nickshanagher

The internet will change the way that you operate your local shop and there is little to be gained from fighting this. A requirement for UK retailers to make their sales tax returns on line has resulted in complaints from some that they want to stay in a paper-based world. This is a mistake for any business-owner, surely. The internet and information technology is shaping the competitive world in thousands of ways. For example, Waitrose is using IT so that it can sell its products through outlets owned by chemist chain Boots and petrol retailer Shell - the latter through self-service kiosks. Waitrose has a £40 million IT budget and it is one of the smallest UK multiples. Derbyshire independent retailer Stuart Reddish told members of the Newsagents' Federation at its national council meeting in Newcastle last week that as a business owner you have a responsibility to pay tax in the way that society demands. Separately, he said it was crazy to be in business and not using the int...

All businesses must consider how much value to give their customers and when it ceases to become profitable. Measuring this is difficult and today's idea may make it harder or easier for you. Let me know? In business schools they teach you to do the least that you possibly can so that your profits will be as large as they possibly can. This strategy does not seem to be widely promoted for corner shops. Instead, shopkeepers find themselves being urged by suppliers to do the most that they possibly can to delight their shoppers and win extra custom. Seth Godin says in a recent blog that that the latter strategy is a "crazy alternative that seems to work: do the most you can do instead of the least. Radically overdeliver." "Turns out," he says, "That this is a cheap and effective marketing technique." Which is an interesting idea for independent retailers to consider. While big companies may exploit your willingness to overdeliver to shoppers to sel...

Local shops handle a lot of cash and need to do this well to keep shoppers happy. I stopped off to fill my scooter with petrol yesterday and after checking out the pricing of various treat foods I handed over £20 and was surprised to receive change of £10. Shaz, who served me, looked down to the till, where he had already put the note away and he was unsure. I exchanged numbers and names and said I would call back today after he had cashed up. This is the second time this has happened to me in recent years. The last time, the manager in the off licence said I was wrong but agreed to call me if she was £10 over when she cashed up. To her credit, she telephoned later that night after the cash up. Today, I arrived in the garage unsure what to expect. The sales assistant asked me to repeat my story twice and then said that I was wrong. She said she had been present last night at the cash up and the till roll balanced. I urged her to call her manager, thinking second time round and n...

Local shops can make high impact promotions work for them with the application of a little thought - and sticky tape. My thanks to Andy Singh for following up my comments last week with this photograph showing a new promotion he is running. Through his wholesaler, Andy bought into a buy a Pepsi and a Wispa Gold for £1 deal. He took some time to tape the chocolate bars to the cola drink with the aim of making the promotion as simple as possible for his shoppers. "It is flying out with the teenagers," he told me today when I asked him how the promotion was going. From a question I asked him last week, Andy decided that he needed to check whether shoppers could easily understand the promotions he was running. The easier he makes it for them to buy, the more they will buy.

For corner shopkeepers there are some signs that the major grocers are having a tough time in growing their share of the grocery market. While this does not mean that the pressure on your business will lessen, it does suggest that if you focus on your local market you will be able to combat the pressure. "It only took 48 years," was the FT's pithy comment on Walmart's first ever quarterly sales decline. Its UK arm, Asda, had a poor final quarter of the year, blaming snow which discouraged people from driving to its superstores. Asda's response will be to renew its focus on every day low pricing (EDLP) to, in the words of chief executive Andy Bond, "save our customers money on every basket each time they spend". Last year, Mr Bond suggests shoppers were hoodwinked by its competitors with their high-low pricing strategies. In an online briefing he illustrated this by using a chart showing the price of a tube of Pringles in Asda, Sainsbury, Tesco and Mor...

If you set up the promotion, shoppers will buy it. Andy Singh invited me to visit his family shop in Sunnyside, near Gateshead, and I spent an enjoyable hour with him talking about business yesterday. We were consistently interupted by shoppers popping in to top-up, which was great! When I arrived, Andy pointed me to the space in front of his till where he had put pancake mix, honey, Nutella, and golden syrup. Pancake day, he said. I was surprised but within minutes the first shopper arrives in store asking if he has pancake mix. Just here, he said. Great said the shopper, adding a tin of golden syrup and buying a big bar of chocolate on promotion as Andy had run out of chocolate sauce. Remarkably, more shoppers came in to buy materials to make pancakes and Andy was able to send them all home happy. Andy, with his dad, runs a great shop. He is on first name terms with most of the shoppers. Everything is well merchandised and clearly priced. By having a strong and trusted relat...

True in part to my New Year resolution, I held a business meeting in an independent coffee shop today just next door to a Starbucks. The cafe was presented well and four staff were busy preparing for the lunchtime rush, at 11am. As my guests were late, I had a half hour overview of footfall on the street outside and in the restaurant. Six customers. Barely enough to form the queue in Starbucks or Pret-a-Manger just down the road. Plus one Italian girl who dropped off her CV. Some people stopped to look at the posters in the window and moved on. The owners seemed quite happy. When I left just after 1215, they were doing brisk trade. However, I have the impression that the business is not working hard enough. It could easily have managed 120 customers between 11 and 12, instead of 12. This is lost profit as the fixed overheads and staff costs are already in place. The owners are clearly busy - perhaps too busy to take time to look at the potential that their cafe has. What shou...

Home workers of the future may be lonely and may need good local shops to provide them with a daily lift. The Financial Times weekend runs an excellent series of lunchtime interviews with the shapers of the modern world and a recent one featured Lynda Gratton of the London Business School. As she is completing a book on the future of work she suggested the interviewer Stefan Stern should join her at home because she wanted to show that alternatives are possible. Lunch was a takeaway from a local grocer, Melrose & Morgan. Aubergine dip at £4.95, lentil salad at £2.95, white bean salad at £3.50, roast vegetable medley at £8.25, fish pie (small) at £5.95, chicken & mushroom pie (small) at £5.95, baguette at £2, sheep's cheese at £3.74, charcoal crackers at £2.75, sticky toffee pudding at £4.95 and a bottle of wine at £8.95. Total bill £53.94 for two people. If this is the future of home working, then local shops near knowledge workers are going to have a good future if they...

Shopkeepers should make a note to regularly visit the supermarket dotcom stores and check prices. Supermarket groups raise and lower so many prices that shoppers are left confused, analysis by The Guardian last week suggests. Former competition watchdog head John Bridgeman claimed this could add £15 to a £100 shopping basket. The stores studied said most of the increases were because promotions came to an end. For local shops, it is the sheer scale of price volatility that will be the major challenge. The study, for a three week period ending 22 December, saw Tesco increase prices on more than 1,500 shop keeping units (SKUs) and lower them on more than 2,600. At Asda, 2,000 went up. (A separate study by Paul Dobson of Loughborough University has found the most common price cut is 1p.) The newspaper notes that Asda increased the price of four Duracell AA batteries by 103% to £2.98, up from £1.47. Local shops would find it difficult to buy this pack for much under £2 and are being ...

Most shopper transactions for local shops are under £10, which may be a good thing if the rise of on-line grocery shopping continues. But don't bet on it. In a presentation last November, Laura Wade-Gery of Tesco.com, explained the advantages that has made it the UK's largest on-line retailer, with sales of £1.9billion and profits of £109m in 2008-09. While only 3% of the grocery market is currently on-line, 6.7% of Tesco's grocery sales are through the internet. Using 309 stores nationwide, Tesco.com covers 99% of the UK, which means your home is within a 25 minute drive of their local distribution system. Tesco.com is now so successful it is having to build dotcom only stores to meet demand. Shoppers come to Tesco.com because they know the brand but they stay if it is good at order fulfilment, quality and freshness and on-time delivery. Ms Wade-Gery promises that Tesco.com will continue to innovate, with ideas including: predictive ordering (where it remembers what you...

There are two lessons for local shops from this tale of lottery balloons. Last week in the corner shop across the street a big poster appeared in the window announcing an £89 million mega draw in the lottery. Inside the shop, the Camelot stand was decked in blue and white balloons and looked festive and happy. This week, with the draw up to £111 million on Friday, and the balloons had gone. Today a new poster was back up with the bigger draw announced. "Where are the balloons," I asked. "Why did you take them down?" The assistant told me that a courier had brought the point-of-sale pack the previous week and they had put the balloons up as requested. The pack for this week was still to arrive. The lessons are: 1. Point-of-sale works. Last week the shop looked really happy and I was prompted to buy a lottery ticket. I did not expect to win. It was a brief fun flirtation with the opportunity of winning. The shop was a brighter and happier place to be in. 2. Som...

Local shops should be benchmarking their sales performance against a 2% rise in shoppers' spending, analysis of recent data suggests. There has been no recession for shoppers, who have spent more in 10 of the last 12 months according to UK government statistics. So what are shoppers doing? Perhaps cutting back on eating out, which means they are buying more treats from local shops! The average UK household spends £396 a week, which breaks down into £63 for transport; £60 for recreation; £53 for housing; £51 for food; £38 for eating out; £22 for clothing; £11 for alcoholic drinks, tobacco and narcotics (the government's words!); and £99 for other. If incomes are falling, perhaps transport and recreation will take the hit first. Tesco is upbeat and Sainsburys is downbeat. If you want to be successful, you should be planning for at least 2% growth.

Last week's announcement by Wal-Mart that it had set up a partnership with Li & Fung is big news. Perhaps not for UK corner shops today. But read on and think how this deal could make Asda stronger over the next five years. Li & Fung started out as a company that sourced products in China for wholesalers and distributors. It then moved into distribution and beyond. For example, today it runs shops in south east Asia for brands like Calvin Klein and Gant. It provides marketing, logistics and manufacturing services. "As we do not own any brands, we devote all our resources and efforts to supporting our clients," it says on its website. Now Wal-Mart seems to agree, saying that it will save between $4bn to $12bn on purchasing over the next five years. That is a lot of extra profit...or support to shoppers in the form of lower prices. The challenge is for UK wholesale suppliers of corner shops to come up with something similar. Local retailers need to pay attenti...

In my business we have strategies to acquire and keep customers, as proposed by Peter Drucker. We have a group of customers that we believe are fans who tell other customers about the things that we do well and who give us great feedback. We have many loyal customers who buy our weekly magazine, respond to our advertisers announcements and to our campaigns, and who use our products and services to promote what they do. And we have targets, potential customers who we think will benefit from using our products but who currently do not. Using this simple segmentation model, we organise ourselves so that we deliver better content, so that we understand who we are writing for, and we plan marketing to explain the benefits that our products provide. We invest time in researching what our readers say they want (attitude) and what information and news they actually use (behaviour) and we design our products to maximise the benefit to them. This may be a model that shop owners could use for t...