Over the last five years, the total number of food related stores developed by the global Top 30 international operators has increased by 23 per cent. By 2002 the number of outlets had risen to nearly 122,000 up from 98,723 in 1997.
Elsevier Food International, Vol. 5, Number 2, May 2002
Corinne Millar

Over the past years, large formats have been the main source of growth, comprising superstores, hyperrnarkets/warehouse clubs, cash & carries and department/variety stores. German retailer Metro AG, for instance, has opened nearly 300 large format stores in the last five years, with cash & carries accounting for two thirds of them. Nevertheless, smaller formats should not be discounted. Supermarkets, discount stores and convenience stores are used strategically as market entry vehicles or for filling niches in more mature markets. Another German example is hard discounter Aldi, which opened nearly 900 discount outlets between 1997-2002.
This push towards larger formats has been most evident for ITM, Auchan, Ahold and Rewe. ITM's increased exposure to large format stores is as a result of its acquisition of the Eurospar superstore network in Germany. Auchan has particularly expanded its hyperrnarket portfolio, using it as an entry vehicle in developing markets such as Poland, Taiwan, Morocco and Mexico. Superstores and hypermarkets are being used more extensively by Ahold, in particular in Latin America and Central and Eastern Europe. Rewe has shifted the balance in its store portfolio with a significant increase in the number of superstores - 293 in 2002 compared with 94 in 1997. This has been underpinned by the acquisition of Italian retailer Stand a last year.
By 2002, the Top 30 retailers were active in 88 countries, nearly 70 per cent more than in 1997. International operators took their stores into unchartered territories and new, more open, markets in Latin America, Central and Eastern Europe, the Middle East and Africa. Dutch retailer Ahold is becoming increasingly active in Central and South America forming alliances with local companies such as Ahold-Paiz (CARHO) in Central America and Velox Retail Holding in Argentina, as well as through organic growth. 
Moving on to look at specific formats, in most cases we have followed the retailer's definition of store format, so that a Wal-Mart Supercenter in the US is a superstore, but a similar store format is referred to as a hypermarket in Europe.

Cash & Carries Between 1997 and 2002, the number of cash & carries expanded by 49 per cent to 1387 units. Central and Eastern Europe was the main recipient of the growth, with the number of stores more than doubling to 117 outlets.
Cash & carries are typically the first type of store developed by international retailers in immature, fragmented markets. They are ideal for servicing the plethora of independent operators, with the buying power to purchase directly from manufacturers. Gradually, the market will consolidate and local retailers will increasingly gain sufficient scale to buy from manufacturers directly.
Hungary has been targeted by international C&C operators, with Cora, Tengelmann and Metro all operating significant sized networks there. Russia, as yet relatively unexploited, is likely to be a major battleground in the medium to long term.
Looking ahead we are likely to see further development of cash & carries in Asia Pacific in countries such as India and China. Metro is planning to open eight to ten cash & carries per year in the near future in China. It is aiming to use the country as a springboard for expansion into other developing markets in Asia, such as Vietnam. Development is also scheduled for India in the current year.

Convenience Stores
The number of convenience'stores developed by international grocery retailers expanded by 22 per cent to 46,000 units between 1997 and 2002.
This sector is likely to see further significant growth in the short to medium term, as retailers seek to exploit niches in more mature markets, and to satisfy consumers' growing demand for snacking and fast foods.
The key markets for c-stores are Asia Pacific, Western Europe and North America. Asia Pacific is home to the world's largest c-store operators - FamilyMart, Ito-Yokado (which owns the 7-Eleven chain) and AEON. Combined, these retailers operate nearly 17,000 stores in Japan and are aggressively expanding (either via wholly-owned networks or via franchised businesses) into other developing Asian markets.
China in particular is a hot spot, with 7-Eleven looking to open 350 stores in southern China (Guangdong province) by 2004 (the local license is held by Dairy Farm). Seven-Eleven Inc of the US is currently in the process of establishing a joint venture in Beijing to develop stores in conjunction with the President Chain Store Company of Taiwan and 7-Eleven Japan.
Last year FamilyMart announced that it is accelerating its store opening programme across Asia. In conjunction with its largest shareholder (ltochu Corporation), it is to expand its franchise business into a further five countries - China (Guangzhou), Indonesia, Philippines, Singapore and Malaysia - over the next two to three years. By 2010 the company plans to have 3,000 stores trading in China, and 600 outlets in Indonesia.
North America is home to 7-Eleven Inc, which operates nearly 6,000 stores, half of which are located on petrol forecourts. With fewer store development opportunities, the company is looking to diversify its store locations and to increase the range and quality of services and products instore.
In Western Europe, retailers such as Ahold and Tesco are forming joint ventures with petrol retailers to develop forecourt stores. In the UK, Tesco has collaborated with Esso to open a chain of stores, while in the Netherlands, Ahold is developing AH To Go motorway service stores as well as forecourt sites, also in association with Esso.

Department Stores
Department stores are the most prolific in the more mature Western European market, where they number just over 1,000 outlets. Despite near-saturation and changing consumer shopping patterns, they have seen a growth in their numbers, rising by 47 per cent over the five-year period.
In Italy the number of stores has risen to 339 from just 14 in 1997, mainly driven by Auchan, which formed an alliance with La Rinascente in 1997, thereby bringing on board 339 Upim variety stores.
The Middle East has seen the fastest growth, mainly spurred by Marks & Spencer's international franchise business. In Turkey it operates 13 outlets in conjunction with its local franchisee Fiba Holding, along with a small network of outlets across Bahrain, Kuwait and Qatar.
Looking ahead, department stores are unlikely to become more important within food retailers' portfolios. Instead hypermarkets are likely to be the main format for selling a large range of non-foods at more competitive prices.

Discount Stores
Discount stores saw their store numbers expand by 25 per cent between 1997 and 2002, rising to just over 27,000 outlets.
The main growth regions for discount stores has been the developing markets of Latin America, Central & Eastern Europe and Asia Pacific. Discounters are well suited to immature markets where consumer expenditure is still relatively low and therefore price sensitive retailers are popular.
Retailers such as Tengelmann with its Plus format have targeted emerging markets in the Czech Republic and Hungary for example. Latin America has experienced the fastest growth by far, with its store numbers rising to nearly 600. Both the number of outlets and the number of countries in which retailers have developed stores has expanded.
Within Latin America, Argentina, Mexico and Brazil have seen the most intense activity over the last five years. Carrefour operates its Dia discount chain in Argentina (future development plans have been put on hold until the country's economic and political situation calms down), while Wal-Mart has expanded its Bodega Aurrera discount stores in Mexico and Casino is seeking to grow its ISO-store Barateiro discount chain in Brazil.
Asia Pacific, (particularly China) is likely to be the next big growth market for discount stores. Carrefour is rumoured to be looking to open its limited assortment Dia discount chain there, which would be the first of its kind to be opened by an international operator. Nevertheless, Wal-Mart is already active in the country with its IS-strong chain of large format discount stores and with plans to open further outlets this year.

Hypermarkets
Hypermarkets have seen particularly fast growth over the last five years, with numbers growing by 50 per cent to just over 4,000 outlets. The most important markets to watch are Asia Pacific and Central and Eastern Europe, which have an established but growing network of stores.
In Eastern Europe, the markets of the Czech Republic and Poland are fairly much saturated, with retailers such as Tesco looking further afield and building stores in Slovakia and Hungary.
Russia has yet to be exploited by international retailers, only Metro is currently active with two cash & carries. However, it is attracting more attention from international operators. As part of the new Gubernatorial ring-road project around Moscow, Auchan is planning to open
six hyperrnarkets, which will entail the construction of major shopping malls around the city. The Auchan outlets are due to open between 2002 and 2004.

Within Asia Pacific, China, South Korea, Malaysia, Taiwan and Thailand have seen the fastest rates of growth driven by retailers such as Carrefour, Dairy Farm, Auchan Casino and Tesco.
Although Africa and the Middle East has experienced high rates of growth the number of stores there is still relatively insignificant and is likely to remain so for some time.
Hypermarkets are ideal vehicles for emerging countries. By targeting the mass market with a broad, competitively priced product range, they enable retailers to amass scale and volume in a relatively short period of time. Furthermore, they can operate within an immature supply chain structure, acting as a retail outlet as well as a distribution centre.

Superstores
Superstores have seen the fastest rate of growth over the last five years, with the number of outlets increasing by 62 per cent to just under 5,000 units.
The main source of growth has been Latin America and North America. Within Latin America, Costa Rica, Guatemala and Mexico have seen the most growth. Ahold and Wal-Mart are the main players in these markets, with Ahold forming an alliance in Central America local companies such as La Fragua in Guatemala and CARHCO in Costa Rica.
In North America, Wal-Mart is the dominant superstore operator, trading from a network of 1,066 Supercenters that sell a mix of grocery and non-food items. During the current fiscal year, it plans to open between 180-185 new Supercenters. The other international retailer in this segment in the US is Tengelmann via its sprawling A&P operation. It trades under three formats A&P Super Foodmart, Super Fresh and Food Emporium. Combined they operate 160 outlets.
Superstores have the largest penetration of outlets in Western Europe, although market saturation has prompted retailers to develop alternative formats such as convenience stores and hypermarkets.

Supermarkets
Overall, supermarkets have experienced the lowest rate of growth by international retailers, growing by just 17 per cent to 37,000 outlets. The fastest growth rates have been seen in Central and Eastern Europe and Latin America. As these markets have become more saturated retailers have turned their attention to infilling, aiming to mop-up smaller catchment areas with supermarkets. Ahold's Bompreco stores in Brazil are a good example of this approach.
In Western Europe, the supermarket sector is fairly static, with retailers turning their attention to the development of infill stores such as convenience stores or larger formats such as superstores and hypermarkets.

Virtual Stores
Virtual stores are one of the most dynamic and exciting retail formats. They are most suited for
development in high order, mature retail markets where consumers are well served by bricks and mortar outlets and are looking for higher levels of convenience, and are prepared to pay a premium for the service.
International retailers operating in Western Europe and Asia Pacific have been most active in
developing virtual stores. In Western Europe, the market is being driven by grocers such as Tesco, Carrefour, Casino and Ahold, while in Asia Pacific, in Japan in particular, it is the c-store operators (Aeon, FamilyMart, Ito-Yokado) that are the most active. Interestingly, Tesco has just announced the launch of its e-commerce operation in South Korea, e-homeplus.
Retailers are still toying with the most suitable model for e-commerce operation, store picking or dedicated warehouses. At the moment the balance seems to be falling on the side of store-picking, which offers the advantage of existing local stores fulfilling customers' orders. This format will grow as retailers seek out new channels of distribution in mature markets.