Food retail in rural areas: Choosing the optimal format

Abstract

Tightening competition among food retailers stimulates them to develop new formats of stores for urban spaces, which also can be economically efficient in rural areas. Appearance of a new format of stores that excites clientele’s interest and is able to compete with pick-up points and liquor stores may become a key to the domination in the market. The paper examines the prospects of creating an optimal format for food retailers that hold potential for spread in rural areas. Methodologically, the study relies on a systems approach, the cyclical theory of retail, and spatial development theories. The method encompasses three stages: first, holding a comparative analysis of the format structure of food retailers for 2015–2023; second, evaluating the territorial distribution of the two formats of retail chains (hard discounters and convenience stores) using the case of Volga and Ural Federal Districts; third, determining new formats of retail chains outside cities. Based on the analysis of market trends in the development of retail chain stores the paper suggests a conceptual model of the optimal retail format for rural areas with respect to product range, pricing, distribution of sales area, and additional services. The suggestions about the improvements in the model of the retail format for rural areas may spur the retail trade growth and promote the development of trade infrastructure outside urban areas.