Nine out of 10 independent retailers say their profit margins on food and drink have got worse in the past year but that has not tempted the majority to get groceries from supermarkets to sell in their shops.
In fact, of those that did admit to sometimes shopping at supermarkets for products to sell in their shops, just over half of them said they were doing it less often than a year ago.
The Grocer’s exclusive reader panel comes hot on the heels of the recent furore over the launch of a Walkers crisps promotion at Asda where 30 x 25g packs of Walkers crisps were being offered for £2.28, less than 8p a pack (The Grocer, November 5, p5). Wholesalers, especially smaller independents, said the prices they had to pay were significantly higher.
And they acknowledged that retailers often bypassed them and visited the major supermarkets instead to buy alcoholic drinks.
In our reader panel survey, more than one in three retailers admitted to
buying in products from supermarkets with 72% of them going to buy alcohol.
Many said that the sheer hassle factor of going to the supermarket was one of the reasons they did not buy there, even though the vast majority felt that the supermarkets were offered better deals than their wholesalers could offer them. One retailer talked of Christmas tins of biscuits that she struggled to get rid of. “The supermarket was selling them for £4 and even though I was selling them at cost, the cheapest I could go was £6.99,” she said.
Some independents felt the public were being brainwashed by supermarkets into thinking their products were cheaper. “Don’t people realise that when there’s a bogof on one product, then another one has its price increased to cover it?” asked one retailer from Nottingham.
In terms of falling profit margins, one retailer talked of just having to become smarter about pricing. “I can control alcohol but not food,” she said. “Putting 5p on a tin of beans is not a smart move but a bottle of wine can perhaps stand me putting an extra 50p on.”
Some felt that an increase in price-marked packs was hitting their margins.
>>p19 The Grocer 4 Independents
Gail Hunt
Reader Panel: independent retailers