The superpowers of grocery may have called an end to the hypermarket-driven space race, but a new front is opening up as these retail giants seek to best leverage the assets they already have.

The superpowers of grocery may have called an end to the hypermarket-driven space race, but a new front is opening up as these retail giants seek to best leverage the assets they already have to capture consumer spend and reposition their largest stores for the digital age.

The momentum behind changing buying habits, which have caused general merchandise sales to move online and driven the growth of the c-store format, has forced retail chiefs to significantly rethink the purpose of big space.

Speaking in March at Retail Week Live, Asda chief executive Andy Clarke spoke on the need to reinvent the hypermarket and said the grocer was on the hunt for concession partners, to add to its deal with Disney, to take space in its largest stores. Meanwhile, Sainsbury’s King’s Lynn store opening in December upped the ante for how grocers approach the store environment.

But perhaps the most complete vision yet of what the future holds for big-box retail was on show in Watford, with the reopening of the Tesco Extra store.

Here the goal has been to utilise space as an asset, not a hindrance, to combat the migration of sales online by delivering something etailers simply cannot - a retail experience that is all about the destination.

Not only is Watford the first Tesco to house a Giraffe restaurant, but space has also been given over to a Harris + Hoole coffee shop, an F&F shop-in-shop, a beauty and cosmetics area more akin to that of a small department store, Tesco’s impressive upmarket baker Euphorium and an extensive wines and spirits section brought to life by display screens that will help shoppers pick ingredients for the perfect cocktail.

It was only two days in when I visited, but if the packed car park was evidence, the result is a compelling mix of retailing and leisure, backed up by a warmth and attention to detail that Tesco boss Philip Clarke has been seeking since he embarked on the UK turnaround.

The challenge now is whether Tesco, once the hype dies down, can convince customers that grocery shopping - still the core function of the store of course - should be part of their planned leisure time, and then whether this format can be replicated in stores elsewhere.

If both can be achieved and the buzz in Watford mirrored elsewhere, then big could still be beautiful for UK grocery retailing.

Topics