Intermediate Supermarkets in China

Abstract

Intermediate supermarket formats share characteristics of traditional food stores and of the modern supermarket. Because they represent steps on the evolutionary path towards the “complete” supermarket they offer an alternative to the dominant food retail modernization route involving the transplantation of the supermarket model. The paper reports the findings of a study of these intermediate formats in Shanghai. We discuss the origins, structure and operation of these stores and evaluate their contribution to the food retail modernization process. Surprisingly, few of the operators of these stores were traditional food retailers. Most were state-owned companies and private entrepreneurs from outside the retail sector. Lack of managerial and financial resources and inexperience led many to open these formats rather than the “complete” supermarket. The weakness of this subsector means that the main vehicle for food retail modernization in Shanghai will continue to be the supermarket chains. But because of limitations on the chain's expansion, they may enter into franchising arrangements with the best among these intermediate supermarkets. Finally, it is suggested that intermediate formats are likely to play a more important role in secondary cities, in towns and in rural areas in China.

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