Can small shops survive a multiple moving in? Fiona McLelland finds out
When Tesco rolls into town, you might as well shut up shop if you’re a retailer in the vicinity, right? Not necessarily. It is two years since Tesco announced that its first standalone Express was to open in Southborough, near Tunbridge Wells, sparking a wave of opposition from the local community. But has the impact on retailers been as bad as feared?
The Grocer paid a visit to the Southborough store to see how it has fared.
Tesco, which first launched the Express format as a forecourt adjunct in 1994, says the Southborough store has had a positive impact on both shoppers and local traders because of the increased footfall generated.
Southborough Express store manager Paul Mendes says: “Because of its size, the Express format trades naturally alongside other small retailers in the area. Express stores boost local trade and encourage more people to stay and shop in the area. More competition and choice can only bring advantages to a neighbourhood. Our research has shown that 34% of our customers regularly go on to use other shops in the vicinity.”
Among the local traders, however, the verdict is decidedly mixed (see right).
The local florist and pet shop reported no detrimental effects on sales and both believe their specialised service protects their future. However, Stuart Knight, co-proprietor of Southborough Butchers, says his records show a drop of 100 customers per week. He was forced to seek trade elsewhere but says his new emphasis on wholesale has actually improved business.
Others clearly found it impossible to adjust. Premier Best Buys, a small grocer across from Tesco, now lies empty. This is a direct result of the Express competition, claim other retailers in the area.
Judging by the healthy number of people in the Tesco store when we visited, it has been a hit with shoppers. Several of those we spoke to who had previously been loyal to other supermarkets said they now shopped at the Express either for their main or top up shop. Thanks to the small car park in front of the store, it is also attracting a fair amount of passing trade. But for one resident living close to the store, Tesco’s arrival has not been welcome.
Jan Smith refuses to shop in the Express and says that it’s a shame that the independent store had to close.
“I live behind Tesco and my neighbours were forced to sell up and lost £40,000 on their house because they were so desperate to escape the noise,” she says. “We’re trying to get out too because cages crash at all times of the day, starting really early in the morning. It’s not fair that a large supermarket can come in and operate as a small shop.”
Unfortunately for Smith, the OFT doesn’t see it the same way. Its insistence that one-stop supermarket shopping and c-store shopping are distinct entities has allowed Tesco to expand rapidly into convenience by taking over 862 T& S stores and, more recently, 45 stores owned by Adminstore. Southborough may have been the first standalone, but it wasn’t the last. Tesco currently operates a total of 347 Express stores across the UK, comprising 247 standalones, T& S conversions, and Tesco/Esso alliances. And the rollout continues. The latest Express opened last week and a further 12 standalones are planned before the year is out.
Judging by the experience of traders in Southborough, Tesco Express will have an impact on small retailers in the locality, but this need not be fatal. Janine Frankie from the town’s Pet Fayre store says: “There’s obviously been an effect and profits have got a bit tighter, but now that most of us have made it through so far, I think we’ll survive.
“Some small traders will always lose out when an Express moves in, especially small grocers, but we can be specialised and get the sales not open to supermarkets. Let’s face it, the supermarkets have been clever to get so big. We have to be clever too.”
We asked local shoppers how the store has changed their shopping habits and discovered that the Tesco formula was a hit with all… except one.
Joanna Leroni from Southborough: “I never used the local shops before Tesco Express opened. I would have made sure I did all of my shopping in one go at Waitrose, but now I pop in here all the time. I am still not encouraged to use the other local shops, though.”
Ann Saunders from Silverdale: “My shopping habits haven’t changed that much, although Tesco Express is more convenient. I can park here and so don’t always have to go into Tunbridge Wells for my shopping. I didn’t use the local shops here before, but now, if I’m after something special, I might pop over the road to use one of them.”
Alan Rigg from Southborough:
“I go to the Sweet Centre grocers on London Road for my vegetables because they are fresh and come from a local farm. I use Southborough Butchers because they are excellent, and then I’ll come into Tesco for things like pork pies. I’ll go to Sainsbury on a Sunday for the bigger range but I will continue to use the local shops.”
Jan Smith from Southborough: “We refuse to shop at Tesco on principle. We live behind the store and were against it opening. Some people think Tesco is wonderful because it’s open until 11pm but we have the noise.
“I think it’s wrong that Tesco can come in and trade as a small shop with the low prices of a big supermarket. There are no trading restrictions so the small shops are not protected.”
We also visited some of the shops within about half a mile of the Tesco Express to find out if they have been adversely affected by the store opening - or have benefited from increased footfall.
Southborough Butchers has been trading since 1870. The current owners have run the business for five years.
Stuart Knight, co-proprietor, says: “We have been affected by the opening of Tesco Express. We are down 100 customers a week so have been forced to up our contract work. Pubs and hotels were a very small percentage of our trade and we relied very much on the local community.
“Now 60% to 70% of our business is contracts and I believe we are stronger now as a company.
“When Tesco came along we invested £30,000 in new refrigeration and equipment so that we could go into wholesale. It was a gamble but it has worked out well for us.
“We are confident, one way or another, that we can trade for another 10 to 15 years. After that I think the butchers will finally be gone.
“That’s not because of Tesco Express, though. It’s because no lads are coming in to get trained up. It makes me sad but it’s the way all local trades are going.”
Poppy’s Florist has been trading here for 11 years.
Says owner Annette Sparshott: “I haven’t seen much of a difference to my business. We have regular customers and they’ve all stayed with us. We use the Express all the time and have seen customers buying flowers, although I don’t recognise their faces. I’m sure people will continue to buy flowers at Tesco, but at least we have a trade and we also do arranging, rather than just selling bunches of flowers.”
Pet Fayre, the local pet shop,has been trading for 30 years, and as Pet Fayre for 11 years.
Says sales assistant Janine Frankie: “We’ve not been affected in this shop at all. We better Tesco on price on a few things and tend to do products that supermarkets don’t stock. We were worried about trade when we heard Tesco was to open but we made a conscious effort to make sure that we had enough of a differential.”
Costcutter opened in June 2003, taking over from Southborough Stores.
Costcutter manager Paula Loveridge says: “I think Tesco had a bit of an impact on Southborough Stores, but the owners were already looking to move into the newsagency business before the Express store opened.
“We are achieving our goals but are looking at ways to bring in more customers. We have applied for the Lottery and are the only ones in the area to do PayPoint, which brings in a lot of customers.
“Obviously if Tesco wasn’t there we would get more, but there seems to be enough trade for both of us. One independent store did have to close.”
Vox pop: The shoppers’ view
Boom or Bust: London Road, Southborough, near Tunbridge Wells
When Tesco rolls into town, you might as well shut up shop if you’re a retailer in the vicinity, right? Not necessarily. It is two years since Tesco announced that its first standalone Express was to open in Southborough, near Tunbridge Wells, sparking a wave of opposition from the local community. But has the impact on retailers been as bad as feared?
The Grocer paid a visit to the Southborough store to see how it has fared.
Tesco, which first launched the Express format as a forecourt adjunct in 1994, says the Southborough store has had a positive impact on both shoppers and local traders because of the increased footfall generated.
Southborough Express store manager Paul Mendes says: “Because of its size, the Express format trades naturally alongside other small retailers in the area. Express stores boost local trade and encourage more people to stay and shop in the area. More competition and choice can only bring advantages to a neighbourhood. Our research has shown that 34% of our customers regularly go on to use other shops in the vicinity.”
Among the local traders, however, the verdict is decidedly mixed (see right).
The local florist and pet shop reported no detrimental effects on sales and both believe their specialised service protects their future. However, Stuart Knight, co-proprietor of Southborough Butchers, says his records show a drop of 100 customers per week. He was forced to seek trade elsewhere but says his new emphasis on wholesale has actually improved business.
Others clearly found it impossible to adjust. Premier Best Buys, a small grocer across from Tesco, now lies empty. This is a direct result of the Express competition, claim other retailers in the area.
Judging by the healthy number of people in the Tesco store when we visited, it has been a hit with shoppers. Several of those we spoke to who had previously been loyal to other supermarkets said they now shopped at the Express either for their main or top up shop. Thanks to the small car park in front of the store, it is also attracting a fair amount of passing trade. But for one resident living close to the store, Tesco’s arrival has not been welcome.
Jan Smith refuses to shop in the Express and says that it’s a shame that the independent store had to close.
“I live behind Tesco and my neighbours were forced to sell up and lost £40,000 on their house because they were so desperate to escape the noise,” she says. “We’re trying to get out too because cages crash at all times of the day, starting really early in the morning. It’s not fair that a large supermarket can come in and operate as a small shop.”
Unfortunately for Smith, the OFT doesn’t see it the same way. Its insistence that one-stop supermarket shopping and c-store shopping are distinct entities has allowed Tesco to expand rapidly into convenience by taking over 862 T& S stores and, more recently, 45 stores owned by Adminstore. Southborough may have been the first standalone, but it wasn’t the last. Tesco currently operates a total of 347 Express stores across the UK, comprising 247 standalones, T& S conversions, and Tesco/Esso alliances. And the rollout continues. The latest Express opened last week and a further 12 standalones are planned before the year is out.
Judging by the experience of traders in Southborough, Tesco Express will have an impact on small retailers in the locality, but this need not be fatal. Janine Frankie from the town’s Pet Fayre store says: “There’s obviously been an effect and profits have got a bit tighter, but now that most of us have made it through so far, I think we’ll survive.
“Some small traders will always lose out when an Express moves in, especially small grocers, but we can be specialised and get the sales not open to supermarkets. Let’s face it, the supermarkets have been clever to get so big. We have to be clever too.”
We asked local shoppers how the store has changed their shopping habits and discovered that the Tesco formula was a hit with all… except one.
Joanna Leroni from Southborough: “I never used the local shops before Tesco Express opened. I would have made sure I did all of my shopping in one go at Waitrose, but now I pop in here all the time. I am still not encouraged to use the other local shops, though.”
Ann Saunders from Silverdale: “My shopping habits haven’t changed that much, although Tesco Express is more convenient. I can park here and so don’t always have to go into Tunbridge Wells for my shopping. I didn’t use the local shops here before, but now, if I’m after something special, I might pop over the road to use one of them.”
Alan Rigg from Southborough:
“I go to the Sweet Centre grocers on London Road for my vegetables because they are fresh and come from a local farm. I use Southborough Butchers because they are excellent, and then I’ll come into Tesco for things like pork pies. I’ll go to Sainsbury on a Sunday for the bigger range but I will continue to use the local shops.”
Jan Smith from Southborough: “We refuse to shop at Tesco on principle. We live behind the store and were against it opening. Some people think Tesco is wonderful because it’s open until 11pm but we have the noise.
“I think it’s wrong that Tesco can come in and trade as a small shop with the low prices of a big supermarket. There are no trading restrictions so the small shops are not protected.”
We also visited some of the shops within about half a mile of the Tesco Express to find out if they have been adversely affected by the store opening - or have benefited from increased footfall.
Southborough Butchers has been trading since 1870. The current owners have run the business for five years.
Stuart Knight, co-proprietor, says: “We have been affected by the opening of Tesco Express. We are down 100 customers a week so have been forced to up our contract work. Pubs and hotels were a very small percentage of our trade and we relied very much on the local community.
“Now 60% to 70% of our business is contracts and I believe we are stronger now as a company.
“When Tesco came along we invested £30,000 in new refrigeration and equipment so that we could go into wholesale. It was a gamble but it has worked out well for us.
“We are confident, one way or another, that we can trade for another 10 to 15 years. After that I think the butchers will finally be gone.
“That’s not because of Tesco Express, though. It’s because no lads are coming in to get trained up. It makes me sad but it’s the way all local trades are going.”
Poppy’s Florist has been trading here for 11 years.
Says owner Annette Sparshott: “I haven’t seen much of a difference to my business. We have regular customers and they’ve all stayed with us. We use the Express all the time and have seen customers buying flowers, although I don’t recognise their faces. I’m sure people will continue to buy flowers at Tesco, but at least we have a trade and we also do arranging, rather than just selling bunches of flowers.”
Pet Fayre, the local pet shop,has been trading for 30 years, and as Pet Fayre for 11 years.
Says sales assistant Janine Frankie: “We’ve not been affected in this shop at all. We better Tesco on price on a few things and tend to do products that supermarkets don’t stock. We were worried about trade when we heard Tesco was to open but we made a conscious effort to make sure that we had enough of a differential.”
Costcutter opened in June 2003, taking over from Southborough Stores.
Costcutter manager Paula Loveridge says: “I think Tesco had a bit of an impact on Southborough Stores, but the owners were already looking to move into the newsagency business before the Express store opened.
“We are achieving our goals but are looking at ways to bring in more customers. We have applied for the Lottery and are the only ones in the area to do PayPoint, which brings in a lot of customers.
“Obviously if Tesco wasn’t there we would get more, but there seems to be enough trade for both of us. One independent store did have to close.”
Vox pop: The shoppers’ view
Boom or Bust: London Road, Southborough, near Tunbridge Wells
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