Independents can fight back against the onslaught of the major supermarkets by playing to existing strengths and creating new ones, says independent retail analysts Verdict as it outlines strategies for survival for independent retailers.
The report claims that an existing strength for independent retailers is the insulation from inflationary pressure which the convenience market provides. Cliona Lynch, retail analyst at Verdict, said: “Shoppers tend to be less price sensitive in convenience stores, prioritising time saving, easy access and quick purchases over low prices.
“They are also more likely to spend a little more on each occasion, picking up impulse purchases that a planned shopping trip would not have allowed. Moreover, convenience stores benefit from distress purchases – unplanned and urgent shopping trips, which are linked to immediate needs rather than price.”
Lynch added that independent retailers should not overlook their natural advantage in local loyalty dynamic. “While loyalty at larger multiples is based around convenience, price, range and rewards, smaller retailers have the benefit of a different loyalty dynamic,” she said. “Some customers want to support local produce, local commerce, and often are loyal to a personal relationship with a well known local retailer.”
However, the most successful independents in an increasingly competitive environment will be those who specialise, says the report. Regardless of the price points associated with their products, specialist ranges combined with expertise in a specific category gives small specialist independents competitive advantage against the multiple retailers.