The advance of the multiples into symbol territory continues, but there is still growth in the sector. The ultimate winners are shoppers who see better quality and more competition on the high street. So what can symbols do to capture that market, and persuade retailers to join their group?
by Émer O’Toole
There are over 15,000 shops trading under symbol branding in the UK, according to the new Local Shop Report. In Scotland, sales in symbol stores continue to outperform unaffiliated stores. SLR’s guide to joining a symbol store in 2017 examines the main category strengths of groups, and compares year on year performance.
The ‘symbol’ groups are predominantly groups of independent retailers trading under a common customer facing brand – familiar symbol group brands include Spar, Londis, Nisa Local, Premier and Best-One. In the UK, independent retailers (non-affiliated and symbol) continue to make the biggest contribution to the overall sales of the sector, in addition to having the highest number of stores by a significant margin.
By 2020 IGD predicts that the convenience market will be worth a staggering £44.1bn – that’s a growth of 17%. While this is a prediction, there’s no doubting the growth of the sector over the last five years: between 2010-15 the value of convenience grew 27.4% and is currently worth £37.7bn. Is it any wonder more retailers are looking at how they can grow their business?
For several years symbol stores including those run under the fascias noted above, and also others such as Costcutter, Day-Today, and Keystore, have formed one of UK’s food and drink retail success stories. However, the retail environment is always changing. The supermarket giants – especially Tesco and Sainsbury’s in the last few years in Scotland’s major cities and towns – are moving into the c-store retailing space with a vengeance.
For retailers who are currently not part of a symbol group, there are huge advantages to getting affiliated. Likewise, for retailers who are currently with one group, there has never been a better time to shop around. The most recent IGD figures show that there are 15,423 symbol stores in the UK in 2015, up 1.6% on the previous year, while unaffiliated stores are down 0.7% to 18,507. While the discounters grow market share and supermarkets expand into the convenience space, independent retailers are becoming more reliant on their wholesalers and the symbol offerings they provide.
Much work has been done in recent years by the country’s symbol groups to improve their offer, to make it more appealing for both retailers and consumers. Operating a convenience store in this modern world is about embracing new, innovative solutions – from category management, to mission shopping, technological advancements and energy efficiency.
The last couple of years has seen diversification within the sector, with many groups now offering multiple options to retailers depending on their store’s demographic and size. The premium My Costcutter from Costcutter Convenience Stores being one example, while at the other end Booker’s Family Shopper has managed to blur the lines between c-store, discounter and pound shop. The market has also been shaken up by franchises. The launch of One Stop in Scotland has created an option that was never previously available, and so competition intensifies. One Stop has launched nine stores in Scotland over the last year. The Tesco subsidiary has opened company-owned and franchise stores, which gives independent retailers an entirely new concept. With huge buying power and insight into shopper habits, One Stop is set to grow in Scotland.
In the 12 months to April 2015 the convenience market generated £37.7bn in sales in the UK. This represents a year-on-year increase of 5.1%. Convenience is set to be one of the fastest areas of growth in the grocery industry over the next five years and symbol groups would argue that for any retailer to take full advantage of this growth, the support on hand from a symbol group is a must.
This guide to what fascias and franchise operations have to offer is an ideal introduction to what is out there. For retailers looking to join a symbol group, the following pages will provide you with an extensive overview of options from many of the major groups.
With one in every three c-stores being a part of a symbol group, the trend is growing, and 2017 is the ideal time to get affiliated.