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Showing posts from May, 2011

Independents still outperform in convenience sales

Some back of a fag packet analysis of the IGD's latest sales figures suggest that the average symbol group shop operating in the UK will turnover £14,862 a week this year, up 6 per cent. For the average non-affiliated independent shop the turnover is expected to rise 2 per cent to £6,454. Combining the two estimates gives you a proxy for the average independent local store of £10,213, up 5.9 per cent. The IGD estimates show that both forecourts and co-operative outlets are losing market share in the £32.4 billion market. While multiples are increasing share by 8.1 per cent, symbol groups still top the chart with 9.2 per cent growth. The independent sector grew sales by £953 million - in cash terms two-and-a-half times more than the c-stores owned by multiple grocers.

The symbol group race - who is counting

It is a tricky business to keep on top of what the numbers of stores belonging to each symbol group mean. At one level, it could mean that head offices are able to negotiate better deals because they have more shops taking part in promotions. At another, it could mean that more local retailers are choosing one group over another as it is delivering more to their bottom lines. It could be fashion. It could be an exercise in badging for vanity. However, now that the IGD has updated its annual figures, Booker's Premier symbol group has overtaken Spar UK to top the chart with a 15.9 per cent of outlet numbers versus 15.7 per cent. Bestway takes third spot with a Best-one/Best-in share of 13.8 per cent, followed by Lifestyle from Landmark at 12.9 per cent. Londis has dropped to an 11.0 per cent share and Costcutter to a 9.5 per cent share. Mace has grown to a 5.3 per cent share and Nisa to a 4.8 per cent share. Overall, there are 16,288 symbol group stores, up 2.9 per cent on the

Let's not talk down the independent retailer

The Institute of Grocery Distribution collaborates with William Reed, the publisher of the Grocer, to count how many shops there are in the UK grocery channel each year. It is an excellent project hampered by a consistent bias against the independent retailer. This year's figures, exclusively published through the Grocer last week, show that the numbers of independent shops in the convenience channel dropped from 35,620 to 35,430 last year, a fall of 0.5 per cent. Within their number, the number of independent shops that chose to be part of a symbol group rose by 3.6 per cent to 15,287 and the number of unaffiliated shops fell by 3.4 per cent to 20,143. The Grocer chooses to describe this as "terminal decline" and says the multiples' growth comes at "the expense of the independents". Of course, writing a couple of hundred words to summarise a market of just under 42,000 outlets means trends have to be sketched with a broad brush. Unfortunately, this us

Booker is the bellwether for the go ahead retailer

A short item on the Sun's City pages notes that high street sales were up in April by the highest number for that month in nine years* and linked the good news story with Booker's results. Wholesaler Booker is a good bellwether for the go ahead independent shopkeeper who is investing in their business. Booker, the Sun reported, said that customers were shopping locally and the paper reported that its Premier store chain had achieved a 10 per cent rise in sales. Wow! The Sun's paragraph may skew the facts but it is a great warm story about the success of local independent shops. Over in the FT, comment on Booker was missing. However, this does not mean the company is lacking fans. Analyst Dave McCarthy of Evolution Securities says it has world class management and is investing sensibly in development. While some of the upside comes from India and foodservice, it is also doing a great job of serving local shops. The secrets of Booker's success are not secret. They m

Watching the pennies

Fiona Dawson, president of Mars Chocolate in the UK, says that local shops need to get behind the big brands in their confectionery displays and support countlines as affordable treats. The price of treats cannot go up and up and up, she says. However, as retailers know, the rise of promotions means that shoppers are flip-flopping from brand to brand in search of the better deal. This poses some big problems for confectionery sales. So it cannot help when shoppers at Reading station are faced with variable pricing for Snickers bars on platforms 4 and 5. At the shop called WHSmith on platform 4 a Snickers Duo costs £1.05. At the WHSmith on 5, it costs 99p or two for £1.50. The secret? The WHSmith on platform four is operated by SSP, the Euston based "food travel experts". The one on platform five is operated by WHSmith itself. A problem for the retailer's brand more than for Mars? However, a real challenge for the countline snack people may be coming from a differe

No new tricks behind Poundland success story

Jim McCarthy, the man who developed T&S Stores into a chain that once sold to Tesco gave the UK's biggest supermarket a huge lead in the convenience channel, is now heading Poundland, which provides a whole new set of challenges for local shops. How does the magic work? "What we look for is the cash gross margin," Mr McCarthy tells the FT. "It's all about volumes, not percentages." Gold products are those with high margins and high volumes, such as fizzy soft drinks. Bronze products are those with very low margins but very high volumes, such as Maltesers. Most of the products they sell are neither leftovers or short dated, Mr McCarthy says. It is simply about trading off volume and price. In five years he says only three SKUs have been loss leaders, of which the most recent were Christmas selection boxes. What they are good at is selling well known products in different pack sizes to achieve the £1 price point. A 600g loaf costs £1. The 800g loaf

Will the McJob make way for robots?

A McJob is better for you than a degree, the UK boss of McDonald's told the newspapers last week, shortly before her boss in Europe unveiled plans to introduce robot cashiers in many of its 7,000 European restaurants. Clearly, armed with a ranking in the Sunday Times's 25 Best Places to Work listing, McDonalds has many strengths. It is also benefiting from rising sales as people with less money in their wallets trade down to cheaper eating out experiences. However, the move to asking diners to order at touchscreen terminals may open an opportunity for local shops interested in food to go. While the company says it will save three to four seconds for each customer served at a touchscreen ordering point - and with millions of customers that probably adds up to some big cash number - I reckon consumers are going to weary of having to do everything for themselves. As with the robots at supermarket c-store checkouts, there are times when it is a good option for busy people. Bu

How to use a headline grabbing claim

After a nasty street riot in Bristol, Ed Miliband decided a nice "Enough Tescos" soundbite would get him a little coverage in the national media. "Local people should have more say over what happens on their high streets," he said, promising a policy review. He knows that some people fear that all high streets look the same. On the other hand, Tesco has not achieved a 30 per cent market share by enslaving people. Shoppers generally vote with their feet and choose to shop at Tesco. However, at the same time the FT dusted down and published a report from the Institute of Government that showed that academics rate the minimum wage as the most successful policy introduced by government in the past 30 years. The smoking ban comes 10th on the list, behind devolution, privatisation and the Northern Irish peace process. And just ahead of free museum entry and free bus passes. What are the strengths of the minimum wage? A low starting level and because it makes it ease

The convenience battle field

 The new Little Waitrose in Shrewsbury  The John Lewis Partnership has parked this Little Waitrose convenience store, which opened last Thursday, just across the road from Marks & Spencer in the centre of Shrewsbury. On the one hand, this shows that the big retailers in town centres are thinking about competing head-to-head and they assume that their competitors have sites with the best footfall. This may be helpful for independent retailers as they are left unscathed in areas where footfall does not meet the multiples' requirement. On the other, it shows that the big retailers are deadly serious about competing for a bigger stake of the convenience market. Their intent grows. Justin King, head of Sainsbury, has announced that he will take responsibility for its convenience business, which will be one of the areas where it will grow strongly in the future. Mr King told the City last week that consumers were "managing their household budgets wisely and well" an

Electoral opportunities

It was interesting to see that Fiona McLeod of the SNP has taken the Strathkelvin & Bearsden seat from David Whitton of Labour. Mr Whitton, when I met him at the NFRN Scottish conference two months ago, was an MSP who was not expecting defeat. He was also a well briefed politician - well briefed by the supermarkets - and he bought into their idea that they were good for jobs. The facts are that an extra 2.7 million square feet of selling space created by Tesco and Sainsbury in the past year was matched by a reduction of 426 in the number of people they employed, ACS research has uncovered. Perhaps there is an opportunity for local retailers in Ms McLeod's constituency to contact her and provide her with the compelling story about the good job that local shops are doing for her local people and the local economy. Similarly, there should be retailers in other parts of Scotland, Wales, Northern Ireland and, to a lesser extent, England who have a message for local elected po