The weight of competition, rising business costs and seemingly endless red tape can all seem too much at times. But put up a fight and the victory may well be yours.
Imagine the scene: It’s sometime around August 2012 and a recently opened Tesco Express across the road is competing for your business. Your Sunday sales are being hit by longer opening hours at the supermarkets, who are exploiting a suspension of trading laws throughout the Olympic Games, and the recent 5% rise in business rates is taking its toll on your costs.
This is a scenario all too familiar to many, and highlights just some of the threats facing your business. However, pro-active retailers have proven that there are ways to tackle the spectre of competition, legislation and business costs head-on. By getting the community onside, highlighting your plight to those in positions of authority and taking measures to curb spiralling bills, you can fight back.
The march of the multiples shows no signs of slowing, especially now they have recognised the potential of the convenience sector, which is forecast to grow in value by £10bn over the next five years (IGD). According to the latest Grocery Retail Structure, the number of multiple-operated convenience stores grew by 7.82% to 3,046 in 2012 compared with the previous year.
The mults’ expansion is being facilitated by the rise in pub closures. Normal planning rules don’t apply to disused pubs, so retailers can move in without much complication. As such, Tesco has converted at least 130 pubs, and Sainsbury’s 22, since January 2010, according to the Campaign for Real Ale.
But when you do get wind of plans for a new store, you can put up a defence. In Llanwrst, north Wales, campaigners fighting a Tesco superstore application wrote to all councillors, local MPs and Assembly members outlining their concerns. They set up a blog, created a petition and distributed protest posters, while contacting local media and trade press to raise awareness further.
Their hard work paid off MP Guto Bebb and Assembly Member Janet Finch Saunders complained to the council, and Tesco ditched its plans. Local Spar retailer Mike Skerrett, who was involved in the campaign, said the involvement of the MP and press was key to the outcome. “It frightened the council, who I’m convinced are the reason behind Tesco pulling out,” he said.
His advice to retailers who find themselves in a similar situation is simple: “Keep your ear to the ground and find out what’s going on. And don’t say you can’t do anything about it - you can, especially once you’ve mobilised support for your cause.”
In Portishead, Somerset, Costcutter retailer Icy Patel is set to compete with a new Tesco Express in the shell of a disused pub. But he is confident his campaigning will stand him in good stead. “Only one out of 130 people who turned up to a public meeting wanted Tesco, and 2,500 people have signed our petition. If Tesco can’t be stopped by the council, people will boycott it,” he says.
Otherwise, if you can’t beat them, join them, as Mark Canniford did when he became a councillor at North Somerset Council. Mark, who owns a Spar in Weston-super-mare, says: “As a councillor you can put other councillors right. I know how high streets should be run.” Mark was able to help block a Tesco application to convert a disused pub.
Once Tesco has arrived on your patch, you have to adapt to compete. When a Tesco Express opened right next door to the Nisa store in Whickham, near Newcastle, owners Sanjeev and Nadeem Vadhera redesigned the store and put the focus on stocking British and local produce, offering top customer service and highlighting their community involvement. Cut-outs of manager Paul James are displayed all around the store, reminding customers to ‘Ask Paul’ if they have a query or want help carrying shopping to their car.
Their strategy worked - sales fell by about 30% after the Express store opened, but then climbed to just 10% down on pre-Tesco levels.
Legislation can also present a threat, just take the tobacco display ban. Less predictable than changes to tobacco regulations was the government’s sudden decision to relax Sunday trading during the Olympics. So it is vital to be up to speed with legislation and be able to mobilise local support when needed.
Lesley Brown of Frankmarsh Stores, Barnstaple, Devon, says the relationship with her MP, Nick Harvey, has enhanced his understanding of issues. “We’ve engaged with him about changes to licensing laws and the tobacco display ban, and we’ve written letters which he’s taken to Parliament.”
Association of Convenience Stores chief executive James Lowman points out that an ACS-organised campaign to mobilise political opposition to Sunday trading relaxation during the Olympics was successful in influencing MPs’ understanding of the issue. “Some 5,000 people sent letters to their MPs,” he says. And as C-Store went to press it looks like Sunday restrictions are here to stay.
While energy costs or business rates remain a significant burden, there are measures to help to ease the load.
One way to save on bills is to click on the Convenience Store Business Energy website, http://convstore.udswitchit.co.uk/electricandgas.aspx, which allows you to check prices of all the main suppliers and switch online to secure the best deal. Look, too, at energy-saving measures such as adding doors to chillers and properly maintaining air conditioning units. See www.carbontrust.com for more ideas.
You may also be entitled to small business rate relief, or to defer rates. Contact your local council, or go to www.gov.uk/introduction-to-business-rates.