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The death of the superstore

Chris Turnbull

The death of the superstore

There’s been a lot of talk recently about the ‘death of the High Street’ caused, in part, by the growth of out of town shopping centres and large format retailers.

For as long as I’ve been working there seems to have been an exponential growth of large format retailers such as the supermarkets, DIY sheds, electrical retailers and other out-of-town mainstays.  Aided by extensive PR peddling the ’big is best’ myth, untold pressure on local councils through extensive public relations, lobbying and, as a last resort, infrastructure incentives (new swimming pool for the town, Councillor?) and my personal favourite, the ‘creation of hundreds of new jobs for the area’ (ignoring the effect on other businesses), large store retailers’ growth has been unabated for the past three decades.

Until, it seems, now.

Last week Tesco announced its worst results in the UK for over 20 years; today, Wickes announced a 1.2% drop in same store sales including an eye-watering 12% dip in kitchen and bathroom sales.  In the meantime, smaller convenience stores are the fastest-growing sector of the grocery market and an independent kitchen specialist (i.e. us!) is on course to quadruple our turnover this year versus last!

And you really don’t have to look too hard as to why.

I genuinely believe consumers have become savvier and are less taken in by the PR machines of big retailers with, perhaps, a genuine nostalgic desire for the simplicity and friendliness of the local retailers of their childhoods.

As a result many consumers are either remembering (or increasingly recognising) that the price of something is only one element of its value and what they can get for it.  And this isn’t necessarily just more product or service – increasingly it’s intangibles such as more time (“I don’t want to queue in this superstore on a Saturday when I could be spending quality time with the kids”) or the recognition that buying well in the first place (such as a quality new kitchen) is going to save them time, money and stress in the long –term through not having to go through the same project again in three to five year’s time.

And as much as the large format retailers like to pretend they can offer these benefits to customers, they truly can’t and customers are voting with their feet – hence the example results outlined above.

So are large format stores dying?  For some, the answer’s definitely yes.  During the course of this year famous names that traded from large store formats such as Habitat, Moben and Dolphin’s owner Homeform, Focus and TJ Hughes have all disappeared because they were unable to meet this changing consumer need.  However, as Tesco’s and Wickes’ results show, even the biggest aren’t immune to this change.

It remains to be seen whether the death of large format retailers is a consumer trend or just the natural falling by the wayside of expensive, unsustainable business models.

But it should give hope to well-run smaller companies like us who are dedicated to offering value throughout our proposition (not forgetting price in these difficult times) that there’s business to be captured from an ever-changing, savvier consumer looking for true value.

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