Big four should hit discounters with c-stores

By Laurence Gibbons

- Last updated on GMT

More convenience stores could help the big four fight off competition from the discounters
More convenience stores could help the big four fight off competition from the discounters

Related tags Asda Morrisons Wal-mart

The big four retailers should launch more convenience stores on the doorstep of their rival discounters to fight the competition, according to a leading professor from Aston Business School.

Professor Heiner Evanschitzky said Tesco, Asda, Sainsbury and Morrisons needed to update their business models to beat the competition and avoid being overtaken by the discounters.

“Supermarkets need to strategically locate their smaller stores close to customers and – perhaps paradoxically – close to their competitors,”​ he said.

Treats after cheaper shop

“The big four should for instance look at opening smaller stores next to Aldi supermarkets, focusing on a complementary range of products that consumers will buy as ‘treats’ after their cheaper discount shop.”

Tesco and Sainsbury led the way in opening these smaller stores, but now others are beginning to follow suit, Evanschitzky added.

“The big four are rightly focused on smaller stores to match Britain’s changing shopping habits. The days of the weekly shop are long gone – nowadays we are more likely to grab what we need, when we need it, often from smaller, convenience-style stores.”

Retailers should target retail innovation in regions such as Asia and not focus on the supermarket price war, he claimed.

“This type of customer-focused, tech-savvy innovation is what the big four should be focusing on – not the price war that simply confuses and irritates consumers and suppliers,” ​he said.

“In South Korea, ‘virtual shelves’ projected onto train station walls, allow shoppers to simply click on the products they want with their phone, and by the time they are home, their shopping is there.”

Out of date

Earlier this week, Waitrose boss Mark Price claimed the big four were years out of date, according to media reports.

“People are buying food for now,”​ he said. “The notion that you are going to go and push a trolley around for the week is a thing of the past. It is fundamentally changing the market.”

Meanwhile, Tesco admitted overstating first half profits by £263M and posted pre-tax profits more than 90% down​, yesterday (October 23).

The troubled retailer’s chairman Richard Broadbent will quit the business​ to reflect the principle of accountability on behalf of the board for the firm’s troubles.

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