The concern started the day Arul stood outside an empty Woolworths store in Manford Way, Chigwell, in Essex. It sat in the middle of a parade and within a minute's walk left or right were two greengrocers, two bakeries, a 2,500sq ft Spar store, a Threshers off licence and a Post Office. And what's that right next door to the vacant property? A Tesco Express.
Most retailers would have walked away, but not this one. "What this place needs," said Arul to himself, "is a Nisa Extra."
Standing there again, showing off his 3,000sq ft store which opened two months ago, the infectiously cheerful Arul has plenty to smile about. He doesn't want his big-name neighbour's bosses to know what he's turning over, but the figures he shares with Convenience Store are very, very healthy indeed. The store's looking great, not quite finished, but gleaming clean and fresh with promises of bargains and variety inside. And while Tesco must have plenty of well-presented stores among its 1,140 plus Express estate, Arul's neighbour isn't one of them. From its bare windows and closed doors to the poorly lit interior with its peeling paint, the whole place looks whisper it a bit defeated.
Arul's business instincts didn't let him down, and he's quickly proven that it's possible to take on the big boys and win. But then he's had some experience of going up against the might of the mults. "I have another store in South Ockenden and Tesco opened an Express nearby," he says. "At first we thought, well that's it, this is the end. We matched its prices, so we lost margin, but we spent some money, tidied up the store, and soon realised that sales weren't falling.
"We do things different and we know our strengths. We're friendly, we look after the older customers who come in for company, and we'll make a point of stocking any product our customers ask for."
The Woolworth's estate came on the market just as Arul was looking to expand. He lost out on his first few choices, but then found the Manford Way site which no one else wanted to take on, for obvious reasons. "Deloitte (Woolworth's administrator) couldn't wait to get rid of it," he laughs. "The question everyone asks is: why didn't Tesco buy it itself? I can't answer that, but I'd guess they never thought a competitor, particularly an independent, would dare to open up next to them."
Raising the finance wasn't much fun. The bank took one look at his business plan, one look at the fascia next door, and decided it could only extend Arul's overdraft. So it was family and partners who funded the project.
At least Arul's wholesaler and symbol group operator, Nisa-Today's, was on side. "They offered to do an audit of the area, the number of residents, their incomes, and the stores serving them," he says. "But I told them, no thanks I knew they'd advise me not to bother!" Nevertheless, Nisa was with him all the way, helping plan the layout and giving him "very generous" credit terms. "I can't praise them enough," he adds and during C-Store's visit, a Nisa merchandising team is also in the store, working its magic on the tinned grocery aisle.
Purchasing the property, however, was only the start of the process. Arul soon discovered that the local council had attached conditions to the lease to protect the independent traders on the parade. These limited him to 1m of fresh meat, 2.5m of fresh fruit and vegetables and 1m of greeting cards. While Arul hadn't planned for these restrictions, he was happy to concede to them to support his fellow independents. What annoyed him, however, was that the Tesco Express was apparently not bound by the same rules.
More problematic was a requirement to retain 22m of frozen foods. The rear of the store is given over to a row of chest freezers, with a non-food £1 zone behind them. This is frustrating Arul: "I'd love to get a fresh food franchise in here, like Subway, and perhaps an ethnic food section, but I'm stuck with these rules for now."
Then there was a dispute with a shopfitter which delayed the opening and left Arul paying for months for a property he couldn't trade in. "My blood pressure was off the scale," he admits. "I should have gone with the shopfitter recommended by Nisa, but I thought I'd found someone better and I was wrong."
The store opened without fanfare and was immediately busy. Among the first visitors were groups of suited men, taking surreptitious photos on their phones. It's only 10 miles round the M25 to Tesco's Cheshunt HQ. "You can tell when there's a senior executive in, because he's followed everywhere he goes by four nodding suits," Arul laughs. "I'd prefer it if they introduced themselves, but I don't throw them out." The nearby Spar manager, in contrast, came along on opening day to shake Arul's hand and wish him well.
A large part of the store's success is due to its staff. C-Store's 'hover test' stand still in front of a fixture and see how long it takes for someone to come to your aid is passed with flying colours, and there's a cheerful buzz about the place. "I want everyone to feel like they're a part of the family," Arul says, and quite a few of them literally are. "I look after them I'll help out if they need a bit extra, and I listen to their concerns and their ideas. When I'm here I work from an office by the tills, so I'm there for them and the customers.
"In return we expect everyone to chip in. No one ever says 'It's not my job, it's not my department'."
A key decision was to match Tesco on price, and here Nisa was again invaluable. "They constantly monitor prices in Tesco stores and send us the data and we stick to that. In fact, as they're gathering data from larger Tescos, we're often cheaper than the Express."
So why is anyone still shopping at Tesco? Compared with the white Nisa fascia and inviting window graphics, the Express's narrow frontage reveals only the back of a chiller and a battery recycling bin. A quick exit poll suggests that its patrons use it because they know it "I didn't realise that was a supermarket," one said of the twice-the-size Nisa. That's the dilemma; Tesco's advertising clout has created familiarity and a perception of value for the brand which makes Arul's store invisible to some shoppers. It's something Nisa is aware of and it's working to raise the profile of its members' stores under its Nisa branding.
One example of that is the Making a Difference Locally scheme, which Arul and his staff have embraced. They have two local charities lined up to receive a donation from the charity fund set up by Nisa for each of its stores, and Arul plans to match the money raised with his own contribution.
He's also making links with the other traders on the street. "I'm going to suggest we all ask our staff not to park outside the shops. That way there's more parking for customers and we all benefit."
Like anyone who saw an opportunity and seized it, Arul has a vision. "I started in a 235sq ft corner shop and that's still what this is a very big corner shop. We're showing that this trade is not just for the big boys, there's plenty of room for independents like us.
"Nisa is a member-owned group, so to the suppliers we look like a multiple, but to our customers we're still just the local shop with the personal touch. It's certainly the best of both worlds."
Independent retailers don't need to fear threat of the multiple grocers. They have their strengths, but you have yours. Convenience Store's Fight Your Corner campaign brings you stories of businesses and communities that have resisted the intrusion of the faceless fascias, and reports on retailers, like Arul, who have found a way to prosper under pressure from the multiples. Our aim is to give you the tools and the confidence to use your unique relationship with the local community to provide products, services and a shopping experience that the mults can't match. We'll also explore how helping customers to appreciate the value of real local shops can work wonders for both your business and their neighbourhood.