next to or adjacent the tooth brushes and the tea and coffee are
down the same isle as the sweet biscuits. These products complement
one another and placing them near is one way marketers try to
increase purchases.

Consumer psychologists suggest that most buyers tend to enter

the store and shop to their right first. This suggests that supermarket
marketers should use this theory to their advantage by placing their
temporary displays of products on the right-hand side to entice you to
make an unplanned purchase. Furthermore, aisle ends are extremely
popular with product manufacturers, who pay top dollar to have their
products located there. These aisle ends are used to lure customers
into making a snap purchase and to also entice them to shop down the
aisle. The most obvious place supermarket layout has an impact on
consumers is at the checkout. Small displays of chocolates, magazines
and drinks are located at each checkout to tempt shoppers while they
wait to be served.
 Global top five retailers

Worldwide Top Five Retailers

Retail Sales
Company Country of Origin 2013/14 group revenue (US $mil)
Rank

1 Wal-mart US $464,162

2 Tesco UK $120,052

3 Costco US $105,156

4 Carrefour France $103,555

5 Kroger US $96,751
Data Interpretation and Analysis of Store/Market
This Survey was conducted by person to person. One set of
questions were prepared for survey to determine the need and want of
consumers towards Retail Store and Supermarket. The responses for
the questions of the survey are given below

Q1. Your Gender?

40%

60%

Male

Female

From the following above data, it has been clearly shown that
the number of male participating in this survey is 60%, whereas the
number of female is 40%.
Q2. What is your age?

8% 12%

30%

50%

Below 18yrs
Between 19yrs to 35yrs
Between 36yrs to 60yrs
Above 60yrs

From the above pie chart, it shows us the ages of people

participating in this survey which varies from below 18yrs to above
60yrs.
Q3. How often do you shop?

20%
30%

50%

Sometimes
Every week
Regularly

From the above chart, it comes to about the people

shopping at store/market whether for some time, every week,
or regularly.
Q4. What do you prefer for daily shopping?

12%
28%

36%

24%

Retail Stores
Supermarkets
Local Bazar
Other

Through the above data, it clearly verifies us about

consumer’s choices for shopping at retail store, or
supermarket, or local bazaar, or other.
Q5. Do you have any retail store or supermarket in your
area?

30%

70%

Yes
No

As from the above given data, it clearly verify us about

consumers having retail store or supermarket at their
surrounding area or not.
Q6. Is the related store/market conveniently located?

30%

70%

Yes
No

From the above given information, it clearly indicates us

about the consumers opinion whether the related store or
market is conveniently located or not.
 Q7. Why do you choose to shop in a supermarket?

The products/service are

20% reliable and with good
quality
Low Price
12%
54%
High variety of the
14% goods

Convenience

From the above given information, it explain us about the

reasons of consumers for shopping in supermarket for that
options are the product/service is reliable and with good
quality, low price, high variety of goods, and convenience.
Q8. What kind of supermarket outlet would you prefer to
shop at?

12%
22%

26%

40%

Hypermarket (a very large

superstore)
Medium to large size
supermarket
Relatively smaller stores

Small convenient shops

Through the above data, it explains us about the choices

of consumers for kind of supermarket outlet to shop.
Q9. Does the retail shop provide the product at low price and
with good shop?

44%

56%

Yes
No

From the above details, it has been shown that whether

the consumers get the product at low price and with good
shop by retail shop or not.
Q10. Is the related retail store/supermarket is satisfying your
needs?

16%

84%
Yes

No

By seeing the above data, it comes to know that the

need of consumers is satisfied by related retail store or
supermarket or not.
Q11. If Wal-Mart opens in India, what price/quality range do
you think will be most appropriate for the Indian
Market?

6% 4% 10%
12%

40% 20%

8%

Premium price/high quality

Relatively high price/high quality
Medium price/high quality
Medium price/good quality
Low price/good quality
Low price/reasonable quality
Low price/relatively low quality

From the above data, it clearly verifies us about the

opinion of consumers for the price and quality range of Wal-
Mart when it opens in India Market.
Q12. How much would you rate supermarket/retail store in
your located in your locality?

8% 10%
14% 1
24%
2

5
44%

From the above given information, it show us about the

view of consumers to rate the supermarket or retail store
which is located at their area.
Recommendation and Suggestion

This survey has made me to know about our country’s

development in Retail Trade. This survey says more about
consumers need and development towards retail store and
supermarket which is growing rapidly in India at today’s time.
From the following survey it also tell us more detail about
our country’s huge growth in marketing sector which will lead
us to develop our nation. It also explains us about how to
improve more in trading and marketing sector.

A further step has to be taken to grow in these sectors

such as, providing more retail store and supermarket at every
surrounding area so that the consumers do not have to travel a
long distance for shopping.
Conclusion
 Supermarket, in general, tends to narrow the choices of fruits and
vegetables by stocking only varieties with long storage lives.

 Supermarkets often generate a lot of food waste. With present

technologies (biomethanation units), a huge amount of food
waste can be avoided, and may even increase revenue for the
store owners, as processed food waste can be reused again and
reduce electricity bills for the supermarket.

 Supermarkets can generally retail at lower prices than traditional

corner shops and markets due to higher volume throughput. This
has led to small businesses losing customers and closing in many
areas, which can be seen as an adverse effect on the local
infrastructure.

 In the United States, major-brand supermarkets often demand

slotting fees from suppliers in exchange for premium shelf space
and/or better positioning (such as at eye-level, on the checkout
aisle or at a shelf's "end cap"). This extra of the supplier cost (up
to $30,000 per brand for a chain for each individual SKU) may be
reflected in the cost of the products offered. Some critics have
questioned the ethical and legal propriety of slotting fee
payments and their effect on smaller suppliers.

 Britain’s supermarkets have been accused of squeezing prices to

farmers, forcing small shops out of business, and often favoring
imports over British produce.

 In New Zealand, supermarkets have been accused of buying fresh

produce from growers at low prices and selling with ridiculously
high mark-ups, sometimes as high as 500%.
 Appendix-I
Consumer’s Behavior towards Retail Stores
And Supermarket

Name:

Q1. Your gender?

Male
Female

Q2. What is your age?

Below 18yrs
Between 19yrs to 35yrs
Between 36yrs to 60yrs
Above 60yrs

Q3. How often do you shop?

Sometimes
Every week
Regular

Q4. What do you prefer for daily shopping?

Retail Stores
Supermarkets
Local Bazaar
Other

Q5. Do you have any retail store or supermarket in your area?

Yes No

Q6. Is the related store/market conveniently located?

Yes No
Q7. Why do you choose to shop in a supermarket?
The products/service are reliable and with good quality
Low Price
High variety of the goods
Convenience

Q8. What kind of supermarket outlet would you prefer to shop at?
Hypermarket (a very large superstore)
Medium to large size supermarket
Relatively smaller stores
Small convenient shops

Q9. Does the retail shop provide the product at low price and with
good shop?
Yes No

Q10. Is the related retail store/supermarket satisfying your needs?

Yes No

Q11. If Wal-Mart opens in India, what price/quality range do you think

will be most appropriate for the Indian Market?
Premium price/high quality
Relatively high price/high quality
Medium price/high quality
Medium price/good quality
Low price/good quality
Low price/reasonable quality
Low price/relatively low quality

Q12. How much would you rate supermarket/retail store in your

located in your locality?
1 2 3 4 5
 References

 http://en.wikipedia.org/wiki/Retail
 http://en.wikipedia.org/wiki/Supermarket
 http://www.wikipedia.co.in
 http://www.google.com
 The Canadian Encyclopaedia