What’s happening to our nation of shopkeepers?

What’s happening to our nation of shopkeepers?

A FACS Report ©

 

Just how high street retailers are struggling seems to be in the news on a daily basis, more liquidations, more job losses, rents and rates too high, online retailers winning share!  All of which has served to overshadow the revolution in the convenience market and the number of small format retailers that have been lost. 

 

There is growth in “Convenience shopping” but not it would seem in the number of outlets!  However there is change in the structure of the market meaning suppliers to the sector will have to address their trade marketing and communication strategies.

 

The 2019 Association of Convenience stores local shop report highlighted that there are 46,388 outlets barely a change from the previous year.

 

It seems a massive number until you look back at the number of newsagents, small grocers, petrol filling stations, bakers and more that have been lost.  Within living memory The National Federation of Newsagents once had a membership figure of considerably more than the 46,000 outlets; today they have just 15,000 members. As for forecourts, just 8400 outlets survive, but the vast majority are in the hands of the grocery giants or multiple retailers!

 

Its worse still for independent retailers in general as the undeniable swing to multiple retail is now dominating the sector and large grocery retailers buying into the supply chain will accelerate that growth along with their plans for franchising.

The traditional corner shop is becoming a thing of the past, they survive  because it’s their home where its likely that family members have other jobs!

 

There are of course many outstanding retailers who mostly trade under a symbol brand where obviously the range & promotions are heavily influenced by the supply chain but they operate as an independent. .

 

The 2018 local shop report claimed that multiples had a 26% share of the store numbers but this leapt up 3% to 29% in 2019, sadly that’s almost certainly understated.

 

There appears to be a real frailty in the total number of outlets, consider this:

  • Leading research & data organisation IRI (https://www.iriworldwide.com/en-GB) report that that over 20,000 stores are now controlled by less than 100 multiple retailers.
  • The forecourt numbers require closer examination as appears that commission operators may be classified along with independents
  • Franchisees are also within the independent numbers!
  • Nisa down as a symbol However the 3000 plus stores are actually owned by only 1300 retailers
  • SPAR with over 2500 stores but what about the company owned stores run by their wholesalers and multiple groups such as Euro garages & Hunts?
  • Hundreds of “mini multiples” who operate 3 stores or more across the forecourt & convenience store sector but who are hard to identify or track

 

Getting a grasps on these numbers is no easy task and it’s all too easy to miss these underlying trends.

The Coop, Morrisons and Tesco (one stop) all have plans to expand through franchising

The immediate future for this retail market and its suppliers are:

 

  • Multiples will continue to grow their store numbers
  • The grocery giants will further invade the supply chain and their influence over product range
  • Franchise will be used to secure discipline over independent outlets
  • The expansion of discounters will put further pressure on convenience and forecourt outlets pricing strategies
  • The numbers of Independent retailers will decline and those that survive will have to adopt a more disciplined approach via a symbol or franchise model.
  • The growth of central control
  • Fewer buyers and decision making points meaning trade communication will need to be more focused and sales teams restructured.

 

If you would like more detail on the structure of the forecourt & convenience store market just email kim@forecourtshop.co.uk or telephone Kim Barnard on 07768 465569 or 01604 660698. Need to revisit your strategy & communication FACS can help!  

 

Get the FACTS from FACS for a completely fresh (and refreshing) approach

Author: kimbarnard

Share This Post On