Overseas Aisles is a regular feature that examines notable grocery initiatives outside of the US.
As Amazon looks to replicate its success in e-commerce with an expanding footprint of physical grocery stores, a Portugal-based multinational company offers a look at what it’s like to operate a vast grocery store presence as the leading retailer of a country.
MC, from the multinational business group Sonae, operates the multiformat Continent retail chain. There are urban hypermarkets (Continente), large supermarkets (Continente Modelo) and small urban neighborhood stores known as “proximity markets” (Continente Bom Dia).
While nearly all of the stores under the Continente food retail brands are company-managed, MC also has hundreds of franchised grocery stores.
In total, MC had 1,342 stores at the end of 2021, with grocery stores comprising almost half of the portfolio. Among that tally is Continente’s first stand-alone supermarket, which opened in Lisbon in May 2021, just months after Amazon opened its first Amazon Fresh store with purchases without paying. in the United Kingdom
Along with its variety of store formats, Continente has also been driving digital innovation, including a tool that automatically fills digital carts for online shoppers and in-store technologies like scan-and-use shopping. They all relate to the “fail fast” culture of testing hypotheses quickly and focusing on the ones that look promising, he said. Bruno Mourão, Head of IT Transformation and IT Strategy and Experimentation of MC’s Information Systems arm.
“I think the strategy of having multiple formats can be a really effective way to reach consumers, whether it’s where they live or on occasion,” said Ken. Fenyopresident of research and advice center vision Research, a global firm specializing in retail and technology.
A range of formats
Continent has been busy expanding its fleet of smaller urban stores. In 2021, MC opened 13 new food retail stores, mainly proximity formats and stores located in the two largest cities in Portugal: Lisbon and Porto.
Mourão said that Continente is taking advantage of its Bom Dia format to get closer to where buyers live, a strategy many shopkeepers in the United States have turned in recent years to be closer to their customer bases.
While most of MC’s grocery formats have seen flat or slight fluctuations in store numbers since the pandemic began, their boom diameter banner, which translates to the beloved Portuguese greeting “good morning,” has grown steadily in recent quarters. At the end of June, the Bom Dia format had 146 stores, compared to 122 at the end of March 2020.
The Bom Dia stores are about 10,000 square feet each and include categories such as bakery, deli, spirits, takeout, and fresh meat and seafood, according to Cada Design, the MC firm. in charge of creating banner concept.
Smaller formats make it easier to support the kind of purchases that people go into every day to grab a handful of items, Fenyo said. In general, Europeans tend to take more trips with smaller baskets compared to American shoppers, he said: “They are much more likely to buy what [they] I want for that day or a couple of days.”
Stores with small footprints in urban areas, in particular, can not only attract customers for trips with smaller baskets, but can also support a grocery store’s e-commerce program by driving fast delivery to neighborhoods, Fenyo said.
While some retailers in the US, such as Target and Walmart, are testing small-format stores, they can look to traditional grocers abroad, which are exploring different store formats at the smaller end, for inspiration, he said. Anne Mezzenga, a Target veteran and co-CEO of the Omni Talk retail blog.
“It still feels like [U.S. retailers are] trying to crush a Walmart by 4,000 square feet,” Mezzenga said. “It doesn’t feel like they’re rethinking, ‘What [does] What does the small format or the urban format of a Walmart store really look like?’”
At the other end of the size spectrum, Continente capitalizes on one-stop shopping needs with its namesake hypermarket format. Several shopping malls in Lisbon are home to Continente stores, including the Vasco da Gama Shopping Center, the Colombo Shopping Center, and the Telheiras Shopping Center. While grocery stores taking up space in malls isn’t a new thing, American shoppers would likely be surprised to discover Continent stores located inside malls, rather than appearing on the perimeter.
Mezzenga said the location makes sense, especially as e-commerce fractures mall identities as destinations for “search-and-destroy shopping mission.”
Along with food banners, MC also has various adjoining formats including a pharmacy chain, pet care services, coffee shops, and its newly launched drive-thru restaurant banner, Kitchen Continent.
eye for innovation
MClike Amazon, it has focused on digital innovation as part of its physical footprint in the grocery store. Continent has a new self-checkout pilot, according to a recent earnings reportand welcomed new gamification features like spin the wheel challenges and digital advent calendars to your loyalty program in 2021.
Particularly noteworthy is its one-year-old autonomous supermarket.
Called The Continente Labs, the roughly 1,610-square-foot store offers a scanless, cashless experience powered by the Portuguese startup Sensei. Like Amazon stores with Just Walk Out, The Continente Labs location allows people to scan a code with their phones to get in and out and uses a host of technology (ceiling cameras, shelf sensors, and computer vision). ) to track which products buyers select. In total, the store has approximately 600 cameras and sensors. It also uses electronic shelf labels.
Fenyo They said grocers are testing small, automated stores to understand how the technology works, how much it costs and the changes it brings to their operations. Autonomous stores are seeing “a lot of interest” in Europe, especially due to higher labor costs and more restrictions around hours than in the US, he said.
Continente innovation also includes the similarly named Continente Food Lab, which launched in 2019 to help develop private labels and showcase unique products from commercial and niche vendors. Through the program, Continente has distributed products like petite daddyorganic frozen baby meals and soups; True Gum’s plastic-free gum and based on insects “Tasty Mealworms” snacks and “Mealworm Bites” protein bars from startup Portugal Bugs. In select hypermarkets, Continente has dedicated floor space to help customers find products bearing the Continente Food Lab seal.
In the intensely promotional shopping culture of Portugal, Continente distributes personalized brochures and coupons to its customers, Mourao said. Continente also offers a subscription service that pre-fills items in customers’ online carts for weekly orders..
Continente uses technology in different ways to meet the needs of customers in stores. Mourão noted that there are self-checkout lanes, service counters and click-and-collect services among the available options.
Continente can take advantage of its different retail formats while experimenting with new technologies and offerings for consumers, Fenyo and Mezzenga agreed.
“Are you able to [fail fast] when you have multiple canvases to work on. … I think it’s imperative to have that culture of learning and experimentation in order to provide the best experiences for your customers,” she said.
Clarification: An earlier version of this story referred to MC by her former name, Sonae MC, which was recently shortened. History has updated the Petit Papão brand to the Portuguese spelling. The story was also updated with information about MC’s franchise stores.