If you can’t beat ‘em…this month’s masters Richard Jordan and Mike Colley urge indies to take a leaf out of the discounters’ book if they want to compete on price
Q How big a threat are the discounters?
Colley: The major supermarkets have sat on their hands for the past few years, but are now waking up to the threat posed by discounters in their own backyard. The price-driven supermarkets will now join the fray, forcing down prices of a broad range of products including home & beauty, basic grocery, soft drinks and confectionery. Add this to the carving up of the Easter and Christmas market and we can expect major changes in the way the public values major brands. The irony of this is that the manufacturers have created the monster that threatens to consume them.
Jorden: The threat is not that great as the customer shopping mission is very different. The mission in independent is distress or top-up. It’s very rarely planned unless it’s for a paper on the way to work or a bottle of wine on the way home. Price is not the driving motivation, which is why the feedback from shopper exit interviews is generally centred on range, availability and basic hygiene factors. The customer mindset is different so there is room for everybody.
meet this month’s masters
Richard Jorden, group commercial director at DCS Europe, joined the company in 1995 as a trading executive, following buying roles at Morrisons, Batleys and Pricemaster. In January 2012, Jorden assumed the role of group commercial director, with direct responsibility for strategy, sales and profitability of all the DCS divisions.
Mike Colley is MD of newsagent group Rippleglen. He joined in 2003 after spending 26-years at Stars News Shop. He led an MBO of Rippleglen in 2011 and the company currently has an annual turnover of more than £90m and a portfolio of 125 sites.
Q What can indies do to differentiate themselves from the discounters?
Colley: There are suppliers who are able to gain access to discounted products. The independent must be prepared to chase deals in cash & carry and specialist wholesalers and must treat the brands very much as the brand owners do stock them while they are cheap and move on when the price moves back up.
Jorden: The store owner needs to bring a passion for service to their business as this is their key point of difference. The successful independent goes out of its way to welcome its customers and many know regulars by name. The friendliness of staff is the best weapon in the independent’s armoury service will set it aside from the multiple or discounter where the customer is unlikely to see the same staff member on consecutive visits. However, if I were an independent located near a discount store, I would be using everything at my disposal to hold my trade and beating them at their own game with a Poundzone from DCS.
Q Why did you launch Poundzone and how does it work?
Jorden: Ever mindful of the trading opportunity in other sectors of his business, Denys Shortt, CEO of DCS Europe, came up with the Poundzone concept to help our customers in the cash & carry sector sell everyday toiletries and household goods into independents. We’re so confident about the ‘pound store in a box’ in-store mechanic that we’ve commissioned free-standing display units in Poundzone livery. These are provided free and offer a no-risk way to add new sales to categories that are not traditionally key footfall generators in small stores. Some wholesalers have Poundzone lines across grocery categories, too. If a store cannot find space we recommend using a gondola end bay.
Q Rippleglen recently launched a new fascia. What was the thinking?
Colley: We launched our high-street discount division, trading as Supernews Discount, in order to react to the march of the discount chains. We observed the areas of the discounters’ offer that we could best replicate and added in our cut-price tobacco, PayPoint, lottery and news products. We then chose a range of countlines and soft drinks and agreed fixed retail prices, adding a full range of £1 hanging bags, biscuits and multipacks. Crisps and snacks sales have been damaged by the industry move to £1 multipacks. We introduced a range that reflected more what the customer expects to see on the high street.
The infinite variety of high street retail?
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Discounters: why it pays for indies to think like them