We know that three to five independent retailers go out of business every day. We also know standards are rising (with more supermarkets and established grocers entering the sector) meaning independents almost have “to run to stand still”. It therefore comes as no surprise that many retailers (18%) have considered selling their business in the last 12 months.
Only half of these have actually done anything to progress a potential sale, but nevertheless it highlights a significant desire to “get out” on the part of many retailers. Also the ambitious acquisition strategies of many chains is pushing up the price of retail businesses, making it even more attractive for independent retailers to sell their stores.
Despite this, 37% of retailers remain confident that their business could survive should Tesco open an Express store next to theirs (a further 15% don’t know).
To directly compete head-on with the major multiples is tough for any retailer, that’s why independent retailers need to “be a little different, a little special”. But when we asked whether independent retailers were offering something special – were they sourcing locally grown/produced products, were they developing their fresh offers sufficiently, did they offer a point of difference? – there was a lot of room for improvement.
Only 8% of independent retailers have an in-store bakery, which is a shame as 76% of consumers believe an in-store bakery improves the overall appeal of local shops (CTP 2007). An in-store bakery also meets the growing demand for immediate consumption fresh on-the-go snacking. We know that consumers leave home 10 times a month without eating breakfast.
Only 16% offer coffee-to-go. Again independents are missing out on high margin products which also increase the sales of associated lines such as newspapers and snacks.
ATMs are becoming a “must-have” – but three-in-four independent retailers don’t have a cash machine. We see cash machines cropping up in estate agents and travel agents so clearly local independents are missing out on the footfall generated by them. We know 60% of shoppers using an ATM will spend some of the money withdrawn immediately, with newspapers, alcohol, milk and cigarettes the top purchases. If retailers cannot get a free ATM, we still advise them to get a surcharge ATM.
Bill payment facilities have proven to be a key footfall driver. From CTP, we know that the average shopper paying their utility bill in a convenience store will also spend pound;3.50 on other shop goods, on average. But fewer than 4-in-10 retailers offer a bill payment service.
Many retailers still do not chill beer or white wine, when we know that the majority of consumers want their beer and wine chilled as they are going to consume it within an hour of purchase. Could independents become “famous for” a premium wine or imported beers range suitable for their local market?
Half of retailers say they are involved in local community events such as charities. However, from CTP, only 22% of shoppers at independents feel their local store is actively involved in the community.
With all the hype surrounding reducing food miles and carbon footprints, independent retailers can truly be local and support local producers by stocking their products, even if it is on a commission basis. Independent retailers could offer free product tastings in conjunction with local suppliers? This creates some theatre in store and a little bit of excitement with their customers. Do wholesalers offer local products in the depot?
There are plenty of opportunities for independent retailers to grow and thrive, even in the tough climate.