The name says it all: the big box, a warehouse-like structure lined with tall shelves and sitting on enough land – up to 10,000 square meters – to rival a rural farm, had been anointed after its intended size and shape. These retail mammoths, built to contain virtually every household product under the sun, carry such a wide selection of merchandise that they have been nickname ‘category killers’.
The country’s top big box chains all broadcast the same claim: that they carryall known consumer supplies – food, clothes, household utensils, electronics, and even hardware equipment in their cavernous belly. No need to go in and out of different shops across town; just push the cart over to the next aisle.
‘Big box retailers have reshaped the business landscape in terms of the size of trading area and retailer strategies,’ Carlos V. Cabochan, president of the Philippine Association of Supermarkets, Inc., said in an e-mail interview. To differentiate themselves from other categories in the sector, these hypermarkets and depots rely on superlatives: lowest price, widest assortment, and largest store size – the same awe-inspiring factors that enable them to draw huge crowds.
Mr. Cabochan, also general manager of CVC Supermaket, Inc., offered two views on the edge of the retail monument over the small shopping cube. Owners and operators like the big box concept because it helps them gain bargaining leverage with rade suppliers, allowing them to acquire their mechandise at lower costs and at the same time get first dibs on the producs available at the supplier’s warehouse. From a consumer’s perspective, big boxes appeal to the shopper’s wallet because of their expansive product range and constant promotions.
The Urban Land Institute in the US – home to the most number of big boxes – divides megastores into three overlapping classes: discount department stores, category killers and warehouse clubs.
Discount department stores are the ones that have knocked down the walls that separate grocery, department store, and the mall boutique. A stroll in an SM Hypermarket or a Shopwise outlet, for instance, reveals supermarket goods, clothing, toys, appliances, supplies, and hardware sharing the massive floor space – and all dangling lower price tags. The sheer volume of goods that fly off the megastore’s shelves is enough to outweigh the profits lost from selling items cheaper than small specialty shops.
Owners and operators like the big box concept because it helps them gain bargaining leverage with trade suppliers, allowing them to acquire their merchandise at lower costs and at the same time get first dibs on the producs available at the supplier’s warehouse.
Take one section from a department store and multiply its size, and out comes the category killer. Barnes & Noble for books, Best Buy for electronics, and IKEA for furniture are some of the big-named supershops in the Western hemisphere. In the country, specialty chains like Ortigas Home Depot, MC Home Depot, and Wilcon have become go-to places for hardware, home supplies, furnishings, and fixtures. And with the size of the Fully Booked in BonifacioHigh Street and the National Book Store in Cubao, a category-killing book store probably isn’t far behind.
Finally, warehouse clubs tike Makro and SnR similar to discount clubs, except that they make their items available in bulk – often require membership fees before consumers can gain access to the store’s wholesale offers. Members-only deals require shoppers to present the store’s card at the checkout counter, but promise more savings in return.