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Why are Makro stores usually outside city centers? It’s a question that sparks curiosity among South African shoppers navigating long drives for bulk deals. Makro’s 22 warehouse stores, often 10 km or more from urban hubs, save the company millions annually in land costs—up to 50% less than city-center plots. This isn’t just about saving money. It’s a calculated strategy. Cheaper land allows massive stores. Peripheral locations limit competition. And the trek encourages customers to stock up, turning a trip into a one-stop shop. As one shopper put it, “Need dumbbells, meat, a speaker, and a comfy t-shirt? Makro!”
This article dives into the reasons behind Makro’s suburban strategy, drawing on consumer insights and industry data. Retailers, take note: these tactics offer lessons in efficiency, psychology, and long-term growth.
The Cost of Land: Why Suburban Sites Win
Why are Makro stores usually outside city centers? Land is cheaper there. In South Africa, commercial plots in Johannesburg’s CBD can cost R20,000 per square meter, while suburban sites drop to R10,000 or less. Makro seizes this advantage. “Cheaper land,” a consumer observed online, sums it up. By choosing peripheral locations, Makro secures vast spaces—often 10,000 square meters or more—for its warehouse-style stores. These savings translate to lower prices, a cornerstone of Makro’s low-margin, high-volume model.
The impact is clear. A single Makro store, like the iconic Woodmead location, can stock thousands of products, from bulk groceries to electronics, without the rent burden of urban sites. Retailers can learn from this. Use tools like GIS mapping to identify affordable land with good highway access. It’s a simple way to cut costs while maintaining scale. Just ensure the site balances savings with customer reach—too remote, and you’ll lose foot traffic.
Warehouse Design: Built for the Suburbs
Makro’s stores are warehouses in every sense. “The building is a warehouse in its true form,” one commenter noted. “How many warehouses in the CBD?” The answer? Almost none. City centers lack the space for sprawling hypermarkets. Makro’s stores, averaging 12,000 square meters, need room for bulk inventory, wide aisles, and massive parking lots. Suburban or industrial zones provide this at a fraction of the cost.
This design supports Makro’s wholesale ethos. Unlike urban retailers cramming stock into small spaces, Makro spreads out. Customers navigate pallets of goods, from 10kg mayo tubs to flat-screen TVs, with ease. The warehouse model also streamlines restocking. Delivery trucks access suburban stores via highways, avoiding city traffic. Retailers should ask: does your store design match your location? If you’re selling in bulk, a suburban warehouse might be the answer. Just ensure zoning laws permit large-scale retail.
Consumer Psychology: The One-Stop Shop Advantage
Peripheral locations shape how customers shop. “It limits your options so you don’t have the ‘it’s cheaper at Checkers’ mentality,” a consumer remarked. Makro’s distance from competitors like Checkers or Pick n Pay makes it the default choice. Once customers arrive, they’re inclined to buy everything—meat, electronics, clothing—because it’s all there. “The point is to make it your one-stop shop,” another commenter said.
This isn’t accidental. Makro stocks diverse products to consolidate purchases. A single receipt might include groceries, appliances, and gym equipment. This boosts sales per visit, offsetting the cost of the trip. Retailers can replicate this. Offer a wide product range to reduce customer churn. If you’re outside the city, make the journey worthwhile with unique items or bulk discounts. Data backs this up: Makro’s average basket size is R1,800, far higher than urban supermarkets.
The IKEA Method: Making the Trip Pay Off
Makro’s locations mirror a strategy pioneered by IKEA. “If you’ve made the effort to get there, chances are you’ll buy more than you intended,” a consumer noted. The trek to a suburban Makro—often 20 minutes or more—prompts customers to justify the effort. They fill carts with unplanned purchases, from snacks to furniture, to “make the trip worth it.”
This psychology drives revenue. Makro’s stores are designed as destinations, with in-store cafeterias and seasonal displays to keep shoppers browsing. The result? Higher spend per visit. Retailers can adopt this “destination” mindset. Create an experience—think exclusive products or loyalty discounts—that rewards customers for traveling. Makro’s success shows it works. Just ensure your store is accessible by major roads to ease the journey.
Suburban Growth: Building New Hubs
Makro’s stores don’t just occupy suburbs—they transform them. “Just wait a while, a whole suburb will form around it soon,” one commenter predicted. This isn’t exaggeration. Makro’s Woodmead store, opened in 1993, turned a quiet area into a retail hub, attracting other businesses like Builders and Checkers. Today, it’s one of Johannesburg’s busiest shopping zones.
This ripple effect benefits Makro and local economies. Peripheral stores draw foot traffic, spurring development. Over time, new suburbs emerge, increasing Makro’s customer base. Retailers should consider: can your store anchor a growing area? Study zoning plans and population trends to pick sites with long-term potential. It’s a strategy that pays dividends.
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Conclusion: A Blueprint for Retail Success
Why are Makro stores usually outside city centers? It’s a strategy that blends cost savings, consumer psychology, and visionary planning. By choosing suburban sites, Makro slashes land costs, builds massive warehouses, and turns shopping trips into one-stop missions. The approach isn’t flawless—accessibility can be a hurdle—but the benefits are undeniable. Retailers can take a page from Makro’s playbook. Analyze land costs, prioritize highway access, and stock diverse products to create a destination store. Start small: use free tools like Google Earth to scout suburban sites. Makro’s model proves it—location isn’t just about where you are. It’s about what you make possible.
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