millions spent on c-store deals; much more to come
Another week; yet another leading convenience store operator is gobbled up. For us, of course, the bitter sting in the Jacksons tale is that we named it the country’s best independent retail chain in The Grocer Gold awards only a matter of weeks ago. Ho hum.
We were also shocked by news of its acquisition by Sainsbury because we have long believed that Jacksons was one of those chains that would not sell out. Ever. But everyone has their price - and I’m pretty certain that the family was able to extract a damn good price out of Sainsbury for its excellent business.
In fact, as you can read on page 34, we estimate that a staggering £1.25bn has now been spent on acquisitions of convenience stores and neighbourhood supermarkets since July 2002. Put another way, that means the average paid per store is something approaching £500,000.
This is, of course, great news for all those of you with top-notch stores who now find yourselves sitting on incredibly valuable assets. And I fully understand why you would want to take advantage of the fact that there are a small number of acquisitive companies with very deep pockets roaming the market splashing out huge sums of money for small chains.
But what happens when this feeding frenzy ends and the takeover of convenience is complete? Will there be any sizeable independents left? Will the independent retail scene be as vibrant and diverse as it is today? Will we see entrepreneurs building up businesses to replace the likes of Bells, Jacksons and Morning, Noon & Night?
I’m enough of an optimist to believe the answer to all these questions is “yes”. But I am also enough of a realist to understand that it is going to be even harder for those that remain to compete - both for customers and for new stores (after all, how many independents can afford to shell out £500k+ for an outlet?). Many will stop trying to compete; many will be forced out of business. But Sainsbury’s Jim McCarthy is scathing about those who argue that the aggressive moves by the big grocers into convenience will ultimately restrict consumer choice. He tells us: “There are still 55,000 independents. The consumer has a massive choice.”
The question is: for how much longer will they have that choice? It’s a question the Office of Fair Trading should start trying to answer. Before it’s too late.
It’s £1.25bn - and counting
Another week; yet another leading convenience store operator is gobbled up. For us, of course, the bitter sting in the Jacksons tale is that we named it the country’s best independent retail chain in The Grocer Gold awards only a matter of weeks ago. Ho hum.
We were also shocked by news of its acquisition by Sainsbury because we have long believed that Jacksons was one of those chains that would not sell out. Ever. But everyone has their price - and I’m pretty certain that the family was able to extract a damn good price out of Sainsbury for its excellent business.
In fact, as you can read on page 34, we estimate that a staggering £1.25bn has now been spent on acquisitions of convenience stores and neighbourhood supermarkets since July 2002. Put another way, that means the average paid per store is something approaching £500,000.
This is, of course, great news for all those of you with top-notch stores who now find yourselves sitting on incredibly valuable assets. And I fully understand why you would want to take advantage of the fact that there are a small number of acquisitive companies with very deep pockets roaming the market splashing out huge sums of money for small chains.
But what happens when this feeding frenzy ends and the takeover of convenience is complete? Will there be any sizeable independents left? Will the independent retail scene be as vibrant and diverse as it is today? Will we see entrepreneurs building up businesses to replace the likes of Bells, Jacksons and Morning, Noon & Night?
I’m enough of an optimist to believe the answer to all these questions is “yes”. But I am also enough of a realist to understand that it is going to be even harder for those that remain to compete - both for customers and for new stores (after all, how many independents can afford to shell out £500k+ for an outlet?). Many will stop trying to compete; many will be forced out of business. But Sainsbury’s Jim McCarthy is scathing about those who argue that the aggressive moves by the big grocers into convenience will ultimately restrict consumer choice. He tells us: “There are still 55,000 independents. The consumer has a massive choice.”
The question is: for how much longer will they have that choice? It’s a question the Office of Fair Trading should start trying to answer. Before it’s too late.
It’s £1.25bn - and counting
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