We had an excellent seminar this morning exploring the idea of ‘community retail’ with a range of experts and also colleagues from ASDA. The supermarket chain tells a powerful story about its intention to make stores community hubs, a story given weight by the employment of part time community life champions in every store and its commitment to open up its property to free community use. ASDA HQ had expected the free space offer to lead to about 7,000 community uses over the first few months. In fact, and perhaps reflecting the closure of many publicly funded facilities, over 21,000 community groups – from bee keepers to the victims of domestic violence -have availed themselves of free spaces.
Also, to ASDA’s credit is their willingness to work with the RSA to undertake a robust evaluation of their work and to identify the challenges involved in taking their approach to the point of redefining the relationship between supermarkets and communities.
In the discussion this morning there was praise for ASDA – including from Civil Society Minister Nick Hurd (who has kindly agreed to be on the advisory group for the project) – but also the Minister and several others weren’t afraid to ask tough questions about the impact of supermarkets on local traders and the distinctiveness of town centres.
ASDA don’t operate neighbourhood supermarkets but the conversation put me in mind of a point I have meaning to make for some time.
In my neighbourhood in Clapham the long running attempt to stop Sainsbury from locating a store in the local shopping parade was recently defeated. Predictably, the new shop is having a demonstrable effect on the competing local businesses including a newsagent, an off licence and a corner shop grocer. The last of these is making a small but unconvincing attempt to diversify by expanding its range of flowers and plants. Judging by their quality and cost, I suspect it will not succeed.
There is no need for local supermarkets to kill off other business. Indeed, the latest data suggests quite a lot of the local trade is redirected from larger supermarkets as people plump for just in time shopping and avoid expensive car use. But for those shops competing directly on basic groceries, the prospects after Tesco or Sainsbury have landed are bleak. Moreover just a couple of empty shop fronts can have a cooling effect on other businesses.
Yet – and this is my point - Sainsbury and Tesco (and other chains that do local supermarkets) must by now have a very good idea of which local businesses suffer, and which thrive, after the nationals have landed. So, why don’t the stores soften the blow and also potentially reduce local opposition by offering a consultancy and investment service to local businesses? In the case of the failing grocer near me, Sainsbury could, as soon as they got planning permission, advises the owner that while no grocer can compete on the basics, they could grow their business by attracting new footfall to a more specialist offer such as a florist, bakery, cake shop or butcher.
I am not suggesting that all grocers would want to adapt or have the capacity to do so, but the national chain could make a very significant offer comprising:
Advice and training
An interest free loan or investment
Some joint local marketing
A promise not to expand its own local offering in the chosen area of specialism
With all this, surely. from what might have appeared a threat, many new opportunities for retailers and offers for shoppers might emerge?
It is possible that something like this exists already but I have never heard of it and there is no sign of it in my localities. Indeed, I suspect that apart from simple lack of concern and imagination, the stumbling block might be that the nationals don’t want even implicitly to admit that their arrival has a terminal impact on directly competing outlets.
So, tell me, is this a crazy idea? If not, I might just drop Tesco and Sainsbury a line.