Small, unaffiliated independent stores will continue to go to the wall unless they can improve their retailing skills and find new ways of attracting and retaining a local customer base, the head of the Association of Convenience Stores (ACS) has warned.
Independents tend to stock too many items that don’t sell and far too many stores have failed to adapt to trends, such as demand for healthier foods, said ACS chief executive James Lowman last week.
Regarding the move towards consumption of healthier foods, Lowman told the meeting of the Chartered Institute of Marketing’s Food, Drink and Agriculture Group: “Our market has not been quick enough to adapt to that. In terms of customers, this is one of the most significant things a retailer can do.”
Supermarkets muscle in
The expansion of the multiples into the convenience sector had highlighted the deficiencies of many traditional family stores, he noted. However, they would never be able to compete on price alone where supermarkets could bring economies of scale to bear. “The ombudsman may iron out some of the excesses of supermarket buying power.” But more needed to be done by the independents themselves, he added: “We have to change our mindset.”
The ACS is a lobbying group that represents around 33,500 local shops in the increasingly important convenience store market, although the major multiples are excluded from membership. Its membership also represents just 60% of the total UK convenience store market, said Lowman.
Around 24% of ACS’s members comprise non-affiliated independents, but the number is falling, said Lowman. Symbol groups make up the lion’s share (36%), 15% are convenience multiples, 14% forecourts and 11% co-ops.
Convenience market grows
The UK’s convenience market is growing at about 6.1% a year - faster than the rest of the grocery sector - and is now worth around £1.9bn, he reported.
“The people who do best in the sector are those who do what shoppers want,” said Lowman. Contrary to major multiples’ claims that price is top of the list of their consumers’ priorities, those shopping in convenience stores put product availability at the top (46%), claimed Lowman, followed by staff friendliness (33%), value for money (33%) and speed of service (26%).