Three years ago Andover was one of the UK’s top Tesco towns, with few independent c-stores still in the game. But after making some shrewed moves, the indies face a brighter future and Tesco’ losing ground
Three years ago, Andover’s grocery landscape was dominated by Tesco, with more stores per population than anywhere else in the UK bar Bicester in Oxfordshire. Now Tesco is one down in Tesco town, while the independents are standing strong.
It could be argued that Andover reflects the wider national picture. In 2011, when C-Store last visited, Tesco was the undisputed national grocery leader, increasing its supermarket and convenience presence in communities across the land. But since then its market share has dropped from 31% to 28.9% (Kantar Worldpanel), driven in part by the rise of discounters Aldi and Lidl, while it has ditched some high-profile supermarkets proposals in towns such as Newquay and Sherborne in the face of determined local opposition.
In Andover, Tesco closed its Metro store earlier this year, leaving behind a superstore and three Express stores. “We’ll continue to serve customers in Andover from our Extra on River Way and through our online grocery shopping service,” a Tesco spokesman said. There were also rumours three years ago that Tesco was planning to open another Express store, which has failed to materialise.
The independent c-store community, meanwhile, is playing the long game. Three years ago Mace retailer Vip Panchmatia had just completed a £220,000 refit which doubled the store size to 1,400sq ft. Weekly turnover increased about £10,000 to £26,000, while he gained about 300 daily customers. But like all visionary retailers, Vip didn’t sit on his laurels, so earlier this year he embarked on a £15,000 refresh as part of the store’s evolution. “It is about four years since I refurbished the store extensively and in four years things have changed, hence you need to keep up with current trends,” he says.
So Vip added 20 metres of space by extending the height of the shelves, increasing the chilled and fruit and veg range and bringing health and beauty to the front of shop from behind the till. Sales of the latter are up 10% year on year, while fruit and veg sales are up a healthy 50% and chilled about 10%. “Fruit and veg had been hit and miss in the past as we had limited space. But after installing extra shelving for non-chilled veg and increasing the daily basic products, we gained more sales,” he says.
He has also increased the wine range and added home-made samosas to the thriving food-to-go category. He has benefited from Costcutter’s new Independent own brand range, too, which he has been stocking since January under Costcutter’s new supply deal with P&H. “The Independent range is selling well and gaining popularity,” Vip says. “The honey and coffee in particular has had good feedback, as well as tonic water, ginger ale and water,” he says. Well over 100 Independent coffee jars have sold since January, he adds.
“If you want to call your store a one-stop shop you have to have the range. We have a diverse demographic so it’s important to have a quality own brand alongside big brands.” He has also reduced magazines from two bays to one, while increasing the household range. “I don’t see magazines recovering, everyone is looking online, but newspapers still have a market,” he says.
Vip is also sharpening a key point of difference with the changes he has made to the post office. He has introduced a combi counter which has had a noticeable impact on footfall and sales, and increased the opening hours from 9am to 3.30pm to 7am to 10pm on Monday to Saturday, and 7am to 8pm on Sundays. “When the staff are fully trained up we’ll advertise the service more, as it’ll bring people in from a wider area,” he says.
Punit Patel, who owns the nearby Nisa Local Weyhill Stores, directly competes with a Tesco Express 200 metres up the road. Three years ago he was able to hold his own on a number of levels, including alcohol, service, and community engagement courtesy of Nisa’s Making a Difference Locally charity.
He also managed to hold his own on price due to Nisa’s “fantastic offers”, which he believed were market-leading in the symbol sector. But one thing hamstrung his business more than anything else, and that was his failure to get a Lottery terminal.
This changed 18 months ago when Camelot rolled out 8,000 terminals to independent retailers, and he hasn’t looked back since (see panel). Punit has also attracted new trade with his Collect+ parcel collection service, with customers coming in from out of town especially. His next step is to invest in chiller doors and LED lighting, as he plans for the future with confidence. “Our sales are definitely up on three years ago,” he says. “I also bought the store about three years ago so now I’m in control, which has boosted the business.”
Mayur Patel, of Saxon Fields Stores on the edge of town within a housing estate, has enjoyed a 20% sales increase over the past three years. He hasn’t sat still for a second, whether engaging with C-Store’s Shop Project makeover initiative, constantly evolving the categories across the store, or investing in energy-saving equipment. “As a result of Shop Project we introduced £1 pricemarked chocolate bars in horizontal blocks, rather than vertically, and sales rocketed,” he says. “I think having them in vertical blocks acts as a barrier - so it just goes to show the huge difference that tinkering can make.” He also introduced hanging bags thanks to Shop Project and “learnt from the big boys” by introducing mix-and-match ‘two for £1’ deals in confectionery. “Everything is either pricemarked or £1 in confectionery, and sales have increased phenomenally,” Mayur says.
Earlier this year Mayur enlarged the greeting cards section, adding a range of quality cards to complement the budget selection. The shelves are maintained by the card companies themselves, and so far sales are up 15%. To accommodate the extra space, Mayur has halved the magazine section for the same reasons as Vip.
Another category in growth is frozen, which has benefited from his decision last year to stock just pricemarked products in the freezer. “Margin becomes less but the extra footfall spends money,” he says.
He has also capitalised on the local pet-owning community, who he has discovered are prepared to treat their furry friends. Inspired initially by the Shop Project, he has introduced a gourmet range which has brought in footfall on its own. “I was worried it would be too premium, but I’ve been proven wrong. Dog owners come into buy treats,” Mayur says. “I’ve also realised pet owners like variety so we continually bring in new products.”
He has been able to enhance his overall range with the extra 20m of shelving he has installed across the shop, including an extra 3m for beer and cider. “We’ve brought in what people wanted and educated customers on flavoured cider. We’ve also increased the ales range,” he says. “In wine, everything is on offer now.” Alcohol and soft drinks have benefited from new chillers with doors, which Mayur invested £50,000 in two years ago. “Our electricity bill used to be £1,200 a month with 3m of chillers - now we’re paying the same with 20m,” he says. “The future looks better from an investment point of view.”
As for Tesco, Mayur believes its influence has waned in recent years. “Tesco is lagging behind in the UK. In Andover the quality is not there,” he says. “So many of our customers say they don’t like shopping there anymore. The customer service has never been at Tesco, it’s like a conveyor belt, and people want better customer service nowadays. You can’t get everything here, but we can do things out of the ordinary.”
Three years ago Vip predicted that small businesses would rebuild the economy. In Andover, as independent c-store owners build their businesses and Tesco goes backwards, he may be on to something.
Winning the lottery
Punit Patel used to lose up to 25 customers a day - mainly to the nearby Tesco Express - because he couldn’t get a lottery terminal in his Nisa store. Camelot had told him that he was too close to the Co-op half a mile away, but that didn’t stop Tesco Express from getting it when it subsequently opened. Mayur Patel also used to lose customers because he couldn’t get a terminal, in contrast to his local Tesco Express. But both retailers finally had their wish granted when Camelot rolled out 8,000 terminals to independents in 2012.
Now Punit can keep those extra 25 customers a day, with the Lottery making “a big difference to sales and footfall”. Mayur says the Lottery was “like the final piece in the jigsaw and our biggest seller”.