There are almost 22,000 independent convenience stores using one of the UK’s 20-plus symbol fascias and franchise options. And the number is rising. In this week’s fascia & franchise feature report The Grocer’s research shows an extra 826 stores signed up in the past year.
That’s not surprising. To be an unaffiliated independent retailer in these trading conditions is a lonely, scary business. And as we explore in the report, while supermarkets continue to grow their convenience estates (and up the ante with price and loyalty initiatives), symbol operators are responding, with investment in new formats and food to go concepts, and access to new and improved loyalty schemes, price-matching initiatives, free category insight, own label ranges, social media advice – even scratchards.
The 800lb gorilla is Booker’s Premier fascia. After signing up an incredible 262 shops last year it now boasts over 5,000 outlets. But the successful growth of Go Local is a huge credit to the continued growth of Parfetts.
As to the most intriguing symbol operator right now, it’s surely Morrisons. On top of the 1,000 company-owned, company-operated Morrisons Daily stores (or ‘co-cos’ as CEO Rami Baitiéh refers to them), there are now 700 ‘fo-fos’, or franchise owned and franchise operated stores. And it’s planning to open another 250 ‘fo-fos’ by the end of the year.
It’s a revenue stream that market share barometers like Worldpanel and NIQ fail to account for, Baitiéh pointed out in a results call this week. But a modest increase in overall sales and flat EBITDA speaks to market pressures such as the closure of its in-store bakery, the Q1 cyberattack on its supply chain software partner, and extra NIC and minimum wage hikes (and inflation) resulting from the Chancellor’s 2024 budget.
Still you can see the appeal of these ‘fo-fos’. While increased employee costs have understandably prompted Morrisons to kick off a review to make staff in its ‘co-co’ stores ‘more flexible’ (p11), the ‘fo-fo’ stores leave such concerns to the franchisee. To be successful in its ambition, however, Morrisons cannot afford to be complacent. The proposition will have to be spot on.
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