"Excuse me, where is the supermarket?"
‘超市在哪里？’ literally translates to 'supermarket is at where?' '哪里在超市？‘ literally translates to 'where is at supermarket?'
As you can see, the second sentence has a problem due to the ‘在’ meaning 'is at', so it makes no sense. The correct translation is the first one — ’超市在哪里‘.
Another way to express supermarket is 超級市場, which is also correct. But Duo missed this translation.
Yes, 超級市場 is more formal and less likely to be spoken that the contraction 超市, but if you are reading signs there is a good chance that the sign would have the full version, so be aware of this.