A category killer is a retailer, often a
big-box store
A big-box store, a hyperstore, a supercenter, a superstore, or a megastore is a physically large retail establishment, usually part of a chain of stores. The term sometimes also refers, by extension, to the company that operates the store. The ...
, that
specializes in and carries a large product assortment of a given category.
Through their wide merchandise selections, low pricing, deep supply, large
buying power
Bargaining power is the relative ability of parties in a negotiation (such as bargaining, contract writing, or making an agreement) to exert influence over each other in order to achieve favourable terms in an agreement. This power is derived f ...
, and
market penetration
Market penetration refers to the successful selling of a good or service in a specific market. It involves using tactics that increase the growth of an existing product in an existing market. It is measured by the amount of sales volume of an ...
, they have a
comparative advantage
Comparative advantage in an economic model is the advantage over others in producing a particular Goods (economics), good. A good can be produced at a lower relative opportunity cost or autarky price, i.e. at a lower relative marginal cost prior t ...
over other, smaller retailers, and can greatly reduce the sales of rival retailers within that category, in the area
and beyond it.
In essence, they are a price- or discount-based specialist mass-retailer.
such as
OfficeMax
OfficeMax is an American office supplies retailer founded in 1988. As an independent chain, it was the third-largest office supply retailer in the United States. Following a 2013 merger, it is currently a brand and subsidiary of Office Depot.
...
,
Best Buy
Best Buy Co., Inc. is an American multinational consumer electronics retailer headquartered in Richfield, Minnesota. Originally founded by Richard M. Schulze and James Wheeler in 1966 as an audio specialty store called Sound of Music, it was r ...
,
Barnes & Noble
Barnes & Noble Booksellers is an American bookseller with the largest number of retail outlets in the United States. The company operates approximately 600 retail stores across the United States.
Barnes & Noble operates mainly through its B ...
, and
Hobby Lobby
Hobby Lobby Stores, Inc., formerly Hobby Lobby Creative Centers, is an American retail company. It owns a chain of arts and crafts stores with a volume of over $5 billion in 2018. The chain has 1,001 stores in 48 U.S. states. The Green family fo ...
have been considered category killers.
Once typically found in
power centers, increasingly they are found in or adjacent to (as an outbuilding of) repurposed traditional malls.
Large category killer stores are mostly in mid- and large-sized cities, because a large population is required to be feasible.
Impact
Local merchants in cities with category killers "may suffer a substantial reduction in sales," and stores in a wider radius can be affected by the draw.
Between 1983 and 1993,
Iowans spent 31% less in hardware stores, translating to a loss of 37% in the same time to those stores as a result of category killer stores.
Canadian retailers
United States retailers
Sporting goods stores that are category killers range in footprint from .
Home Depot
The Home Depot, Inc., often referred to as Home Depot, is an American multinational corporation, multinational home improvement retail corporation that sells tools, construction products, appliances, and services, including fuel and transportat ...
carries 30,000 items in stores.
See also
*
Big-box store
A big-box store, a hyperstore, a supercenter, a superstore, or a megastore is a physically large retail establishment, usually part of a chain of stores. The term sometimes also refers, by extension, to the company that operates the store. The ...
References
External links
*
Competition (economics)
Brand management
Retail formats
Power centers (retail)
Superstores
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