Wednesday 11 November 2009

‘The arrival of Tesco has forced us to reinvent ourselves’

When the original planning application for a Tesco supermarket in Scotland’s first Food Town, Castle Douglas, became public in 2004, there was a flood of angst-ridden comment from residents and local politicians alike, fearing that the town's unique designation would be shattered, and its tourist trade along with it.
However, pro-active local retailers that focused on adapting their business to the competition from Tesco have thrived as a result.On the face of it, the one-street town is still thriving: there are four butchers, two bakers, one greengrocer, three delicatessens, a sweetie shop and several cafes dotted down the historic thoroughfare of King Street. Every Tuesday and Friday, there is Wyllie McCulloch’s fresh fish stall Ferry Fish, which has been in the same spot for 25 years selling wild sea bass, North Sea haddock and west coast scallops, lobster and monkfish straight from the boats fishing the waters off Whithorn.

By accident or design, the successful retailers have applied Ken Stone's classic principles in competing with major multiples that have opened nearby:
Competing with the multiples locally
  • Businesses that sell goods or services other than those sold by the multiples, tend to experience higher sales because of the spillover effect. The additional traffic attracted by the multiple will shop at these stores. (i.e. Aldi in US)
  • Businesses that sell the same goods as the multiples tend to experience reductions in sales after a multiple branch opens locally
  • Be prepared to make changes (re-invent yourself)
  • Take proactive action, anticipate a period of declining sales and prepare both a short- and long-term business plan
  • Identify market niches that aren't currently filled
  • Improve level of customer service
  • Carefully evaluate ability to compete on price and avoid trying ‘head-on’
Not rocket-science, but then good shopkeeping is simply about doing basic things very, very well.....ask Tesco!

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