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knog
Nov 26, 2009

Lost in the supermarket?

Are small businesses being swamped by supermarkets? Or do they manage to hold their own in terms of customer service and quality products?

Are small businesses being swamped by supermarkets? Or do they manage to hold their own in terms of customer service and quality products? John Bensalhia looks at both sides of the story

Wandering around the supermarket, it’s the usual rigmarole. Tin of baked beans? Check. Tub of margarine? Check. Sports bike? Football shirt? Hold on…

That’s right, supermarkets have branched out into the field of sports business. Seems that you can’t go around one of the larger supermarkets without bumping into one of the latest sports products on the shelf. Click on one of the big supermarket websites - for example, Tesco or Asda - and there are multiple items to choose from. Bicycles, footballs, clothing, equipment - it’s all there, and normally at very competitive prices.

But if supermarkets are selling more sports products, where does this leave the independent sports retailer? It’s much the same story as with any other smaller business trying to keep up with the big names. And that story, in some cases, doesn’t have a happy ending.

CLOSURES
A study made between 1997 and 2002 claimed that around 13,000 specialist stores across the UK closed. A more sobering thought is that a report from Manchester Metropolitan University suggests that at the current rate of local shops’ demise, by 2050 there won’t be any independent retailers left. And even by 2015, many smaller shops will have stopped trading.

The All Party Parliamentary Group for Small Shops said that supermarkets were making smaller shops more vulnerable to closure. Philip Hollobone, MP for Kettering, said that smaller shops were worried that they would not be able to compete.

He said: “As consumers, we may be benefiting in the short term from the low prices and the attractive offer that supermarkets can present to us, but in 10, 15, 20 years’ time the prices we pay for our supermarket goods may actually be rather higher than we would wish.”

In response to this, the British Retail Consortium replied by saying that customers were retaliating to customer demand. Kevin Hawkins, the then director general, said: “The secret of success for the small retailer is to offer consumers something different, something better and something targeted very precisely at a particular portion of the market.”

By contrast, there has been a boom in supermarkets, which have, against all odds, beaten the recession. In 2008, people spent £113billion at the checkouts at supermarkets including Asda, Sainsbury’s, Tesco and Morrisons. From a customer’s point of view, in one sense supermarkets have the upper hand because there are more in the area and they’re open longer.

However, there has been some contention in the past between supermarkets and sporting goods manufacturers. For example, in 2007 makers of replica football shirts took steps to discourage supermarkets from stocking their products. Nike introduced a list of criteria that retailers that wanted to stock its products had to meet. These rules included Nike having the right to approve fixtures and fittings displayed in areas ‘which are distinctly separate and differentiated from fixtures displaying different types of product’.

This makes it problematic for supermarkets, since it is difficult to avoid putting these products near other types of goods. Nike argued that the sale of its products needed to comply with the minimum quality standards in order to enable customers to make purchases in an appropriate retail environment.

FOR AND AGAINST
What are the cases for and against supermarket shopping over smaller shops? The top three benefits of supermarkets are convenience, price and choice. The latter benefit is a double-headed one. Not only do you have greater choice of goods in any field, you also have a number of supermarkets to choose from. There’s at least one in every big town that stocks goods other than food, and it’s a fair bet that these will include some type of sporting product. The mainstream presence of the supermarket means that this is a convenient way of finding a casual product, which you might need in a hurry or want at a competitive price.

Customer service is, however, definitely one factor that will make customers decide to choose between the two. For example, say you are ordering a sports product that is slightly harder to come by. A supermarket may possibly be able to order it, but there’s a good chance it won’t be in stock. Because supermarkets cater for the mass market, sports products stocked will only be the most popular in the range, because there isn’t enough room to accommodate a large enough range of products.

However, smaller businesses should be able to find the right product for you, since they will be specialists in the field. The chances are that they may even have the product that you want in the first place! Customer service in the smaller shop should also be far superior to the supermarket, since the person in charge will have a greater knowledge of the product.

CUSTOMER VIEW
But what of the customers themselves? Which option would they plump for? Speaking to people in Sussex, it’s clear that they represent a cross-sample of views. Robert Laurimore felt that the specialist shop had the edge because of excellent customer service. “I live near a local sports shop, it isn’t as big as the supermarkets but the service is excellent,” he says. “Very friendly and they can always order whatever you want if they don’t have the product in stock.”

Frances Robinson agreed, pointing out that staff had excellent training: “They are so knowledgeable about different products in sports shops; they have all the knowledge that will help their customers get the best from their shopping experience.”

Bernard Walters suggested that supermarkets could not possibly have the same advantage because of this factor: “It’s not so easy for supermarkets to have such in-depth knowledge because their staff are not trained in such minute detail as they are in specialist shops, so I think it’s an unfair comparison.”

David Price thought that supermarkets received a fairly bad press when compared with smaller businesses. “I think it’s great that you can get such good value products in some of these supermarkets,” he explains. “Smaller businesses may charge more because they are trying to make some profit for themselves. But you can get some fantastic products in supermarkets which anyone can enjoy.”

Pamela Rogers said that when it came to convenience, supermarkets had the upper hand: “I needed a football for my son at quite short notice, and luckily my local supermarket came up trumps with one It was excellent quality and at a really good price.”

She acknowledged, though, that independent shops were better for specialist products and detailed knowledge: “Specialist shops are ideal for in-depth knowledge. Customer service is also very good there, because I have used that sort of shop before. They know exactly what it is you are after, even if you think it is some never-heard-of-before product.”

Christopher Baxter sums up the difference nicely: “At the end of the day, you pay your money and you take your choice. If you want a quick, easy purchase, go to one of the larger supermarkets. If you want something that extra bit special with that extra bit special service, go to an independent shop.”

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