Supermarkets ‘need to revisit expansion strategies’ in light of government levelling-up agenda, say experts

Supermarkets will need to review estate strategies in light of the government’s levelling-up agenda or risk giving an advantage to rivals, according to store location experts.

The warning came as analysis revealed how under-represented some supermarkets are in the first towns in line to benefit from “King’s Cross-style regeneration projects” in government plans.

Wolverhampton and Sheffield were last month named in a levelling-up white paper as the first of 20 towns set to benefit from increased spending on infrastructure and housing.

Analysis by location data specialists CACI has revealed how some supermarkets are over-represented in the two towns compared to elsewhere in the country, while others are under-represented.

In both towns, Aldi is best represented compared to the rest of the UK. In Wolverhampton it has 72% more ‘store share’ than its UK average, and in Sheffield it has 34% more.

At the other end of the scale, Waitrose was the least well-represented of the selection of major supermarkets included in the analysis. In Sheffield it has 71% less store share than its UK average. In Wolverhampton it has zero store share, its nearest branch being in Stourbridge.

“Retailers that already have good presence in those towns have the potential to benefit from investments in additional housing and regeneration,” said Valentins Kirillovs, CACI head of grocery.

“Creating forward-looking network strategies will require retailers to closely monitor how levelling-up initiatives are rolling out.

“Grocers will need to revisit expansion strategies and maybe consider some areas that they have not done previously.”

Kirillovs added: “Some of the long-term impact of the levelling-up policies could lead to a shift in shopper mix across store catchments as well as regentrification of some areas.”

He said the potential change in customer mix in some areas would also call for a “more dynamic approach” to local ranging.

“Policies like this highlight how fluid the macro environment can be and how an agile approach in grocery is required, as well as staying customer-centric to understand any shifts in behaviour,” he said.