New report shows expansion opportunity for small shops
Which symbol groups are best placed to take advantage of shopping locally?
Unrivalled residential coverage and ability to trade profitably in lower-affluence areas gives independent stores a head start in responding to the coronavirus, according to the author of a new report on symbol group catchment areas.
David Haywood, former Somerfield head of locations and founder of Maximise UK, told betterRetailing that 65% of households live within 500 metres of an independent local shop, compared with 25% who live within 500 metres of one of the big four grocers.
He said this presented an opportunity for “small shops to become bigger”.
Haywood explained: “That’s the head start independents have got. You only need to read the news about supermarket delivery schemes to know how much they want to be on people’s doorsteps.
“If independents can establish click & collect and home delivery of top-up and convenience shops before the multiples can get stronger in deliveries, there’s a real opportunity to be had.”
Highlighting the failure of supermarkets to establish a presence in now key residential area types, the analysis by Maximise UK showed just 11% of the Big Four and Co-op’s combined estate sits in “very low-affluence” catchments compared with 28% of all symbol group stores.
Haywood said a recession brought on by the coronavirus would bring more areas into the low- or very low-affluence descriptions and “make it even harder for major players to expand” over the coming years.
The new report hinted at which symbol estates are best placed to capitalise on the pivot towards shopping locally.
Oppositely, just 29% of Spar stores, 31% of Mace stores and 32% of Londis stores were in this category, while all three of these fascias had at least half of their estate in the normally non-residential categories of petrol and service stations.
Maximise UK specialises in helping convenience operators identify the right potential sites for expansion. Asked about the common mistakes made by store owners, Haywood revealed: “A
lot of people get excited about the property, but I would say be excited about the catchment.
“You can work with a compromised property in a good catchment, but you can’t make the best property work if there’s insufficient catchment.
“It’s about delving into that 500 metres and a bit beyond. Demand volume has to come first. You
can talk about demographics and branch concept, but you’ve got to understand the demand by looking at the types of houses or offices and who’s passing by.”
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