Despite recession and lending restrictions, 2009 was a year of investment for the convenience retail industry
The convenience industry is preparing for the new decade with a new breed of larger, better local store – if it can find the money to fund the investment.
This year ends with independent retail chains throwing off the recession to invest in new property as Somerfield, Woolworths and Threshers stores came to market.
The trend towards formats above the 3,000sq ft threshold was reflected in c-store chain Mills Group’s purchase of five stores above 5,000sq ft from the Co-Operative group.
Spar introduced its Eurospar concept to mainland Britain with Welsh retailer Conrad Davies doubling his portfolio with two larger stores and Appelby Westward announcing plans to launch 20 Eurospar the next decade. Spar managing director Jerry Marwood told Convenience Store he was convinced that “when appropriate, larger stores are a good way of improving the return to independent retailers.”
New independent groups Haldanes and Asco also launched with mid-market stores while retail chains EFB, Rhythm and Booze and and Venus took advantage of the disposal of First Quench’s assets to snap up stores in prime locations.
Dominic Perks of shopfitter Uno Retail Holdings said he expected “an explosion of refits” in early 2010 as credit becomes available.
“Bank funding and lease financing has been hit hard this year but we have seen an increase in the number of indies choosing to ‘tart up’ their stores by making more affordable changes such as new shelving, fridges, and flooring, and improved merchandising,” he said.
However Colin Graves, executive chairman of Costcutter, said the squeeze may continue. “Retailers who can get their hands on finance have been fortunate, and the banks are already talking about another year of pulling the reins in. But some retailers have found money to invest from other sources, from family and so on.”
200 of the group’s members had refreshed their stores in the last year, spending up to £10,000 each, he added.
Figures from market analyst IGD suggest the ongoing trend for a declining number of stores, but with an improving offer and larger sales area, will continue - a further indication of the need for investment.
“We are expecting an explosion of refits in quarter two next year when credit lines
ease and retailers are forced to bite the bullet and invest in their stores.”
Dominic Perks, Uno Retail Holdings
“A lot of retailers have decided to upgrade their lighting, floors, till areas or refrigeration, typically spending £5,000 to £10,000 a time.
There are a lot of empty retail units around and this creates other opportunities. We’ve recently had retailers create new stores in former pubs and car showrooms.”
Colin Graves, Costcutter