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The Communal Pantry

The dominance of quick trips means that retailers are functioning as the communal, neighborhood pantry, offering just what the household needs with emphasis on fresh (quality) products at modest prices.

In the developing world, traditional retailing involves mostly very small neighborhood shops where patrons of limited means purchase only what they need “right now.” These customers cannot afford to stock a pantry at home, so the neighborhood market becomes a communal pantry. In other words, it creates community. Small, family-owned stores, some as small as closets, provide their customers with needs on a daily basis. For example, in India, about 96 percent of the retail marketplace consists of small shopkeepers. Across emerging markets, an estimated 80 percent of people buy their wares from mom-and-pop stores no bigger than a closet. “Crammed with food and a hodgepodge of household items, these retailers serve as the pantries of the world’s consumers for whom both money and space are tight.”9 In Mexico, despite being one of Wal-Mart’s most successful markets, high-frequency stores are still regularly visited by almost three-quarters of the population. Although the average spent is only $2.14 a day, the annual sales total reaches a significant $16 billion.

Small stores catering to the quick tripper in developed markets are also serving as a communal pantry. In this case, the shift is not because of a lack of refrigeration or funds but due instead to a change in lifestyle and a shortage of time. Once the home pantry was the communal focus of the home, but now kitchens have often evolved into a fast-food preparation point to adapt to changing habits, with people grazing, or eating on the run. The household pantry is thus becoming de-emphasized because more customers would rather pick up quality, fresh merchandise in the local “bodega” or neighborhood market rather than stock a home pantry, even though they could easily afford to. So, in this way, the modern consumer is returning to a “communal pantry.” This, of course, has had a consequential effect on buying patterns and subsequently on storage.

So, this is a phenomenon that affects all strata of society, from the rich to the poor: People are visiting stores very regularly, possibly every day, buying what they want when they need it. The retailer takes on the responsibility for warehousing and stocking the essentials that consumers no longer have the space for or desire to stock, and keeps the products fresh and available. This also leads to the homogenization of rich and poor, who visit stores such as Wal-Mart, Costco, and Fresh & Easy. The objective is to have shoppers come in several times a week to pick up dinner, so these stores are essentially acting as a communal pantry.

A 2007 report by Booz Allen Hamilton notes that, after years of hype about “big box” retailing, there is an increasing number of small-format success stories, ranging from convenience stores to discounters to stores that sell basic staples and key grocery items in a cost-effective neighborhood format.10 The report cites three reasons for the trend. First, consumer experience in massive retail stores is becoming increasingly unattractive. Lower-income shoppers, in particular, are uncomfortable in large stores because of impersonal service and the sheer number of items on offer, which underlines their lack of spending power. Second, smaller stores are no longer necessarily saddled with higher prices or lesser quality. Finally, small formats give retailers the chance to have a more intimate relationship with customers and employees, which provides scope for genuine innovation in store and business model design.

This is a global phenomenon and is leading to the breaking down of the divide between the developed and developing world in regions such as Europe and Latin America—a democratization of retail. As the Booz Hamilton Allen report notes: “In Europe’s affluent economies, consumers are looking for convenience items, including meals, to suit their busy lifestyles of single heads of households. Retailing in Latin America, by contrast, is focused much more on low-income and larger families. Part of the explanation for why smaller formats are working in Latin America is that items such as dry pasta, cooking oils, milk, bath soap, and laundry detergent can be acquired in precisely the right quantities for daily use. The stores are, in effect, the customers’ pantries. [italics added]”

As these smaller stores have begun to sell high-quality items at low prices, they have come head-to-head with traditional, passive retailers. More important, this shift has tremendous social significance for the countries where implemented, because the product quality has a strong appeal to wealthy customers, whereas the lower pricing appeals to low-income customers. This begins to make retailing a new and valuable community builder. Retail is, once again, at the cutting-edge of social evolution.

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