Large-format grocery retailers are giving way to compact, tech-driven stores, and chains are betting on unique culinary experiences and hyper-personalization in the battle for customers, UTG company Director Evgeniya Loktionova told Interfax-Ukraine. “Modern grocery retail is undergoing a massive transformation: classic large-format stores are giving way to compact, flexible, and tech-driven stores focused on speed and meeting customers’ daily needs,” Loktionova commented.

She noted that grocery retail formats are currently evolving in several directions. The most noticeable trend is a shift toward micro-formats and compact spaces. Instead of large stores, retailers are focusing on convenience stores and mini-markets ranging from 50 to 400 square meters in size.

Second, retailers are moving as close as possible to customers. This is why ultra-proxy and Pick Up Point formats (100–150 sq. m) are actively developing in residential complexes and transportation hubs. At the same time, every square meter is optimized to maximize sales. For example, key product categories are selected, and areas for fresh vegetables, fruits, meat, and dairy products are expanded, with space allocated for ready-to-eat meals (delicatessen, sushi, hot dogs, pizza), baked goods sections, and coffee corners.

The development of private labels continues, as they generate high margins and foster customer loyalty.

Services and automation are being developed, such as self-service and checkout automation – self-checkout kiosks are being introduced, and there are already unstaffed micromarkets around the world.

Click & Collect and express delivery are being introduced through integration with express delivery services, along with the option to pick up your online order at a nearby store.

According to Loktionova, in addition to these global trends, the domestic retail sector is also focusing on developing energy independence; having a backup power supply has become a mandatory service and equipment standard.

To stand out from the competition and avoid blending in with other players, retailers employ three main strategies. The first is offering a unique culinary experience (experiential retail): transforming the store into a food hall. Customers come not just for ingredients, but to eat right in the market (aesthetic food zones, open kitchens).

An example of the second strategy—emotional design and conceptuality—is the Silpo concept stores. De facto, stores are becoming multifunctional spaces.

The third strategy focuses on hyper-personalization: using mobile apps and AI, customers receive personalized discounts based on their real-time purchase history.

The demand for classic, massive, high-traffic hypermarkets has dropped significantly. Consumers no longer want to spend 2–3 hours on the weekend traveling out of town to stock up for two weeks in advance. This trend is driven by the growth of online delivery, declining purchasing power, and the desire to save time.

“However, the large-format model isn’t dying out – it’s evolving. Major players are shifting toward the ‘compact supermarket’ format (up to 2,000 – 3,000 square meters) or opening their own grocery outlets within other retail hubs; a prime example is the expansion of ‘Epicenter Food,’” says Loktionova.

According to her, large supermarkets and hypermarkets can attract traffic by offering an exclusive product range or significant price advantages, or by creating an ecosystem of services (pharmacy, dry cleaning, pet supplies, children’s play area, order pickup point, bank branch, etc.).

Another trend, within the framework of omnichannel retailing, is the use of hypermarket space as a Dark Store—that is, a hub for assembling large online orders and subsequent delivery to homes or smaller pickup points within the network.

“In conclusion, I want to note that the market is fully adapting to the shopper’s needs: for a quick snack or daily essentials – a small, tech-driven format right around the corner; for emotional shopping or large purchases – a transformed supermarket hub,” says Loktionova.

UTG company was founded in 2001. The company has developed over 1,300 real estate concepts. Over the years, 4.7 million square meters of commercial space in Ukraine have been leased with the company’s involvement.

Source: https://interfax.com.ua/news/economic/1171723.html?utm_source=telegram