Is your glass half-full, or half-empty? It depends on how you look at it, but from IGD's point of view convenience retailing's glass is not so much half-full as overflowing. Sales through the local shops sector surged past the £30bn mark last year, a rise of more than 6% despite a recession. Grocery as a whole is resilient in the bad times as well as the good ones, but on top of that small stores have increased their sales faster than big stores have in every year in recent history.
In my experience, local retailers are generally enjoying good levels of business, but that does not mean to say that life is easy, or getting any easier. Statistically, convenience is riding the crest of a wave, but we also know that times are tough and shoppers are looking for value. Where once independent retailers looked first and foremost for big brands and high margins, increasing amounts of space are being given over to special offer fixtures, private labels and pricemarked packs to convince shoppers that they can get value at their local shop. Footfall half-full, margins half-empty.
Personally, I'm in the half-full camp. Ranges, retail professionalism and service have all improved markedly in recent years, and shoppers have voted with their feet, recession or no recession. Let the good times roll.
Another glass-half-full situation is the new coalition's position on alcohol. On the one hand, they have promised to cut red tape for small businesses with a one-in, one-out rule for new legislation, but on the other have promised more regulation on booze. Even stiffer penalties for selling to the underaged, including permanent closure and a £20,000 fine, are on the cards. Good news if the authorities prosecute only the properly guilty, but it's a worrying development for the thousands of responsible stores who will be living in fear of a slip-up.
The new government has also said it will ban the sale of alcohol below cost. Tesco supports the idea. Perhaps it is being socially responsible; perhaps it also has something to gain from such a development.
If a ban goes ahead, it puts suppliers in an interesting position. They have always maintained they are not involved in setting pricing at retail level. Independent retailers, who can see the difference between supermarket prices and their own, generally don't believe them.
So how will we ever find out what 'cost' is? Is anyone going to be forced to reveal structures for overriders and discounts obtained in return for display space? And are suppliers going to call the cops if they see a supermarket selling product too cheaply?