David Rees: Editor's comment

All posts from: March 2015

Take the high road

Posted by: David Rees Wed, 25 Mar 2015

Congratulations to the team at Scotmid, and particularly those at the store in Stockbridge, Edinburgh, for being named Convenience Retailer of the Year at the Convenience Retail Awards last week.
It’s a triumph worth celebrating for a number of reasons, but the most impressive thing about the Stockbridge store is that it is the culmination of a three-year project to devise premium quality, but locally-grounded c-stores for today’s shoppers.

Fresh and local foods have pride of place as you walk in, particularly the bakery section which makes a feature of delicious goods from award-winning local bakers. But as well as having an attractive design and an upmarket feel, there is also value, innovation and top-notch customer service to drive shopper loyalty. In retail, there is always a difficult balance to find between discipline and imagination, but our champion store gets it absolutely right.

The industry is ultra-competitive, and the judging for the awards was, too, but everyone is impressed by what Scotmid has delivered at Stockbridge and at its other black fascia stores in and around Edinburgh.

The success of the project shows that, where there are competitors all around, you can take the brave route and go upmarket to a premium model to establish your point of difference. And being famous for fresh and local foods is a very strong position for any local convenience store to be in.

What does the future look like?

Posted by: David Rees Tue, 10 Mar 2015

Are you an independent retailer? Have you ever considered running a franchised store? For some people, these two questions are mutually exclusive. For them, running a franchise means giving up your independence to a larger corporate entity. In the case of One Stop, this entity is Tesco, which makes it even worse. But not everybody thinks that way, and the tide is definitely turning in favour of the franchise way of doing things.

It’s worth saying that franchises have been around for a long time already (actually, they have a less-than-glorious history in the UK c-store industry, but that is arguably down to the specific business models rather than the concept as a whole). In Europe and America, many of the small store variants of the large chains are run as franchises by independents, and in the foodservice sector there are so many that it is almost the norm. For the likes of Starbucks, Costa, McDonald’s and Subway, more than half of the outlets are operated by partner companies rather than being company-owned, and they simply would not be the size they are now without a franchisee system.

In UK convenience, the art of retailing has traditionally centred around buying well, and most symbol groups have developed out of a form of loyalty scheme for wholesalers. This has served the industry well, but arguably more is needed today.

With so much competition around, a good range is no longer enough: it needs to be perfect with not a SKU wasted. Ordering needs to be slick, stockholding needs to be efficient, and operational tasks need to be structured so that gaps are filled and temperatures checked on a systematic basis.

All of these things are within the reach of a symbol group, of course, but so far this is where franchising is winning. Making money is part of it, of course, but among the new franchisees that I have spoken to, it is not the main benefit. For them, the key satisfaction is the kind of comfort they receive from knowing they have the backing of a larger retail organisation who will iron out any potential mistakes. Because for all of the brilliant and innovative independent retailers that we have in this country, there are still many others who are making mistakes that the multiples and the discounters will continue to punish.

Freedom is a wonderful thing, and the spirit of entrepreneurialism is an unbeatable source of satisfaction for those who make a success out of it. But absolute freedom also gives you the opportunity to get it absolutely wrong, and as an industry we cannot get away with it any more.

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