How to get started
When choosing a symbol group, the first step is to weigh up your needs and the needs of your business. When RN asked retailers about the most important factors they consider when choosing a symbol group, availability, prices and promotions and strength of own-label range were the top three.
With funding and support services coming further down the list, it seems more retailers invest either from their own pocket or with the support of banks or third-party services.
Got Capital is one such provider. Retailers can receive an investment of up to £100,000 in their business in exchange for an agreed percentage of their gross sales. As soon as the payback amount is fully paid, the payment stops. “More than 80% of merchants use Got Capital’s fund for some kind of expansion,” says Got Capital marketing director Kobi Ben-Meir. “Being a part of a symbol group comes with a large responsibility to perform and invest in one’s business.
“Got Capital’s team understands the commitment made by a business owner for that purpose, and is excited to be part of the journey.”
Getting finance is a big step for retailers, so it is crucial that you get the right level of support. “Our main goal is to support a business owner in every possible way. A dedicated representative is always available to discuss and help with decision making regarding the business, not just in terms of funding,” says Ben-Meir. “Our dedicated team is experienced and seasoned, but mostly, they care about the businesses they work with.”
Thriving in a changing market
If the theme of last year was major consolidation and market uncertainty, this year is tipped to be
the one where retailers start tosee the real effects. Last November, RN reported that aside from improvements to deliveries and extensions to Booker’s own label and chilled ranges, retailers reported that there have not been many differences. However, a Booker spokesperson told RN that Booker retailers’ sales are up by 15% since the merger with Tesco.
In January, Booker’s Hemel Hempstead distribution centre took over full distribution to One Stop retailers, suggesting that the combined group is still working through changes behind the scenes to improve its service.
Elsewhere, 179 wholesalers who were part of the Today’s and Landmark buying groups formed Unitas Wholesale in a move affecting Today’s and Lifestyle Express retailers. Unitas managing director Darren Goldney promised in November that the move would benefit retailers with core ranging advice, better availability and exclusive deals.
“We need to buy better, we need greater scale and we need to allow this to cascade down to our retailers by pooling our resources and education.”
Perhaps the most obvious change symbol retailers have seen, though, is the appearance of Co-op products on their shelves. After the buyout of Nisa and distribution deal with Costcutter, retailers have benefited from sales of Co-op own-label fresh and chilled lines.
Nisa retailers have also benefited from a 3% increase in availability, according to the symbol group’s commercial director, Ayaz Alam, who says the partnership with Co-op has allowed the group to receive more data and will result in better margins for retailers in 2019.
“Why would we approach utility companies as two separate businesses when we can have discussions as one business to lower the bills?” he says.
“This also applies to fixtures, chillers and freezers. We want all these benefits to help our retail partners drive their businesses more profitably.”
With most symbol groups now affected by some form of consolidation, independent retailers are set to benefit from their supplier’s increased buying power. But retailers should also make sure that
they are able to stand out from other stores as the number of supplier options shrinks.
New opportunities for independents
Consolidation does not mean there are fewer opportunities for independent retailers, though. Smaller groups and new names are moving in on convenience to help retailers take their business to the next level. One of these new names in independent convenience is Co-op. After its link-up with Nisa and Costcutter, the chance of becoming a full Co-op franchise became a real possibility.
In RN’s recent exclusive interview with Nisa CEO Ken Towle, he revealed that three Costcutter-owned stores had converted to Co-op franchises, the most recent one in January. “We’ve got a pipeline of partners and other parties that we are processing at the moment.”
Smaller symbol groups are also developing new propositions for daring retailers. After ‘phenomenal success’ with five company-owned sites, Simply Fresh had made its Little Fresh franchise available to independents.
The stores put traditional packaged grocery brands in the firing line as Little Fresh brings food to go and vegan products to shops with an average size of 300sq ft. Ten more stores will be opened with the help of independent retailers this year.
“We’re taking away traditional groceries and produce from these CTN-format stores, and focusing more on areas such as hot food, snacks and health trends,” says Simply Fresh creative director Davinder Jheeta.
KeyStore is another challenger symbol group that is benefiting from investments in food to go. Twelve of the group’s retailers received funding from the Scottish government last year to add food
to go to their stores, increasing annual sales by 15%. KeyStore retail sales director Craig Brown told RN that 14% of the grant went to KeyStore shops.
“Food to go is a major trend and these stores received help to fund machines and counters to boost this category. For example, they bought ovens similar to those used by major chains such as Costa Coffee and Starbucks that are able to heat up sandwiches and pasties in one minute, on average,” he says.
Other buying groups are seeing opportunities in focusing on smaller chains. In January, Sugro managing director Neil Turton told RN that the group will offer more support to wholesalers in its 77-strong group that have their own fascias.
These groups include O’Reilly’s One 2 Shop business in Northern Ireland and Youings’ Nearbuy fascia.
“The huge emphasis over the next few years is helping our wholesalers improve the way they connect with retailers. We have no plans to create our own symbol group,” says Turton.
“However, there are a number of our wholesalers with their own fascias and we want to use our expertise to help areas such as merchandising, ranging and customer service.”
With so much investment and opportunity in symbol group retailing and the convenience sector, retailers should remain confident in their business and ability to negotiate the best deals for their shops.