With the cost of doing business rising relentlessly for local retailers and the market far from buoyant, the case for joining a fascia group or franchise has arguably never been stronger, and the choice has never been wider.
For many independent local retailers in Scotland these days, the choice is less whether to join a fascia group or franchise and more about which one to join. Battling it out alone as an unaffiliated independent is unquestionably getting tougher and tougher as every year rolls by – and with the increasing likelihood of the likes of Tesco, Morrisons and Sainsbury’s joining the fray in a variety of manners, life only looks set to get even more competitive.
The continually rising minimum wage, huge increases in rates and ballooning compliance costs across the board mean that for many the only option is to gain the support that comes from being part of a buying group of some shape or form.
The stats bear this argument out: according to the 2016 Local Shop Report, the UK’s 15,100 symbol group stores generated £14.2bn in sales in 2016. The 19,100 non-affiliated independent convenience stores managed less than half of this figure, generating £6.3bn in sales over the same period.
Symbol groups have grown their share of the convenience-store market from 22% in 2002 to almost 40% in 2012. According to IGD data, this could rise to 50% by 2020.
Whether you are considering joining one of these groups for the first time, or are considering moving from one to another, this guide will provide you with the key data you need to make a fully-informed decision as to which fascia is right for you.
The great news is that the range of choices available has never been greater. As well as the traditional symbol and fascia groups like Premier, Nisa, Londis, Costcutter and Landmark, there are newer franchise models available from the likes of Subway and The Post Office.
Each has its own particular strengths, but one thing that they all offer is buying power, a household name above the door and a comprehensive support network covering everything a retailer needs to remain competitive in today’s retail environment.
Choosing a symbol group can seem an intimidating task. It is a big commitment, especially if you are already tied into a contract or faced with joining fees – whether this is in the form of an admin charge, buying shares or paying for signage or delivery. But there is no doubt it can pay huge dividends.
How to decide which symbol group is right for you will ultimately depend on your shoppers and what they want you to offer them. It might come down to the kind of store standards you are prepared to meet and the ways of working. If, for example, you are simply looking for a way of running promotions effectively then you might want to consider joining a cash & carry-based symbol group where you would normally go into depot and pick up the goods yourself.
The pros for retailers considering joining or switching symbol groups are numerous, not least because of the support a fascia can offer in every aspect of running your convenience store, from exclusive discounts and buying power to staff training, running a social media page and availability of new technologies.
Being part of a symbol group gives you the backing and the know-how – from promotions to posters and displays – along with the merchandising system and product knowledge to help make your business a success.
Groups will send several reps and provide supplier contacts. They can offer an in-depth analysis of what you should stock, where you should stock it and how much you should be making.
The support and advice that is given regarding store development should soothe shop owners who are nervous of change, and groups may introduce their own recommended shopfitter to assist with project planning and store layout.
Many also have their own consultants who can do detailed reports on potential or increased turnover.
These can be simple or very detailed, taking into account the demographic area around the shop and local competition. Sometimes there will be a fee, but it may be worth the cost as often it gives additional industry-specific information that will support any finance application. This information, when backed by a symbol brand, can add an influential supporting voice when talking to your bank manager.
Retailers should ask themselves whether remaining unaffiliated is detrimental to their potential as a business. Whatever level you decide to go in at, it is best to do your research before determining which symbol group is right for you.