Siâ® Harrington
Nearly 90% of Britain's largest independents believe Tesco's proposed purchase of T&S Stores will have an impact on their business, with two-thirds believing it will be negative.
A poll of senior executives from The Grocer's Top 50 independent retailers revealed deep concerns.
A quarter said their future as an independent retailer was now more uncertain.
"The acquisition will change customer perception of what a convenience store should offer  more focus on fresh/short-life chilled products and less price premium versus the supermarkets.
"Only those that can replicate such an offer will be able to compete," said one large retailer. According to another: "The T&S deal will have a massive effect on the market if it proceeds.
"I am sure it will take a long time for this number of stores to be assimilated.
"But when they are the nature of convenience store retailing will have changed."
The key area of concern was Tesco's preferential terms with suppliers. "The independent sector will have to rely upon the innovation and support of its suppliers and on price we are already at a disadvantage," said one respondent.
The managing director of a family business affiliated to a symbol group said: "It is a fact that (we) get nowhere near the cost prices of the big multiples," although he added: "Part of this is due to lack of discipline in the symbol groups which must now improve to give suppliers confidence in our ability."
Half of those questioned believe the Office of Fair Trading should block the deal. "Tesco will force the closure of smaller local independents, many of which will be family run, and that must be a bad thing," said one respondent.
While 100% of those polled said Tesco had what it took to make it in convenience, the majority thought it would not be an easy ride.
"Not at the margins they are used to," said the chairman of a family-owned company. "The cost of maintaining a large estate of small, relatively low turnover stores may eventually come to haunt them and their investors."
A Scotland based retailer thought Tesco would make it work "only at a certain level, ie 2,000 sq ft and upwards."
All our respondents anticipated further consolidation in the sector but they expected the costs of acquisition to be higher. As one said: "Looking at it another way, it does make the company's assets potentially attractive to one of the major grocers."
>>p30 Reader Panel, p32 Opinion
{{NEWS }}
Nearly 90% of Britain's largest independents believe Tesco's proposed purchase of T&S Stores will have an impact on their business, with two-thirds believing it will be negative.
A poll of senior executives from The Grocer's Top 50 independent retailers revealed deep concerns.
A quarter said their future as an independent retailer was now more uncertain.
"The acquisition will change customer perception of what a convenience store should offer  more focus on fresh/short-life chilled products and less price premium versus the supermarkets.
"Only those that can replicate such an offer will be able to compete," said one large retailer. According to another: "The T&S deal will have a massive effect on the market if it proceeds.
"I am sure it will take a long time for this number of stores to be assimilated.
"But when they are the nature of convenience store retailing will have changed."
The key area of concern was Tesco's preferential terms with suppliers. "The independent sector will have to rely upon the innovation and support of its suppliers and on price we are already at a disadvantage," said one respondent.
The managing director of a family business affiliated to a symbol group said: "It is a fact that (we) get nowhere near the cost prices of the big multiples," although he added: "Part of this is due to lack of discipline in the symbol groups which must now improve to give suppliers confidence in our ability."
Half of those questioned believe the Office of Fair Trading should block the deal. "Tesco will force the closure of smaller local independents, many of which will be family run, and that must be a bad thing," said one respondent.
While 100% of those polled said Tesco had what it took to make it in convenience, the majority thought it would not be an easy ride.
"Not at the margins they are used to," said the chairman of a family-owned company. "The cost of maintaining a large estate of small, relatively low turnover stores may eventually come to haunt them and their investors."
A Scotland based retailer thought Tesco would make it work "only at a certain level, ie 2,000 sq ft and upwards."
All our respondents anticipated further consolidation in the sector but they expected the costs of acquisition to be higher. As one said: "Looking at it another way, it does make the company's assets potentially attractive to one of the major grocers."
>>p30 Reader Panel, p32 Opinion
{{NEWS }}
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