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Last week, Barbour ABI produced data highlighting the ambitious and small format-focused expansion plans of major UK supermarkets. The company’s lead economist Michael Dall tells RN where the goliaths’ strengths and weaknesses lie
A map produced last week highlights a major challenge for convenience retailers in 2018: supermarket brands are looking to open as many as 150 new sites across the UK in the next 12 months, predominantly for smaller c-stores.
Not only are these sites positioned on the doorsteps of many independents retailers, the majority had been submitted by discounters Lidl and Aldi, companies which are putting further downward pressure on retailers’ margins.
Click on the interactive map below to discover if there may be a new supermarket opening near you. Our colour-coded key will show you which tags relate to which stores.
What you need to know to compete with the mults’ c-store plans? Michael Dall talks RN through the market.
Aldi Advantage Aldi’s key business is offering products at a discounted price. However, it doesn’t compromise on quality and therefore has a widespread appeal.
Disadvantage Independents can capitalise on the lack of range Aldi offers. Most local shops stock a wider selection of products and this can attract footfall away from Aldi.
Asda Advantage Asda is seen by shoppers as much more than a supermarket. Alongside traditional groceries, it offers clothing, electronics and kitchenware ranges.
Disadvantage Focusing on more than groceries has its disadvantages. Shoppers don’t really see Asda as a major grocery chain or destination for convenience anymore.
Lidl Advantage Price is the main draw of Lidl. Shoppers want value from their grocery shopping nowadays, but c-stores will need to compete on more than just price.
Disadvantage There’s still demand for the big weekly shop. Lidl doesn’t have the range to meet this and shoppers may go to an independent retailer to finish their shop.
Morrisons Advantage Morrisons does very well with fresh food. Shoppers are familiar with the quality of its fishmonger, baker and deli ranges, which it has chosen to focus on.
Disadvantage Its focus on quality fresh food comes at a price and its products aren’t as affordable as its rivals. This can often put some value-seeking customers off.
Sainsbury’s Advantage A big draw for shoppers to Sainsbury’s is the Nectar loyalty scheme. Special offers with various popular companies keep customers coming back.
Disadvantage Although Sainsbury’s Local is a large convenience chain, it lives a little bit in the shadow of Tesco and its cheaper prices. Customers don’t see a point of difference.
Waitrose Advantage Waitrose has built a reputation for offering higher quality products than other supermarkets. Customers know they can trust what they’re buying here.
Disadvantage Its focus on quality limits its customer base. Shoppers want quality but they know they can get a cheaper weekly shop elsewhere, which tempts some away.
Marks & Spencer Advantage M&S, the most established and long-lasting name in grocery, stands out thanks to its diverse range of products. It is as famous for its homeware and clothing.
Disadvantage The disadvantage for M&S is its image. It has marketed itself as a brand for older people. The customer base has become limited because of this.
Tesco Advantage The merger with Booker will help Tesco move further up the supply chain and transform its buying power. It will gain wider coverage across the retail market.
Disadvantage Tesco has performed poorly in its financials and, although it is recovering, there is still a perception that its customer service isn’t as good as it used to be.
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