Super Thursday?

Last Thursday was dubbed Super Thursday by a number of analysts due to the sheer volume of results, trading updates and other news expected from retail companies. It did not disappoint in that Morrisons sold off their convenience stores and continued a sector trend by closing other stores (11 in this case). They also produced poor trading figures; as did more surprisingly Waitrose. Coming hot on the heels of Tesco exiting Korea, and together these data showed the multiple food sector as being under increasing strain.

One of the oft-cited reasons for these structural alterations to the sector has been the rise of the discounter sector generally and Aldi and Lidl in particular. Which is one reason why I spent my version of Super Thursday in the company of 50 or so Scottish small, local and convenience grocers and some of their suppliers checking out the competition at this end of the market.

Last March the Scottish Grocers Federation hosted an event on responding to large store competition. Last Thursday’s focus on discounters was its companion, but this time in the form of a study tour. Six stores in and around Musselburgh were the focus of the day, with delegates asked to discuss and comment on the strengths, weaknesses and surprises of Aldi, Lidl, Iceland, Poundland, B&M and Poundstretcher. Musselburgh itself has all these (and more) in close proximity and, as our USP tool points out, is itself an interesting place with numerous strengths and interactions but quite a few weaknesses (check out your preconceptions here).

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More detailed work is needed on the data collected and this will form material for the SGF annual conference in late October, but some key themes from the discussion can be identified here:

  • Aldi and Lidl were good quality, highly impressive stores which had a clear strategic focus and good operating standards. Their ‘Scottishness’ shone through, which came as a surprise to many;
  • Poundland likewise had a clear focus, was well managed and run and did exactly what it said it did. The online entry of recent weeks was a talking point, but without any conclusions this early;
  • B&M and Poundstretcher were disappointments in many ways. Perhaps not the best examples of these businesses, they failed to convince the delegates, though the Post Office in Poundstretcher was much debated;
  • Iceland split the delegates to an extent, with many sensing a lack of coherence and focus, but others liking the range and standards.

The purpose of the day was to see what the competition at this end of the market was up to, and perhaps see if any lessons could be identified and learned for local and smaller grocers. For some, this was the first time they had been ‘up close and personal’ with the likes of Aldi and Lidl and the quality, focus and standards came as a surprise. For others the message was about understanding the consumer from their point of view and not making assumptions about what consumers want and what works. Consumers have been increasingly interested in, and frequenting, discounters (both food and mainly non-food, though all these retailers had some convenience items) and they are clearly having an impact in the sector, and not only at the multiple end of the market.

Fifty plus people produced lots of views, discussion and debate, as well as taking some personal and store level lessons away. Being able and willing to spend time in this way is a privilege and helps cement the SGF as seeking to improve its members’ communications and standards. Not all competition needs to be feared but it needs to be understood, the best of it embraced and reactions and responses that meet customers needs put in place. It is not about copying the competition, but understanding and challenging them.

About Leigh Sparks

I am Professor of Retail Studies at the Institute for Retail Studies, University of Stirling, where I research and teach aspects of retailing and retail supply chains, alongside various colleagues. I am Chair of Scotland's Towns Partnership. I am also a Deputy Principal of the University, with responsibility for Education and Students and a Fellow of the Royal Society of Edinburgh
This entry was posted in Aldi, Competition, Convenience stores, Discounters, Discounts, Food Retailing, Lidl, Local Retailers, Multichannel, Places, Post Offices, Pound Shops, Poundland, Scottish Grocers Federation, Understanding Scottish Places, USP and tagged , , , , , , , , , . Bookmark the permalink.

2 Responses to Super Thursday?

  1. Pingback: Musselburgh, the Scottish Grocers Federation and the Scottish Local Shop Report 2015 | Stirlingretail

  2. Pingback: Boldly Going to the Borders | Stirlingretail

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