Trade Formats — FMCG

The FMCG retail environment is continually evolving. At the broadest level, it may be split into the upper or modern trade, and the lower trade, which comprises a collection of traditional, independent stores such as mom and pop stores, provision stores and sundry kiosks.

Diversity is particularly pronounced in Asia, which has developed rapidly in the past 20 years. The continent is a melting pot of formats, from the traditional Sari Sari stores in the Philippines and Chinese medical halls in North and Southeast Asian markets, to hypermarkets, sophisticated vending machines, and virtual shopping platforms.

The following are descriptions of the key channels/sub-channels prevailing in the upper trade, across the globe:

• Supermarket: Is a self-service store offering a wide variety of food and household products. Store layout is organized into aisles with fixtures of shelves used to display merchandise. The average supermarket has roughly 15,000 to 25,000 SKUs in stock spread over 1,000 to 4,000 sq. metres.
• Hypermarket/supercentre:  Is a large retail facility combining a supermarket and a department store. In theory, hypermarkets allow customers to satisfy their routine shopping needs in one trip. They offer a wide range of products, including food and household products as well as general merchandise. On average a hypermarket covers a floor space of 10,000 to 20,000 sq. metres, and stocks roughly 50,000 to 100,000 SKUs.
• Minimarket/superette: Is a small supermarket. Usually these stores have one or two check-out counters.
• Hard discounter: Is characterized by very low prices, small assortment size (500 to 1,500 SKUs) comprising primarily private labels, in relatively small stores (300 to 1,000 sq. metres). Hard discounters like Aldi and Lidl have spread over Europe. Aldi entered the Australian market in 2001.  
• Soft discounter: Primarily sells limited range of food and household products at low prices. These stores stock roughly 1,500 to 3,000 SKUs, and their floor space varies from 300 to 3,000 sq. metres.
• Health and personal care store: Retails health and personal care products. Examples include Boots (UK), Watsons (Asia) and Walgreens (US).
• Convenience store: Is a shop with extended opening hours, stocking a limited range of food and household goods. It stocks about 500 to 1,500 SKUs and is usually less than 300 sq. metres in size. Examples include 7-Eleven, Circle K and Lawson.
• Warehouse store/warehouse club: is a retail facility, such as Costco and Sam’s Club in the U.S., which offers food, household products and some general merchandise in bulk, at discounted prices. It offers a no-frills experience. The warehouse shelving is heavily stocked with merchandise intended to move at a fast pace. On average it stocks about 4,000 SKUs. Unlike a warehouse club, a warehouse store does not require membership or membership fees.

In addition to these retail channels, there are also a number of on premise channels such as coffee shops, drink stalls, hawker centres, bars/night clubs and dining.