The harsh reality of modern convenience retailing in a continually consolidating industry is that going it alone as an unaffiliated independent looks increasingly like an impossible task. Rocketing costs and an unprecedented level of competition mean that the case for joining a symbol group or franchise has never been stronger – but the good news is that 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. Toughing it out as an unaffiliated independent is increasingly looking like an unsustainable option as market consolidation continues to rattle along at pace, giving more and more retailers access to much larger buying power and all the benefits that come with being part of a larger organisation.
One of the few proven ways of combating that threat is by becoming part of something bigger yourself and the easiest way of doing that is by considering a symbol, fascia or franchise option. It’s an attractive proposition, allowing retailers to retain the bulk of their independence yet giving them the many benefits of being part of a nationwide collective of like-minded retailers with access to big buying power and the many invaluable support mechanisms that membership of a symbol group brings.
The continually rising minimum wage, huge increases in rates and ballooning compliance costs across the board mean that for many the time may now be right to consider a fresh start by teaming-up with one of the many options available. In this feature, we will consider those options and offer you all the information you need to make an informed choice about which partner to choose.
Many have already followed that particular path. Symbol groups grew 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. Each partner has its own particular strengths, but they all offer 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 a retailer 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 knowledge, 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 application. This information, when backed by the weight of a symbol brand, can add an influential supporting voice to any finance application.
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.