challenging market forces
Generally speaking, when a new retail business decides to make its home in your town it is a cause for celebration. Towns all over the country are concerned about the increasing numbers of vacant commercial units. Finding a winning formula to filling these with commercial tenants is the “holy grail”.
In recent years, everything from inward investment packs to temporary community uses and arts venues have been introduced in an effort to reduce vacancies. You would be forgiven for thinking that running a retail business is not high up on the list of aspirations. Surprisingly however, the retail sector accounts for one of the highest percentages of new business start-ups.
When your vacancy rate is relatively low you can afford to reserve judgement. Strictly speaking, unless a new retail business requires a change of use, through the planning process, to enable it to take on a commercial unit in the town centre, there is little that can be done centrally to influence whether or not it arrives in town. Few town centres have any significant grant schemes so most financial incentives must be negotiated with a prospective landlord. The rest is about flagging up commercial opportunity and a potential gap in the market.
So what should be the approach when a new business directly challenges an established independent outlet?
An impartial observer would suggest that market forces will out and that the market will decide. Customer loyalty will be tested. There will be an initial period of curiosity and then on-going success will depend on several factors that include price, customer-service and product range.
This observer would also suggest that if both businesses survive they will be stronger for the competition. In addition, the competition might actually increase the collective spend on that type of good rather than split an existing market share into smaller parcels.
Henley now has two specialist sweet shops, Little Nellie’s in Friday Street and the recent addition of Mr Simms in Reading Road. Both are independent businesses, the latter with a franchised name and brand.
The confectionery market is buoyant. As a context here are some of the statistics…
o The confectionery market in the UK is now worth approximately £5.5bn (Mintel)
o In 2009 the average household spent £52.20 per week on food and non-alcoholic drink purchases. Of this, £2.20 was spent on chocolate and confectionery (ONS)
o In an article in the Daily Mail in June 2010 it was stated that the annual spending on confectionery for children in the UK was £372 (Datamonitor)
Having spoken to both recently, it is clear that there is a lot at stake. We would suggest that you investigate both and make a judgement for yourself. Whatever your sweet fetish might be, it can be satisfied by one or both. Sugar-free sweets, party bags, chocolate, sour or liquorice – its all there, and if you are old enough will remind you of old favourites.
I remember, when I was little, being allowed to choose a bag of sweets as a weekend treat when my father bought the papers and trying to eek it out for as long as possible. It is so much more exciting going to a dedicated sweet shop than a supermarket, even for the smell. Just don’t tell the children!