Run a successful independent store and the chances are a big chain will have its eye on your patch. Joanne Grew looks at the efforts one high-profile indie has gone to in an attempt to fend off a bigger rival

On the morning of 8 October, Crouch End a bustling North London community welcomed a new retailer into the fold: Waitrose.

It was a moment you'd think Andrew Thornton, owner of a 9,000 sq ft Budgens just a few doors down, would have been dreading. His high-end store, after all, caters for "celebrities, journalists and lots of influential people" just the sort of people who'd typically shop in a Waitrose.

But not at all. Having already held his own against an M&S and a Tesco Express (which underwent a refurbishment programme in September in anticipation of the new Waitrose store), Thornton has come out all guns blazing since the news of the new arrival broke.

Like Tesco, he has given his store a revamp. And at the end of last month, he attempted to seize the moral high ground with an audacious campaign attacking the supermarket banana price wars. Now, six weeks after the shiny new 6,230 sq ft store opened, he's confident he will be on the winning side in the battle of independents against multiples in Crouch End.

"We are fighting Waitrose the same way we fought off the other multiples by focusing on what we are good at," he says.

Fortunately, Thornton is good at quite a lot. Known for trailblazing ideas such as charging for plastic carrier bags and offering extensive recycling facilities, as well as a dedication to sourcing from local suppiers, he has also worked hard to mobilise other local independents to the cause. Last year, he co-founded the Crouch End Project, a scheme involving more than 50 independents, restaurants and bars who raise their profiles and encourage local shopping through initiatives such as a discount card scheme and late-night shopping.

Keen prices are another key weapon in his armoury. "The great beauty of the Musgrave Budgens model is that it is a franchise and I am able to do what's right for the area I operate in," he explains. "The model works very well. It gives us the buying power to offer the basics such as ketchup at competitive prices. We price match Tesco on 350 lines every week. If I was purely independent, I would struggle to be so competitive."

As well as making sure his store is ready for battle revamping its fascia, relaunching its delivery service, introducing a party service and installing new butchery and self-service counters Thornton has also waged war on the PR front. Last month, he launched Play Fair Trade Fair, a campaign that will donate all profits from banana sales in his stores this month to a Costa Rican plantation workers' organisation. Thornton believes initiatives such as these keep his suppliers on side.

"The banana campaign is completely consistent with the approach we have always taken, which is about trying to work in a sensible way with producers," he says. "The way the major supermarkets screw suppliers is completely unacceptable, in my mind."

Thornton's recourse to strong language is understandable. Waitrose and Asda have now joined Tesco, Sainsbury's in the hunt for smaller, if not strictly speaking convenience, stores. With the demise of Woolworths and The Co-operative Group's great store sell-off, there have been plenty of opportunities to make incursions into independent territory bad news for a sector that has already seen its numbers dwindle from 37,448 to 35,534 this year, according to the latest ACS figures.

Waitrose is a particularly formidable opponent as far as Thornton's Budgens is concerned appealing, as it does, to a similar demographic. The new store, which is located in a bright, airy former Woolies, boasts a cheese and traiteur counter, freshly baked bread, a 'time of day' counter, a large range of fresh foods as well as kosher and free-from ranges.

"We have wanted to get into this area for a long time, as the demographic is the perfect fit for Waitrose," says Waitrose store manager Steve Hart. "Some loyal Waitrose shoppers have started using the store for a top-up shop in the week and the larger Holloway Road and Finchley stores for a weekly shop at weekends, which is what we want."

Unsurprisingly, Hart rejects suggestions Waitrose is going to put independents out of business, pointing out that he deliberately did not install meat and fish counters for this reason and adding that he is keen to join the Crouch End Project.

The Guild of Fine Food MD Bob Farrand is not convinced, however. "The multiples claim they will help the area and bring new jobs, but what proportion of those positions will be created from the local community? They tend to bring in senior managers already employed within their businesses because they need a lot of experience," he says. "Also, people only have a limited amount of money. The arrival of a multiple screws up the local economy."

The locals will be the test of that, of course, and so far the reaction to Waitrose's arrival has been decidedly mixed.

Local resident Colin Wreath is not impressed. "It's disgraceful. If people start shopping at Waitrose at the expense of the independents, it will force them out of business," he says, adding that he makes a point of buying meat from the independent butcher, bread from the bakers and everyday essentials from Budgens.

Other shoppers, however, are pleased that there's a new retailer in town. Retired Suzanne Heath has been venturing to Waitrose since it opened because of the prepared meals and desserts on offer. Lillian Mweso admits she too has visited the store, though she insists she'll stick to Budgens for big shops "because that's where I've always shopped".

Waitrose is keeping its sales figures and targets to itself, but Shore Capital head of research Clive Black says London's relatively paucity of food stores mean sales densities at Waitrose could top £30 per sq ft per week, equating to over £10m a year.

So far, Budgens appears to be more than holding its own. Between his Crouch End store and his second Budgens in Belsize Park, Thornton turned over £17.2m in the year to September 2008 and six weeks after Waitrose opened, Thornton claims the drop in footfall was much less than expected and is now heading back to its pre-Waitrose levels of about 20,000+ a week.

But it will be some months yet before a clear picture starts to emerge of the impact of Waitrose on the independents in town.

In the meantime, the battle of Crouch End rages on.