Competition between symbol groups is set to become more fierce than ever this year, with fascias increasingly ‘poaching’ retailers from their rivals and the threat of at least one casualty by the end of 2011, say industry observers.
Independent retailer Jonathan James said: “I haven’t seen anything like this before. You’ve got them all jostling for position and actively going out and promoting their symbols.”
Jamie Davison, sales and development director at Costcutter, said the current ecomonic climate meant many independents were realising the benefits of symbol group membership, but they were shopping around for the best deal. “Everyone’s fighting for that business,” he said.
The shrinking number of good-quality independents is making the battle even more intense and encouraging poaching, according to Neill Sherrell, managing director at consultant srcg.
He said: “There are plenty of independent retailers out there, but only a limited pool of retailers good enough to carry the brand flags of the best wholesale groups. This will lead to increasing levels of poaching.”
Davison said Costcutter actively targets its competitors, seeking out their “Achilles’ heels” before trying to get their retailers to defect.
“It’s a quicker result to recruit another symbol retailer; they’re used to group trading,” he said. “If you recruit somebody who was a cash and carry customer, old habits die hard.”
Sherrell said the intense competition, combined with continuing inroads by the big supermarkets into the convenience store sector, was likely to lead to “at least one casualty by the end of 2011.”
He added: “In order to drive fascias forward and get the scale required to sustain supplier support levels, [symbol] groups will need to look at ready-made solutions – ie other groups – rather than bringing systemically poor retailers up to scratch.”
Source: Independent Retail News
