As new independent supermarket chain Haldanes opened its 12th store this week, and with established rivals also planning new sites, The Grocer's annual ranking of the UK's Top 50 independent grocery retailers revealed that, among the 13 independent supermarket operators on our list, sales rose 5% last year while pre-tax profits rose 25% in 2010.
With £1.4bn sales, the no1 spot was taken by variety retailer Wilkinson, which was included in the Top 50 for the first time, as more than 50% of its sales are now grocery-related
Discounters and variety retailers account for four of the top five slots, although margins fell. The other top five slot is held by Martin McColl, the CTN-turned c-store retailer
At £42.6m, the profits of TJ Morris (aka Home Bargains) are greater than the sales of almost half the Top 50
The indie supermarket sector was boosted by new store acquisitions, with store numbers up 3% in the past year as indies made the most of The Co-operative Group's forced store disposal programme. CK's Supermarkets, Harry Tuffins and Booths all expanded, while Stans Superstore and Budgens and Spar retailer James Graven & Sons are both planning to in 2010. .
Explaining the growth, Him! director Tom Fender said the recession had actually been a help. "The past 12 months have seen growth in local shopping driven by emotion, convenience and the need to manage budgets. There's lots of optimism and potential to grow sales."
Harry Tuffins this week reported early trading success from the two Somerfields acquired last year from The Co-op Group. The stores, in Lydney and Coleford in Gloucester-shire, which opened earlier this month under the Nisa Extra fascia, were trading 50% up on Somerfield figures, it said. "This is a credit to all management and staff who helped to achieve the refits in under a week," said MD Paul Delves.
Speaking at The Grocer's Annual Lunch for leading independents and wholesalers this week, Nigel Mills, MD of Mills Group, also said trading had been positive in the eight supermarkets Mills Group acquired from The Co-op Group last year, taking it into the supermarket sector for the first time.
Sales were boosted by longer opening hours, and the introduction of a larger non-food element, including greeting cards, stationery, newspapers and electronic payment services. The renaissance in indie supermarkets comes a week after Asda confirmed it would expand its number of small supermarkets after buying three from The Co-op Group last year.
The move would stop shoppers defecting to c-stores, Him! research suggested.
Interviews with 30,000 shoppers showed 46% of Asda shoppers used the retailer for top-up shopping. The number one reason an Asda shopper chose to shop elsewhere was because another chain was in a more convenient place.
Last week, Asda CEO Andy Bond stressed the smaller shops would not be c-stores but would stock enough products for a full weekly shop and would be priced the same as Asda's larger supermarkets.
Sales of The Top 50 overall rose 9% last year, with profits up 15% and margins nudging up from 2.7% in 2008 to 2.8% in 2010.
Indie supermarkets may be in growth but CTNs have struggled. The Top 50 found that among the three pure CTN operators to make the list Rippleglen, Maynews and GT News sales fell an average of 3%, with store numbers dropping 3% and staff down 7%.
However, GT returned to profit in 2010. CTNs are being hit on all sides by tougher tobacco restrictions, declining newspaper and magazine sales and increased pressure from the multiples, so it is no surprise that CTN retailers are moving further into convenience.
Both Martin McColl and Mills Group started out as CTNs but now consider themselves convenience operators. This year's Top 50 shows the move has paid off. Martin McColl reported a 252% rise in pre-tax profits to £21.5m, while Mills Group sales rose 12.3% with a 34% increase in profits.
The Top 50