A supermarket is a departmentalized self-service store offering a wide variety of food and household merchandise. It is larger in size and has a wider selection than a traditional grocery store and it is smaller than a hypermarket.
The supermarket typically comprises meat, produce, dairy, and baked goods departments along with shelf space reserved for canned and packaged goods as well as for various nonfood items such as household cleaners, pharmacy products, and pet supplies. Most supermarkets also sell a variety of other household products that are consumed regularly, such as alcohol (where permitted), household cleaning products, medicine, clothes, and some sell a much wider range of non-food products.
The traditional supermarket occupies a large floor space on a single level and is situated near a residential area in order to be convenient to consumers. Its basic appeal is the availability of a broad selection of goods under a single roof at relatively low prices. Other advantages include ease of parking and, frequently, the convenience of shopping hours that extend far into the evening. Supermarkets usually make massive outlays for newspaper and other advertising and often present elaborate in-store displays of products. Supermarkets are often part of a chain that owns or controls (sometimes by franchise) other supermarkets located in the same or other towns; this increases the opportunities for economies of scale.
In North America, supermarket chains are often supplied from the distribution centers of a larger business, such as Loblaw Companies in Canada, which owns thousands of supermarkets across the nation. They have a distribution center in every province — usually in the largest city in the province.
Supermarkets usually offer products at low prices by reducing margins. Certain products (typically staples such as bread, milk and sugar) are often sold as loss leaders, that is, with negative margins. To maintain a profit, supermarkets attempt to make up for the low margins with a high overall volume of sales, and with sales of higher-margin items. Customers usually shop by putting their products into shopping carts (trolleys) or baskets (self-service) and pay for the products at the check-out. At present, many supermarket chains are trying to reduce labor costs further by shifting to self-service check-out machines, where a group of four or five machines is supervised by a single assistant.
A larger full-service supermarket combined with a department store is sometimes known as a hypermarket. Other services that supermarkets may have include banks, cafés, creches, photo development, video rental, pharmacies, and/or gas stations.