Big supermarkets are their own worst enemy?
Poor old big supermarkets eh? The sad retail giants have been undercut by cheaper German competitors and ex-Nation's fave Tesco has got itself in a whole heap of trouble. However, a new report from property agents CBRE suggests that the problem could have been exacerbated by the supermarkets themselves, effectively shooting themselves in the foot by opening so many smaller ‘convenience’ sized stores.
In its latest report on store opening figures, CBRE states that while Aldi and Lidl have trebled in size since 1998, this growth is "not sufficient to explain the sudden contraction in the big four’s share of grocery sales following 2011". Instead, the firm suggests that it is the proliferation of smaller stores- your Tesco Express, Sainsbury's Local and M Local type stores- that have had a whacking impact. Since 1996, the number of convenience stores run by the "big four" has also trebled.
What's making the problem worse is that shopper’s habits have changed, as pinpointed by Waitrose MD Mark Price, who recently said that the weekly shop was now a “thing of the past”. He presciently identified that the changes in shopping habits are “more fundamental” than the growth of the discounters.
Mr Price said last month: “People are buying food for now. The notion that you are going to go and push a trolley around for the week is a thing of the past. It is fundamentally changing the market."
And therein lies the rub. By spawning hundreds of convenience stores all over everywhere, the big supermarkets have got us all used to buying little and often, rather than all at once, which then allows us more autonomy to shop around for the best prices. No one convenience store will have the full range of a Tesco or Sainsbury’s vegetable section, for example, but if we’re going more often, we can get what we want piecemeal.
And that was the major advantage the big boys had over the German pretenders. At first, no-one would do their ‘big shop’ at Aldi, because you couldn’t buy everything you wanted in that one shop. But if you are not doing just one shop anymore, why not buy the things you need from the cheapest outlet?
So is this the end for big hypermarkets? We’ll have to wait and see, but if the pundits are right about changing shopping behaviour, it could be a hard slog for those bigger retailers. After all, how many of you (or your husband/wife/partner/mother/significant other) still do a big, once weekly shop?