Spar must adopt "keener pricing" on key brands to tackle the perception that convenience stores are expensive places to shop, delegates were told at this year's Central Meridian Guild Spar retail conference in Harrogate.
Urging independents to join the Multiple Retail Group to strengthen Spar's negotiating position with suppliers, Spar UK chairman Peter Blakemore said customers were "more price focused in 2000".
Spar md Morton Middleditch warned: "Spar must be careful not to be too pricey."
Blakemore retail director Elwyn Davies added: "Our basket has stood still and the multiples' has come down by 10%. We've got to get our pricing back in line."
Blakemore is now into the fourth week of deep cut promotions on 40 known value items such as Typhoo tea bags, Nescafé coffee and Comfort fabric conditioner.
In some cases Blakemore has secured selective deals with suppliers, and where this has not been possible, the additional costs incurred by promotions are being absorbed by wholesaler and retailer, said Davies.
But he was not unduly concerned about the multiples' foray into convenience. "I'm not being arrogant, but we've been at it far longer than they have, and I'm saying that as an ex-Sainsbury's manager."
There are bigger threats than Sainsbury's Local, added Middleditch. Notably, changes to Sunday trading legislation, possible increases in the minimum wage and 24 hour licensing, which could prove a double edged sword.
All day licensing was undoubtedly a great opportunity for Spar, he said, "but its inevitable effect will be to weaken the case against restricted Sunday opening hours for the multiples."
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