Independent retailers are upbeat about their prospects for 2008.

Despite fierce competition from the multiples, soaring energy costs and increased legislation, 80% of retailers polled by The Grocer say they expect to grow profit margins this year.

To do so, however, independent retailers say they will have to beat the multiples at their own game by cashing in on the growing demand for fresh and local foods.

"We plan to grow our profit margin by developing the fresh food categories, which are proving increasingly popular," says one retailer.

"We're going to focus on increasing our fresh food ranges, especially in food to go," adds another.

With environmental concerns, food miles and food provenance high on the consumer agenda, 70% of retailers say they intend to sell more local food this year. "We realise that the market is going down the local route, so going local should help us grow fresh foods faster," says one.

Another adds: "Local food and drink takes up an increasing proportion of our range and we have already developed strong trading links with local food producers. This will continue."

This is not a particularly new approach for small shops, however, says another retailer. "We have supported local products for the past 15 years," he claims. "It's not a new phenomenon as the supermarkets and national newspapers seem to be implying."

The burgeoning non-food sector is another area that independent retailers are scrutinising, with 60% of store owners saying they will sell more non-food this year. "It is a growing area and one that we continue to look at very closely," says one player.

Yet not all are convinced about the role non-food plays within smaller retailers. "There is limited scope for non-food in the independent sector," says one retailer. "We would rather continue to grow our fresh food offer, which I think we are getting much better at."

And, despite claims that the multiples are pushing them out of the property market and that it has become more difficult to find suitable sites for new stores, every independent retailer plans to open more stores in 2008.