IAA 2019: Trends from the top 100 UK shops revealed
The top 100 shops in the UK have changed focus from baskets to margins in order to take advantage of shoppers visiting more often.
The Independent Achievers Academy’s (IAA) Top 100 shops report, released this week, revealed the current average basket spend was £7.47 – down 30p from 2018. However, it also showed stores are expanding their focus on high-margin categories.
Retailers who placed in this year’s list said they are using customer service to drive repeat visits. Dipak Shah, of H&R News in Camberley, Surrey, said: “Having a friendly approach increases customer loyalty and drives footfall. There are a lot of times that we order specific products when they are requested, and when the customer comes to collect it, they pick up milk or a paper at the same time.”
Vicky Onions, owner of Vicky’s Convenience Store in Bromsgrove, Worcestershire, added that identifying different customer demographic needs was part of the frequency focus. “We recognise that elderly customers need to be made to feel more welcome than those popping in before their commute,” she explained.
Of the top 100 UK shops, 41 sell craft alcohol. Ian Handley, owner of Handleys News & Convenience in Northwich, Cheshire, said he had forfeited the bigger basket spends associated with large pack sizes and standard ranging, in favour of higher margins and customer interest brought in by “keeping beers moving”.
“We rotate our range of beers around all the time. We get a 30% margin on the beers that we sell,” he said. “People like local, so we have a couple of products from our local brewery.”
GlobalData analyst and retail expert Thomas Brereton has urged independents to embrace this buying local trend to experience margin boosts. “Independents without the support of a wholesale partner should look to forge partnerships to highlight to consumers the local sourcing,” he said.
Brereton added that this was “particularly prevalent in the craft alcohol category”, but the Top 100 data showed the same approach was being applied elsewhere.
Jignesh Patel, of The Ickleford Stores in Hitchin, Hertfordshire, was one of 27 retailers offering flowers this year. He explained: “Freshly cut flowers generate 30% of my sales, and because they offer up to 50% margin, it boosts the profitability of the whole store. Being a 900sq ft shop has its difficulties, but I use my flower display outside to attract customers.”
Data collated from the top 100 UK shops shows that in another bid to raise margins, they are investing in preparing food on site, with 21 preparing sandwiches and 19 preparing hot food.
Commenting on the data, Brereton agreed that success lies in tapping into foodservice. He said that providing appealing food to go not only drives impulse sales, but also repeat business.
One emerging example was milkshakes, with eight of the top 100 now using a self-serve machine in store. Abdul Arain, of Al-Amin Stores in Cambridge, recently introduced £3 milkshakes, blended on site. “It’s all about adding value,” he said. “We always look to introduce new flavours and toppings, which sets you apart from everyone else.”
Brereton argued investments like this can help retailers compete with convenience multiples. “Food on demand remains a key driver in the convenience market, and is now branching out from refrigerated sandwiches and salads to encompass hot food, coffee machines and other food prepared on site,” he said.
Another key trend was hosting a food bank collection point, both providing a community resource and encouraging shoppers to purchase additional items. Fourteen of the top 100 shops provided this service this year. Dipak Shah described adding the feature, stating: “It’s all about thinking how you can do that little bit extra to help more people become aware of your store and what you do.”
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