In an article last month which assessed the impact that the proposed new Tesco in Hove is likely to have on independent retailers, the majority of retailers and residents expected to see nothing but benefits (The Grocer, August 23).
However, CACI believes that the major grocery multiples may have a rather different view when the 37,000 sq ft store comes to the heart of this busy south-coast residential and retail area.
Waitrose and Sainsbury, for example, could feel a squeeze to the tune of a combined £300,000 a week.
Once cannibalisation of the Tesco stores along the coast at Shoreham and Portslade have been accounted for, Tesco still looks set to see an impressive return from its investment.
There is a tightly constrained catchment bordered to the north by the Downs, to the south by the coast and with a very rapid cut-off to the east where shoppers prefer to remain in Brighton rather than face the congested drive to Hove.
However, the high population density and the relatively weak local multiple offer means that Tesco should see the store returning sales densities just inside the top half of its estate and a turnover well inside the top 25%.
Waitrose is likely to feel the brunt of the new Tesco. However, an analysis of the catchment profile (graph below) shows the local customers of Hove have a stronger affinity to Waitrose than any of the main grocery fascias.
The core Tesco profile has a very poor fit to the Hove catchment, which has a unique profile, polarised between trendy metropolitan types and prosperous retirees.
With Waitrose customers being renowned for their loyalty, it may hold onto considerably more of its customers than would normally be expected and Tesco might have to fight harder to gain market share than it may have first thought. None of the key multiples operating in the local area, including Waitrose, really has a strong standard offering to serve this location.
The winner in Hove is, therefore, likely to be the player who works the hardest to tailor their offers and service to the specific needs of the local community.
The local independent retailers featured in The Grocer article are closer to the local community and may be better placed to adapt to their needs.
Perhaps this is why they feel that they may not be adversely affected by a retail ‘juggernaut’ like Tesco.
However, CACI believes that the major grocery multiples may have a rather different view when the 37,000 sq ft store comes to the heart of this busy south-coast residential and retail area.
Waitrose and Sainsbury, for example, could feel a squeeze to the tune of a combined £300,000 a week.
Once cannibalisation of the Tesco stores along the coast at Shoreham and Portslade have been accounted for, Tesco still looks set to see an impressive return from its investment.
There is a tightly constrained catchment bordered to the north by the Downs, to the south by the coast and with a very rapid cut-off to the east where shoppers prefer to remain in Brighton rather than face the congested drive to Hove.
However, the high population density and the relatively weak local multiple offer means that Tesco should see the store returning sales densities just inside the top half of its estate and a turnover well inside the top 25%.
Waitrose is likely to feel the brunt of the new Tesco. However, an analysis of the catchment profile (graph below) shows the local customers of Hove have a stronger affinity to Waitrose than any of the main grocery fascias.
The core Tesco profile has a very poor fit to the Hove catchment, which has a unique profile, polarised between trendy metropolitan types and prosperous retirees.
With Waitrose customers being renowned for their loyalty, it may hold onto considerably more of its customers than would normally be expected and Tesco might have to fight harder to gain market share than it may have first thought. None of the key multiples operating in the local area, including Waitrose, really has a strong standard offering to serve this location.
The winner in Hove is, therefore, likely to be the player who works the hardest to tailor their offers and service to the specific needs of the local community.
The local independent retailers featured in The Grocer article are closer to the local community and may be better placed to adapt to their needs.
Perhaps this is why they feel that they may not be adversely affected by a retail ‘juggernaut’ like Tesco.
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