At a time when there is a stiff competition among the retail formats for footfalls and shoppers are spoilt for choice, supermarkets are likely to feel the pinch, says an Indian Institute of Management, Ahmedabad study.

The study, a working paper titled 'Role of family in format choice', highlights this concern, and offers some solutions. "There is so much competition within the formats that unless supermarkets make phenomenal changes, they will eventually lose out to hypermarkets and small kirana stores," says Piyush Sinha, a retail and marketing expert and a faculty member at IIM-A.

The study classifies the formats as convenience stores, supermarkets, supercentres and mass merchandisers.

Convenience stores have the lowest breadth of assortment, but the highest price. Supermarkets, on the other hand, have higher breadth as compared to convenience stores but lower prices.

Supercentres, on their part, are different from traditional supermarkets as they offer items at lower prices and one-stop shopping. Mass merchandisers, while offering the lowest-price, also offer a one-stop convenience.  However, they are generally located out of town, and are incovenient when it comes to travel.

"Unlike earlier times when customers approached retail stores with a single-point agenda, today the basket size of shoppers has expanded with an increase in influence from other family members, " explains Sinha.

He cautions: "While hypermarkets can afford to offer huge discounts and local kirana stores offer personalised services, supermarkets do not provide either. The only way the supermarkets can survive is by offering very good customer service to suit each customer profile." Customers do not prefer a cheaper store or one-stop convenience.

A cheaper store might offer lower levels of service, poor presentation, poor atmospherics, and even crowding, which might reduce the benefits drawn and increase the costs, suggest the study.

Similarly, all the customers might not need a wide assortment, and indulge in multi-store shopping, because of category dependence and narrow range in the shopping basket.