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In: Operations Management

Discount retailers like Wal-Mart and Target have entered the market. But why have these made it...

Discount retailers like Wal-Mart and Target have entered the market. But why have these made it more challenging to make money for supermarkets?

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Expert Solution

Discount retailers like Walmart and Target has made it difficult for Supermarkets to make money because discount stores like Walmart and Target are hypermarket and they have more broad selection of brands and collection of products. Hypermarkets sell products at wholesale prices when they sell the products in bulk and more volumes. Thus hypermarkets give discounts to consumers and also encourage memberships to give further benefits. Hypermarkets are also known for providing more wide range of financial services to customers than supermarkets.

Most of the hypermarkets have their own private labels and brands that they sell on discounted rates and have more wide range of products and latest fashion trends. Hypermarkets are also known to have more marketing promotions and digital marketing events than supermarkets, thus making it more challenging for Supermarkets to make money. Hypermarkets have more extensive online e-commerce services, home delivery of products and customer services for their loyalty customers. Hypermarkets also have more global presence and are more popular globally that increases the scope of selling of products and services than supermarkets.

keosha answered 1 month ago
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