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RETAIL MYTHS
GROCERY SECTOR - “SMALL INDEPENDENT SHOPS ARE BEING DRIVEN OUT OF BUSINESS AND REPLACED BY 'CLONE TOWN' BRITAIN”
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The British Retail Consortium champions retailers of all types and sizes, big and small, food and non-food, online and bricks and mortar.
The combination of successful multiples and successful small retailers is vital to consumer choice, to the richness of the retail mix in our high streets and to local economies.
The good news is the independent retailing sector is actually very resilient. The Local Data Company's Openings & Closures Report 2009 shows the number of 'comparison' (non-food) retail businesses grew by just over three per cent in 2009 but within that, the number of independents grew 5.6 per cent while multiples barely rose at all. Convenience retailing saw a similar pattern with independents rising in numbers by 5.7 per cent and multiples by a lesser 3.5 per cent. In particular numbers of butchers and bakers rose.
They are surviving and thriving by offering their customers something different from and/or better than their bigger rivals. Identifying niche opportunities and then delivering a competitive, customer-friendly offer is still the key to success, regardless of size.
The term "clone town" usually refers to high streets and shopping centres which are dominated by relatively well-known retail brands and where independent shops are poorly represented or completely absent. Have these dastardly "clones" declared war on independent-led diversity, or are smaller shops beset by other problems which help to explain their decline?
There are at least three groups of factors which, together, have undoubtedly contributed to the uncertain outlook for many small retailers.
- The first of these concerns is the cost of running and retaining retail property. While the larger multiples are increasingly able to negotiate turnover-based rents, smaller retailers are still stuck with upward-only rent reviews. Rents have been rising in real terms every year over the past decade, while the 2010 revaluation of commercial property inflated many retailers' rates bills sharply. When small operators in high cost locations finally throw in the towel and vacate their shops, only the big brands can afford to take on the leases and other overheads.
- The second group of issues includes the planning and transport constraints which now apply to many traditional shopping centres. Ease and speed of access are powerful influences on consumers when they are choosing where to shop. Expensive parking and restricted access to town centres tend to enhance the attractions of edge-of-town and suburban retail parks and shopping malls. Customer footfall then declines and small shops find themselves up against the dangerous combination of falling trade and rising overheads.
- The third group of issues relates to the growing burden of regulation – something which affects all retailers but falls particularly heavily on the small operator. Over the past decade, thousands of new regulations, inspired in both Brussels and Westminster, have come into force which retailers must understand and observe. Research by small retailers' organisations suggests that regulation is an important influence on the profitability and longevity of their businesses.
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