Your chance to comment on today's top story

Independent retailers have rubbished claims made in a Competition Commission working paper that more unaffiliated independent c-stores than ever are entering the market.

In a telephone straw poll carried out by Convenience Store, 100% of retailers said that it is harder to open a new store today than five years ago. Those surveyed cited the increasing dominance of the multiples and their march into the convenience sector as the major factor stifling the growth of the independents.

Retailers also pointed to an unfair buying advantage enjoyed by the supermarkets, which they say squeezes suppliers’ margins and has a knock on effect to the rest of the grocery market.

The working paper, entitled Entry and Exit of Small and Specialist Stores, analyses data from Experian Goad, which logs store openings in selected retail centres such as retail parks and town high streets, but covers no more than 4% of the total c-store market. It concludes that more unaffiliated independent c-stores are currently opening than closing, and that there is a particular peak in store openings near to supermarekt developments.

This conclusion contradicts the IGD/Knowledge Store database used as the industry standard by all the leading retail research organisations, which has shown a steady and continual decline in the number of unaffiliated independents in recent years.

The Association of Convenience Stores was quick to challenge the working paper. Chief executive James Lowman said: “When it comes to opening and closures of c-stores, the Experian Goad data is so limited as to be useless. It does not cover the neighbourhood areas and villages where most convenience stores trade. We would be very concerned if the Commission was to draw conclusions about the state of the market from this data.”

A Competition Commission spokesman said that the Experian Goad data was used “because it was amenable to the analysis we wanted to undertake” and that it would be used to consider the effect of supermarket opening on small specialist stores as well as c-stores.

He added: “We’ve published 20 working papers so far in this inquiry and, while they all cover important matters, they are not meant to be the final word or view on any subject.”

Readers Comments

Bhoo Patel:

“It’s a load of rubbish if the Competition Commission is saying more c-stores than ever are entering the sector. I’ve seen huge numbers of independent traders just pack up and leave. It would be extremely hard to enter the c-store market now compared to say five years ago. Also at the cash and carry level, I feel that even if a few of the bigger cash and carries were to merge, they still wouldn’t be able to compete with the power of the supermarkets.”

Richard Terrell:

“There’s much more competition from the supermarkets today than ever. For independents it’s just a case of trying to keep their heads above the water. It’s definitely harder to enter the market now than 10 years ago. The buying advantage of the supermarkets also makes it very hard to compete.”

David Patient:

“It’s much harder to enter the market today, with the multiples competing in the same sector but with much more power. It’s absolutely staggering that the Competition Commission is saying that more independents than ever are entering the market.”

Gordon Moore:

“On which planet did the Competition Commission do its survey? It certainly wasn’t Earth! Six convenience stores in my local area have closed in the last 15 years - explain that!"

Simon Berry:

“There is simply no way that the market has become easier to enter. So many of the local businesses around here have closed down over the last few years thanks to the arrival of Tesco Express stores.”

Deborah Parks:

“Across the board, the supermarkets have too much power and they’re shutting the small businesses out one by one. We’re not developing at all at the moment and costs are rising constantly. For someone looking to start out now and set up a new business it would be very hard.”

Mina Patel:

“Business has definitely got much harder in the last 10 years. A lot of independent retailers that we know are struggling.”

David Brunt:

“Business has definitely got harder. Those who set up 20 years ago are probably doing OK as they will have had the chance to adapt, but any newcomers trying to set up a simple corner-shop are doomed. I have had to invest in quite a bit of promotional activity of late just to get people through the doors which I have never had to do before.”

Alan Tilmouth:

"It is interesting that the Competition Commission decided to use a different organisation to the "industry standard" and begs the question why? Perhaps it was because it was always going to provide them with results "more amenable" to the conclusions their masters wish them to reach."

Arjan Mehr:

It is alarming that such questionable data has been given so much credibility by the Commission!

Have your say

Post your comments here. Your contribution may be edited for publication. Your email address will not be published.