CASE STUDY - LAYOUT OF SPAR SUPERMARKET IN VORNA VALLEY, GAUTENG

The Spar Group operates supermarkets in South Africa. Spar supermarkets compete by choices of location, which are convenient for basic necessities and daily small supplies. To remain profitable, every Spar manager must maximise the revenue and contribution per square metre but also minimise the cost of operating the store, in terms of items stocked.

A typical spar supermarket has an unusual layout. In common with most supermarket designs, the check-outs are positioned near the exit, but during most of the day only a few are used. Cigarettes, biltong and sweets are sold at the check-outs. Daily newspapers are placed near the exit door. Cashiers face into the store, towards the queue. The store has four to five check-outs - a very large number for the size of the store. This is because there is a large peak of sales in the early evening, when people return from work, and long queues at the check-out would be totally unacceptable to regular (tired) customers.

Spar has chosen to use relatively wide aisles between the shelves, to ensure good flows of trolleys, but this has been at the expense of reduced shelf space, which would allow a wider range of stocked products. Having established a basic layout of the fixed equipment, the actual location of all products is a critical management decision, directly affecting the convenience for the customer, their level of spontaneous purchase, the costs of filling the shelves and the variety of product range. The overall layout of the supermarket is a typical process layout, with separate, clearly marked self-service areas for packaged food, drinks, fruit and vegetables. Customer flows are random, because of the frequent but relatively small purchases made by regular customers. In contrast, shoppers at many large hypermarkets are encouraged to flow past most of the displays in a logical and uniform route. The served delicatessen (which sells products with above-average margins) is located between the bakery and the butchery/dairy areas so that most shoppers must pass it - to be tempted by attractive displays and to make spontaneous purchases. The displays of fruit and vegetables are located adjacent to the main entrance, as a signal of freshness and wholesomeness, providing an attractive and welcoming point of entry to the store.

At a more detailed level, the actual position selected for each product must be decided. High turnover, 'essential', known value items (KVIs), such as rice, pasta, sugar and oil, are positioned centrally and visibly, so that they are easy to find. Profitable, fast-moving items are displayed at eye level, both to help the customer and to make restocking easier for employees. Conversely, low-margin and low-turnover items are placed low down. Bulky or heavy products are located at the end of aisles, near the storage area, to facilitate restocking. Frozen foods are located near the check-outs, so that they can be purchased last. In some supermarkets, these positions are only used for promotion, as customers move more slowly around the end of the aisles and the goods on display can be seen from most directions.

Explain the four Vs {4} and provide an example of each in the context of the case study example provided {4}. (8)