Sarah Coleman of TWC presented at the FWD ‘Bringing Wholesale Together’ webinar to share some findings from a recent project we conducted in collaboration with the FWD. The objective of the project was to create a solid evidence base to determine whether independent convenience retail has remained competitive through current price inflation and whether margins are being unfairly squeezed compared to other channels.
The headlines include:
- Price audits showed that prices for a list of like-for-like products had risen by +11% in independents, +13% in Tesco Express and +17% in Tesco Supermarkets
- As prices have risen more at the multiples. the price differential vs. independents is falling and in January this year was almost non-existent between Tesco Express and the independents. However, the multiples are using their loyalty programmes to offer shoppers very deep discounts of up to 35%
- In independent convenience we also need to consider the shared margin for both wholesaler and retailers – and we’ve seen the cost of doing business for both rising by at least 13%.
- Independent retailers are fighting for their share of local trade, including their core strengths of customer service and supporting local charities. Many are also trying to compete on price…
- We consider the opportunity for tactical promotions to drive footfall, increase spend, trial new categories and encourage consumer trade-up in store, rather than a race to the bottom, the channel needs to be smart in order to be both competitive but also sustainable.