Why are trolleys getting bigger at supermarkets?

When consumers are postponing their decision to purchase a car or upgrade their TVs, the ones that are catching their eyeballs are a whole lot of food and personal care products. The increasing size of trolleys or carts at retail stores will confirm this trend.

“Trolley sizes are becoming larger,” said Damodar Mall, director - food strategy, Future Group, which runs food and grocery formats Big Bazaar, Food Bazaar, KB’s Fair Price, Foodrite and Foodhall. “A full trolley symbolically tells a person that shopping is done.”

The way an average Indian family consumes, willingly buys more products per individual, experiments with newer categories, and buys more volumes for a larger period of consumption, is enough for retailers to blow up money on shopping carts.

Though a typical store does offer multi-capacity trolleys, Future Group has switched to larger-sized ones at most of its stores. In fact, the larger the store is, the bigger the trolley size gets. “The ticket size is increasing as consumers have started to move from buying discretionary and choice items to buying even the mundane dal, chawal, biscuits, fruits and vegetables. People have settled with modern trade now,” said Mall.

Ashutosh Chakradeo, head - buying, merchandising and supply chain at Hypercity Retail Ltd, added that the company has recently increased trolley sizes at its stores by 8-10% from the past year, given that consumers are buying more units per trolley now.

“Sometimes, consumers use two trolleys to shop at a time.”
In fact, Chakradeo said, from when Hypercity started business in 2006, the shopping cart in stores has become much larger in size as per consumer spend increased. Today, an average ticket size at Hypercity is upwards of Rs1, 000, where consumers are largely not restricted by a budget. “Our study says, about 40-50% of consumers end up spending at least 30-40% more than what they had planned to.”

Thomas Vargese, chief executive officer at Aditya Birla Retail, which runs More supermarket and More Megastore hypermarket chain, said his stores have been using large trolleys (size 130 litre) for the longest time, but the average basket size (items per basket) and the average ticket size are increasing year-on-year.
Most hypermarket chains are seeing a 15-20% growth, which even reaches 40% during festive seasons and special discount days.

What makes consumers behave like that? Retailers’ take is consumers have come to their own conclusions that modern retail helps them save and offers more value. “Inflation plays a role in this,” Chakradeo chipped in. “Customers buy larger packs to save costs and they buy more units at a time.”

For a brand like Big Bazaar, Mall said, inflation worries have worked like marketing, leading consumers to seek more discounts, value at supermarket stores.

In the last two years, Daisy Soans, a housewife in Mumbai, has started buying larger volumes of food and grocery at the D-Mart store located a kilometre away from her home. So have many of her friends in the locality. From atta, tea, ketchup to biscuits, noodles and shampoo, each product they buy is of the largest size available in the store - something they can’t find at the smaller stores. “Smaller packs exhaust faster and larger packs offer more value with occasional deals and freebies. I buy all the necessities in bulk whenever I visit the store. It is great convenience,” pointed out Soans.

FDI or no FDI in multi-brand retail, an increasing number of city middle-class families are already used to performing their grocery shopping rituals at modern retail stores like Big Bazaar, Star Bazaar, Hypercity, More and others.

Anaggh Desai, chief executive officer at contemporary lifestyle chain The Bombay Store, is a keen observer of India’s consumption culture. “The tendency is — the larger your basket size is, the more you save. With consumers getting habituated to modern trade, the basket size is increasing by default. Modern retail has thrown at us a number of new categories, products in so many variations. Our forefathers may have always consumed ragi, but consumers now see a dozen variations of ragi biscuits. And they are willing to experiment,” he explained.

According to Boston Consulting Group’s estimates, at the beginning of 2011, organised retail is of $28 billion size with a 6-7% penetration of the overall retail trade. Of this, though, food and grocery are smaller in size than fashion and other segments, but offers the highest growth opportunity. This is because Indian household spending on food is one of the highest in the world with 48% of income spent on food and grocery needs.