from John Emeny, chairman, Rusts Ltd
Sir; The move into neighbourhood retailing is perhaps the final step that Tesco can take within the UK to maintain its profit momentum. It has led the trade in size of store, range of merchandise, price, late-night shopping, delivery and finally 24-hour shopping. Despite its unquestioned success, the stock market demands more. Tesco, like all its competitors, has its own serious problems.
None of this is much compensation for neighbourhood retailers. Over the years their share of the market has dramatically declined and they have had to increase their product range in line with the superstores, often at the expense of neighbouring retailers. Many parades and villages have been decimated.
The difficulty of combating price did most damage in removing them as first choice in the shoppers mind. However, as the superstores continued to expand, manufacturers also came under severe margin pressure and saw little relief in supporting the independent sector. Today, the delivered wholesaler is almost the only source of supply for the independent. Together they must face the future, recognising their mutual dependence.
It is no use claiming the sector is unique. Top-up retailing or convenience retailing, are descriptions that win little support when our customers have a multiple retailer within easy distance. Both retailer and wholesaler need to reassess their roles and the mutual support they must offer. With sales of cigarettes and phone top-ups often representing a third of retail turnover, the retail prices recommended by most wholesalers and the low-margin return offered, underlines how remote they are from the retail cutting edge. The wholesalers need to slim down their operations and take a less ambitious approach to marketing and advertising, in order to reduce their margins. Shouting price, while disregarding margin, in an attempt to show how attractive they are, is a recipe for disaster.
Retailers must continue to invest all they can in ensuring their shops represent the kind of environment that customers expect. The Association of Convenience Stores has an important role to play but it needs to underline its total commitment to the independent sector. Only then can it demand the full participation of the wholesalers' retail membership. There is much to be gained in allowing retail group members to share in the collective experience of the association.
There is still time for the dedicated independent and the most efficient and progressive wholesalers to ensure a good future together, but it won't happen by accident. This is now the time to build a trust between them and their trade association. Perhaps then manufacturers may recognise that offering more support to the independent sector is in their own best interest. For too long the independents have had to trade at a huge price disadvantage and it is to their credit that many have survived so successfully. They deserve a better deal, and the future of our neighbourhood and countryside environment depends on it.
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Sir; The move into neighbourhood retailing is perhaps the final step that Tesco can take within the UK to maintain its profit momentum. It has led the trade in size of store, range of merchandise, price, late-night shopping, delivery and finally 24-hour shopping. Despite its unquestioned success, the stock market demands more. Tesco, like all its competitors, has its own serious problems.
None of this is much compensation for neighbourhood retailers. Over the years their share of the market has dramatically declined and they have had to increase their product range in line with the superstores, often at the expense of neighbouring retailers. Many parades and villages have been decimated.
The difficulty of combating price did most damage in removing them as first choice in the shoppers mind. However, as the superstores continued to expand, manufacturers also came under severe margin pressure and saw little relief in supporting the independent sector. Today, the delivered wholesaler is almost the only source of supply for the independent. Together they must face the future, recognising their mutual dependence.
It is no use claiming the sector is unique. Top-up retailing or convenience retailing, are descriptions that win little support when our customers have a multiple retailer within easy distance. Both retailer and wholesaler need to reassess their roles and the mutual support they must offer. With sales of cigarettes and phone top-ups often representing a third of retail turnover, the retail prices recommended by most wholesalers and the low-margin return offered, underlines how remote they are from the retail cutting edge. The wholesalers need to slim down their operations and take a less ambitious approach to marketing and advertising, in order to reduce their margins. Shouting price, while disregarding margin, in an attempt to show how attractive they are, is a recipe for disaster.
Retailers must continue to invest all they can in ensuring their shops represent the kind of environment that customers expect. The Association of Convenience Stores has an important role to play but it needs to underline its total commitment to the independent sector. Only then can it demand the full participation of the wholesalers' retail membership. There is much to be gained in allowing retail group members to share in the collective experience of the association.
There is still time for the dedicated independent and the most efficient and progressive wholesalers to ensure a good future together, but it won't happen by accident. This is now the time to build a trust between them and their trade association. Perhaps then manufacturers may recognise that offering more support to the independent sector is in their own best interest. For too long the independents have had to trade at a huge price disadvantage and it is to their credit that many have survived so successfully. They deserve a better deal, and the future of our neighbourhood and countryside environment depends on it.
{{COMMENT & LETTERS }}
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