While Tesco does benefit from an unfair market, independent retailers can fight back and prosper, according to Musgrave Budgens-Londis managing director Mike Taylor.
In several locations Tesco had opened new Express stores close to his company’s stores, he said, but in each case the feared impact had exceeded the reality.
His experience, and that of other companies such as Spar in similar circumstances, had been that good stores had held their like-for-like sales, he said.
“There is an expectation that we will be devastated – and the cards are stacked against us – but the message of hope is you can actually fight back and prosper and the more cases that happen like that the more that self belief will take hold.”
Taylor said the perception that Tesco had a massive price advantage over its c-store competitors was not true. It claimed prices in its c-stores were just 2% greater than in the rest of its estate, but surveys by MB-L suggested that most KVIs were 6-7% more expensive and only slower selling back-up lines were lower priced.
“Don’t believe the myth,” warned Taylor. “Check the figures and be wary of people trying to claim the moral high ground.”
Taylor said that while the major multiples had a reputation as the shoppers’ friend in the UK because of the perceived low prices, in Musgrave’s home market in the Irish Republic the environment was very different.
Strong lobbying by the independent sector there had helped them win the moral high ground and foster a belief that the major multiples were a negative force that could destroy consumer choice.
Taylor said he detected a change of sentiment in the media against Tesco recently and suggested consumers’ attitudes in the UK could be about to change.
The sell-off of Budgens stores to independent retailers, producing a new wave of independent stores in high streets across the country over the next two years, would help to change consumer expectations, he said, and could be a turning point for the independent sector.