Franchise opportunities predicted to rise in 2020
'Ultimately, customers gravitate towards big brands' said industry expert Steve Rodell
Convenience store owners should prepare for more franchise opportunities in the year ahead, according to Christie & Co’s head of retail, Steve Rodell.
The market prediction forms part of the property specialist’s business outlook for 2020.
He told betterRetailing: “We expect to see more retailers partner with franchises in the next year, allowing them to collaborate with premium brands.
“Ultimately, customers gravitate towards big brands in whatever we talk about. If you can put a big brand above the door as opposed to products on the shelf, you are likely to attract more customers.”
The comments come after a growing number of retail businesses revealed plans to expand their franchises to betterRetailing last year.
Stratford Retail Group director Nerissa Haskic confirmed in October that the company was halfway through switching its Londis sites to the Morrisons Daily fascia.
At the time, Haskic said: “We’re trying to offer a top-up shop throughout the week and it offers a much more sensible price point for the customer.”
Bestway Retail chief retail director Andy Creswell also confirmed to betterRetailing in November that he was looking to grow Bargain Booze’s store count, describing geographic gaps in the franchise’s network as “an opportunity”.
He confirmed that the company would be approaching stores about converting as part of this process, which he said was part of a “long-term strategy”.
Rodell referenced Southern Co-op, which is offering franchises to selected retailers, as well as the Co-op franchise opportunities made available to independents through Nisa and Costcutter.
However, he stressed that retailers must consider location when deciding whether to partner with a fascia.
“There is a balancing act with this,” said Rodell. “Although there is the possibility of more volume and footfall coming through your door as a result of joining up with a big brand, you have to assess whether you are in positive territory if you aren’t making as much margin.”
Christie’s business outlook went on to explain that its transactions within the retail sector had been dominated by the sale of garden centres in the past year.
Rodell warned that this posed a new line of competition for independent retailers. “We are seeing a lot more collaboration from garden centres as they invest more heavily in food to go, which is being sold in farm shops,” he said.
“A lot of operators are now trying to encourage customers to use them as a more regular port of call for their groceries.”
Rodell warned that retailers risk falling behind if they don’t already offer food to go.
“We are seeing more evolution with what’s being offered in small stores. Retailers must move forward if they want to compete.”
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