I found the article in The Grocer (‘Fair of fascia’, 18 August) very interesting as it described the requirement for convenience stores to compete with the multiples.
Ian Bishop of Costcutter states: “The greatest thing multiples ever did to this sector is force retailers to add professionalism and discipline to their stores.Gone are the days when shoppers were happy to go into poorly merchandised stores.”
The multiples have been looking to dominate the convenience sector for more than a decade, so lessons should already have been learned and put into practice - indeed, it should be the indies backed up by a strong brand now showing the mults the way.
If you want to compete with the mults then a strong fascia is imperative, as is ranging, hygiene, availability and great service. Price is important too, but only when you get the first parts right. You then have to demonstrate the disciplines that are a ‘given’ when dealing with the multiples.
Suppliers are only going to back you - either through competitive terms or promotional support - if you as a retailer give them what they want. Suppliers also look to support the retailers who provide volume growth, so in-store merchandising and promotional disciplines are absolutely vital, and this is where I know, from work carried out by eXPD8 Field Marketing, that the convenience retailers are just not as disciplined as the multiples.
“Convenience retailers are just not as disciplined as the multiples”
It would be wrong to ignore strong brands such as Spar and Nisa, who have consistently delivered competitive terms, compelling promotional packages and innovation for the independent retailer. I am sure the reason they have been able to achieve this is their ability to demonstrate to suppliers that they will deliver the in-store disciplines to achieve volume growth.
I know from my time involved with one of the stronger convenience retailers that they were satisfied with achieving just over 50% range compliance and they accepted that their retailers liked to shop around the various cash & carries for the best deals! I found this staggering. When I led a buying team (the Co-operative Retail Trading Group), we amalgamated The Co-op’s buying volume into one place. This delivered real financial benefits, from range harmonisation, in-store and promotional disciplines and of course fewer delivery points.
Perhaps the fiercely independent Scotmid Co-op will remember joining CRTG in 1998 and the way the consequent financial benefits helped it remain strong and independent. Surely this is the point: belonging to a strong brand with all its disciplines may just protect your independence and allow you to compete with the multiples on a more equal basis.
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