The threat of new entrants into the supermarket/ hypermarket industry is relative high as well. This is because while the capital and investment required for establishing a store based super market chain is very high limiting the number of competitors that can enter the market to pose as threatening new entrants the changes in the communications technology and the orientation of the US consumers to make their purchases online increases the threat of new entrants into the industry. The establishment of online operations for a retailer is very cost effective as the costs associated with it are limited while the target market available to such online retailers is wide in scope and range.
The threat of substitute products in the supermarket/ hypermarket industry is very high due to the increased competition and rivalry between the players and the similar business operation retail brands and the product and service offering provided by the companies to the target market. The differential by the players in the supermarket/ hypermarket industry for their products and service offering is made through branding, image based product promotion and the experience of shopping that they provide to the customers.