Summary

The market share of large retailers has improved over the past two decades.  This bigger scale has resulted in enlarged buyer clout for large retailers, which in turn has led to large retailers being able to sell goods at lower prices than small retailers in many occasions. In addition, small retailers have observed their former comparative edge with respect to both location and opening hours eaten away by large retailers (in particular grocery retailers), for instance by large retailers moving into small format stores in high street locations and increasing their operating hours. Whilst such changes can be worrying for the small retailers concerned, for the most part these changes are a consequence of market forces and on the basis of economic effectiveness should not be thwarted by government.

While the expenses of working in London, as compared to the rest of the country, are excessive for all retailers, there are some expenses that impact particularly on small retailers. The price of crime appears to fall more heavily on retail as compared to other sectors and on London as compared to other areas. Into the bargain, the costs of acting in accordance with Government regulations, for example the Disability Discrimination Act fall excessively on small retailers. Local authorities and other bodies such as chambers of commerce or trade organization could provide support and/or counsel to small retailers on observance with regulations in order to reduce the costs of putting into practice the legislation.

Customers’ admission to retail outlets is an concern for all retailers in London, though some of the issues of admission affect small retailers more intensely than large retailers. This is because large retailers can extend the cost of disturbance to customer accessibility over a bigger level of sales, (normally across a greater number of stores) when compared to small retailers. consequently it is imperative that changes to streetscapes or changes to transport in London consider the impact on small retailers who are prone to be unreasonably affected by any changes, in order to contact a more ‘small-retailer friendly’ answer. The problems outlined in this working paper, and exact issues such as succession, have led to a number of closures of retail businesses. However there are a number of methods through which small retailers can contend more successfully, for instance by forming buying groups, contending on the quality of service they provide or by specializing.

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Management of absence

We all know how much nonattendance costs a company. Though, many businesses large and small simply bear employees who are time and again absent. Several large organizations fail to mange this problem efficiently and constantly.

An effective management policy could works like this. When a worker is not in attendance, on their return their nonattendance percentage over the preceding 6 months is calculated. If they have been not in attendance for over 3% of their contracted hours or have been off three times or more they will be asked to attend an investigatory meeting. At the meeting they will be ased about the cause for nonattendance, and if there are no extenuating circumstances, this meeting will move to a punitive meeting where they may be given a warning. The worker may also be offered assistance if they have a severe setback and this may result in a change of shifts or role for instance.

The consequence of this course of action is that those employees who feels like `chuck a sickie` either decides against it or ultimately get managed out of the company.

This course of action would be easy and effectual for a small business to use and the benefits for a small business are greater as non-attendance in a small business is much more destructive.

“If something isn’t working – change it or stop it.”
Successful organizations don’t procrastinate. When a new course of action, process, or merchandise are introduced and are knotty, they are quickly altered or removed. They are not frightened to say ‘ok, we tried this, its not working, so we are changing it or removing it’. Too many businesses will keep a problem under wraps and accumulate costs in lost productivity or sales as a consequence.

Listen to and observe your customers.
How many companies really care about their customers? Many people take for granted that if they can’t find what they want at a retailer then that’s it. However, successful stores should alter their range if customers want products they do not stock. Obviously if a product is introduced at the request of customers and it is not successful, it will be removed, but usually the product will validate its shelf space. What it means to watch your customers is watch their habits and trends. Of course retailers such as Tesco have a huge system which performs this for them. However most EPOS systems will follow average transaction values, number of items purchased etc. What Tesco does principally well is act upon the inclination their database shows them. For example, they are aware that customers who buy diapers also buy more beer! This is due to the fact that Dad has decreased his visits to the pub since his baby was born and now drinks at home. It is not feasible for small business to invest millions on state of the art systems, but actively inspecting what customers purchase, with what products, and what time of day may create some opportunities.

Recognize your competitors and respond quickly
Large retailers are good at this. They observe competitor activity very strongly and will do all they can to beat or match prices. They think of their competition as the large stores and, with respect, aren’t paying attention in proprietors or even the retailers who may be familiar in a local area. This offers some opportunities for smaller firms. They should observe their local Tesco (or other big supermarket) and you will become aware of the trends in their promotions. For instance, Tesco promotions last for 4 weeks long and alter on Tuesdays. Their point of sale tells you when a promotion finishes and more often than not they keep to these end dates. However, smaller retailers have responded with similar promotions to Tesco probably they believe that is the only way to them. For example, if Tesco are running a BOGOF on Nescafe at £1.99 a jar, he will run advertising on Nescafe which reduces the price from £2.50 to £1.75. This can be bettered by examining the end date of the Tesco promotion and start the particular promotion then. If a business is smart it will observe that the Tesco promotions are very conventional and it can time its offers to pick up business at an appropriate time, rather than compete with something that cannot be sustained.

Introduce your store to Tesco staff
A representative Tesco store will provide work for from about 20 in a small express to about 1000 or more in a larger extra store. The standard for a superstore is roughly 350. With the exemption of some of the managers, all of these employees will live in the area and know several of their customers. If the staff  are aware of your store they will be able to recommend it to their customers and provide them with an idea of what products you have. The employees are inquired every day if Tesco have a particular product and on hearing no, customers ask where they can find it. By introducing a small firm to the staff the chances of referrals are increased.

Other suggestions for product offering are as follows:

1.      Provide improved service. This is the advice offered by almost every book, magazine or pundit, but it is very important. For this a self-evaluation is critical. For instance, does staff smile when customers come in? Are they helpful and generous with their advice and are they well mannered?

2.      Change timings to accommodate customers. The large proportion of the population works Monday to Friday 09:00 to 17:30 so it is essential to be open for business either before 09:00 or after 17:30 and not to take off for lunch. If a shop is closed on the weekend, it cannot accommodate the working population.

3.      Give value added services. This could take the shape of free recipes around the shop (This will not only provide a advantage to the consumer, but it can help to sell ingredients that may otherwise prove difficult to sell), offer dieting assistance for those seeking to lose weight, or advice to people suffering from with allergies or food intolerances.

4.      Offer demonstrations or workshops. Provide customers with opportunities to learn an do something interesting and new, such as how to cook or bake specialized items or how to carve fruit.

5.      Make the shopping experience a memorable one.

6.      Align yourself to a social cause. Make sure that it is a cause you yourself believe in, and that aligns with your products and your customers’ beliefs.

7.      Make sure your cause is different from other others. Give customers a reason to choose you over your competition. For instance, differentiate your offering by for example only selling local produce or organic produce.

8.      Take advantage of marketing strategies by competition. Identify weaknesses in your competitors’ strategies, and cater to them yourself.

9.      Offer choices that larger retailers can’t. Larger companies will never be able to offer dedicated products that cater to special tranches the local markets by the personality of being a big business it just doesn’t have the give for this. Identify niche and specialist markets

      Offer incentives to entice customers. There’s nothing to prevent the small retailer offering inducements to get shoppers through the door, and while Tesco’s inducements are typically restricted to price discounts, a small business can be creative. For instance a baker could proffer to trade in old for new on a loaf of bread. They will lose on the loaf, but they can make it up by charging slightly higher elsewhere. 

Competing on the basis of quality

Another method small retailers can vie with large retailers is on the quality of service they offer. In particular small retailers, because of their size, may be in a superior situation than large retailers to offer a personalized service to customers. For instance small retailers will on the whole tend to serve fewer, but more confined, customers and use the services of fewer staff compared to large retailers, which gives them more chance to get to know their customers and to use this to their benefit.

Specialization

Another method that small retailers can vie in the retail market is by providing a very focused service or by catering to a niche market. When considering obstructions to change for small businesses, it is possible that small retailers may be in a superior situation to specialize, than large retailers, because of their size.  This is since large retailers tend to cater to the largest possible quantity of people and consequently do not focus on specific markets.

Measures to increase footfall

Increasing footfall may assist to augment the sale of other goods by small retailers at the same time as customers are in the shop. Certainly there is proof in the literature to propose that some shoppers do change their loyalty in favor of shops that have a lottery terminal for example.  There are a variety of methods in which small retailers can boost the footfall in their stores such as selling tickets for the National Lottery and for the congestion charge for instance.

Other forms of assistance

Sketched above are actions that small retailers themselves can take to contend more efficiently with large retailers. Set out underneath are some actions where the public sector or other organizations may be able to help perk up the competitiveness of small retailers.

More assistance for, or the setting of, trade associations and chambers of commerce may assist small retailers. Trade associations facilitate information sharing, lobbying of national and local government and can expedite items like buying groups (mentioned above as being of prominence to small retailers). Chambers of commerce assist to connect retailers with other local traders, and can offer a method of lobbying local authorities on items like transport and public realm works. They can also assist to create the local focal point for steps like Shopwatch (to tackle retail crime in particular centres) for example.

Local authorities and small retailers could cooperate together more proactively on town centre plans of action and management. While distinctive retailers can vie on quality and specialization, if all retailers in a specific centre work together to better expand the area, possibly making the area itself into a target for niche goods, this could add to the competitiveness of small retailers in the area. Local authorities could also assist small retailers act in accordance with regulatory requirements more efficiently, providing counsel and help as well as examination and enforcement. This is the tactic behind items like the Enforcement Concordat agreed between central government and the Local Government Association for example.

CONCLUSION AND RECOMMENDATIONS

Conclusion

The thorough analysis of the primary and secondary sources in the previous chapters has enabled the researcher to arrive at a valid and logical conclusion to the research while answering the research questions and accepting or rejecting the research hypothesis. Thus it can be said that through the analysis of secondary and primary sources the hypothesis can easily be accepted that Tesco is affecting the small retailers of United Kingdom and the marketing strategies of this brand is directly and indirectly affecting the small retail brands in the United Kingdom. Therefore, it can be said that small retailers should adopt different and non-conventional strategies to attract customers.

Marketing strategies plays a very important role in the development of an organisation whether large or small and customers usually prefer organisations especially in the retail businesses that offer best quality with reasonable prices. The marketing strategy is applied within an organisation to gain a competitive advantage in the industry through increased sale of goods and services. In industries where competition is very high and industry giants are present smaller organisations need to implement effective marketing strategies in order to survive. The strategy of Tesco is based on the conventional marketing strategies and in order to attract new customers local retailers should go out of the box and adapt modernised marketing strategies.

Recommendations

There are certain recommendations that are associated with this research these recommendations are listed below:

1.      Small retailers should develop their own niche through relationship building with the customers and through this approach they can improve their sales trends.

2.      Retailers can adopt out of the box thinking by offering certain discounts and packages to customers in order to build their loyalty.

In the similar manner another important strategy in this scenario is that they can merge with other retailers and enhance their market share.

So far this manuscript has reflected on the major concerns facing small retailers. This segment considers a variety of actions that may assist small retailers to contend more successfully in the retail sector.

Buying groups/franchises

One of the major problems for small retailers pointed out in this paper is the buyer clout of large retailers. One strategy that small retailers have is to offset the buyer clout of large retailers is to form buyer groups to discuss with suppliers. For example, one of the small retailer associations told this researcher about a group it had developed, which was able to bargain prices on insurance as well as prices with wholesalers.

One type of buying group that a number of retailers form is called a symbol group. With symbol groups members disburse a fee and are usually required to acquire a specified quantity of their goods from the symbol groups wholesaler. In reply retailers obtain benefits from being associated with the symbol group including group buyer clout and so better prices and in a number of cases loans and financial support to make bigger or renovate retail units.

Another method small retailers can get into the benefits of a large buyer group, without the difficulty of setting one up, is to become a member of a franchise. There are a variety of types of franchise but the most commonly linked with franchising is the business format franchise where the franchisor gives authorization for the franchisee to sell the franchisors products or services. The franchisor offers a demonstrated method of trading in addition support and advice in setting up and operating the business.  While there is a price involved, if small retailers turn out to be part of a franchise they obtain the benefits of being part of a large association such as bigger buyer clout and brand identity (which was also a matter pointed out previously in this paper).

Franchises can also put forward potentially additional benefits over a simple buying group, these benefits might include:

•           A common store frontage

•           Common prices on certain goods

•           Deals with delivery companies

•           Brand identity.

So it is significant, for example, that business backing agencies are conscious, in their business support agenda and services, of franchising/buyer groups as a way of easing some of the issues faced by small retailers in comparison to their competition with large retailers.  

Dissertation Chapter 5 Writing On Tesco

But high streets have more to be anxious about than stores. The propagation of retail estates and edge-of-town shopping centres is also enticing shoppers from their old plodding grounds. Nick Bubb, a retail market analyst at Evolution Beeson Gregory, said: "Consumers want the ease of car parking that you get from out-of-town shopping centres." He said the innovative Westwood Cross centre in Thanet, Kent, will make Margate's high street pretty much outdated. Attach in the rising internet threat and you begin to appreciate why, according to the IGD, an industry think-tank, the number of self-governing convenience stores has fallen 11 per cent since 2000.

While Mr Dowd's all-party group is sure to generate painful headlines for Tesco and its like, in the end it has no control over government rule. And as shopkeepers in Gerrards Cross, Buckinghamshire, who have applied pressure cruelly against the opening of a contentious new Tesco in the centre of the town, know all too well, painful headlines are not sufficient to discontinue the supermarket giant from putting their stores out of business by 2015. Small traders living in the darkness of a new multi-million-pound superstore say they are being put out of industry.

The Tesco Extra at Failsworth has been proclaimed by Oldham Council and the Government as providing a new daylight for the region – transforming a run down district centre, and regenerating the financial system with jobs. But bakers, florists, opticians, grocers and sandwich shops in the direct vicinity have this week spoken out to declare that from the time when the store opened a month ago, the only alteration has been for the worse. Many dread that they face a miserable future – and perhaps ruin.

Although a direct challenger of these industries, Tesco says it will act with small retailers to assist them expand their businesses and that it is too early to judge the supermarket’s influence.

But for Nigel Fay, the boss of Ashton’s Snax Bar, the 88,000-sq-ft department store has had an instant impact.

"I’ve run my sandwich shop for five years but never experienced a summer like it," he said. "I know all about the school holidays and we lose about £60 per day from the kids, but we are losing £180 per day.

"There was and is no strategy to help local businesses. It’s ‘wait and see’, but by then it’ll be too late. The florist around the corner doesn’t know if she’ll be open next week and I don’t know how long we can last. Tesco are wiping us off the map."

Tesco has fended off disapproval that it is not a local company boasting that approximately 40 per cent of 390 staff at the new store are Failsworthians, with a further 50 per cent from within a three-mile radius.

In a nasty turn, Tesco has a recruitment centre at the end of a line of businesses in Partington Street who are severely against to it.

One of these is Harry Panchani, proprietor of Mace All in One shop, who says his earnings are losing by 30 per cent. "Tesco made out that it would bring jobs to local people but the jobs lost by local businesses counter this," he said.

Grocer Matthew Tunaley remembers a period when he shared clientele with three greengroceries, but when Morrisons arrived they slowly closed. He asserts Tesco has all but killed off his passing trade, but continues resolute to stay.

"My regulars are my bread and butter and they have been very loyal," he said. "I am really up for a good fight. I am still here for the people of Failsworth."

Also in the lead for the brawl is Rodney Harrop, whose bakery in Dunkerley Avenue has served three generations. "It’s unfair competition and it’s making life really hard," he said. "I expected a little difference but it’s been much bigger. We have lost 10 customers a day and a massive chunk of profits. We can’t afford to keep doing that."The frame of mind among the traders appears divided between acceptance and a strength of mind to stay on and fight.

Although Tesco upholds that it is resolute to work with the traders – even offering to link a local business medium and assist train staff and perk up marketing opportunities – chat among small traders has turned to setting up their own organization, giving them a greater say and the opportunity to flex their collective might.

Dissertation Discussion Chapter 5

The strategy of Tesco gives them a managerial advantage to them in both the short and the long run. Tesco’s marketing and retailing strategy is quite distinctive from other small and general retailers of the United Kingdom. This strategy of Tesco is directly affecting the sales of small retailers because they are unable to cope with the rapid growth of Tesco. Their operational excellence is so high and there prices are low that is the reason why small retailers are unable to attain customer satisfaction in the short run (U Talk marketing 2010). However, experts and analysts actually believe that price can not be considered as an influential factor because the big five retailers have attained excellence in the scenario of price and they are now fighting for the contents of housewives purses. The experts actually believed that in the scenario of Tesco there are two major strengths of this organisation that are creating problems for small retailers. These two major strengths are enormous value of the brand and market leadership of this brand can be considered as strength. However, the major difficulty small retailing brands are facing as based on the scenario of prices because the prices of Tesco are extremely low and customers prefer this brand.

An individual who operates the Landmark group of wholesalers, branded the Big Four a "cartel" for the way they have free rein to divide the grocery market among themselves. His members are concerned they will have no shops to serve if small convenience stores persist to close at the current rate of 2,000 a year.

Bob Russell, a Liberal Democrat on the All-Party Small Shops Group, compared the high street to the Premier League. "There are lots of teams but only the top four compete," he said. 
Demanding policies to encourage "greater fairness" in the grocery marketplace, the ACS requested the committee to advocate a ban on below-cost selling. As the mananger who runs the North Yorkshire-based, five-strong Proudfoot chain of supermarkets, said in his submission, small shopkeepers are unable to compete below-cost selling. This is when big factions –such as Tesco - make use of their buying influence to present considerable discounts in specific areas to endorse a new store.

Early last year, Tesco gave £8 money-off vouchers for every £20 spent in their latest Withernsea store near Hull - a 40 per cent discount across a variety of products. "Whereas we used to be a thriving part of the high street, we are now a marginal business," the owner of Proudfoot said. "My predicament is caused directly by Tesco using their scale - something I am unable to match - directly against me."

Professor Alan Hallsworth, an authority in retail management, at the University of Surrey, who is due to give proof next week, said: "My concern is whether you should use your buying power in one sector - the supermarket sector - to give low prices in another sector - the convenience sector." The big groups supply directly from abroad, rather than rely on home wholesalers, and so they can charge customers not as much for products than a smaller competitor pays a wholesaler to supply them.

But Professor Hallsworth is concerned that the investigation is too little, too late. "The horse may have bolted. There was a lot of variety 25 years ago but a lot of names on the high street have already disappeared." A recent survey by the New Economic Foundation, an autonomous think-tank, discovered almost half of UK high streets have been "cloned" by a handful of retailers.

For proof, MPs need look no more than across the road at the Tesco Express that has taken the place of Cullens above Westminster Tube station. Tesco's acquirement two years ago of Adminstores, the owner of Cullens and Europa, increased its existence radically in central and west London, making it impracticable to avoid the chain in certain well-heeled areas.

Tesco's deliverance, as a spokeswoman repeated yesterday, is that competition authorities are content to look upon the grocery sector as two separate markets: for "one-stop" and "top-up" shopping. This means that even though on some processes it has more than a 30 per cent share of the grocery market, it has "just 6 per cent of the convenience sector". She added: "Previous competition inquiries have found the market is fiercely competitive."

Mr Rae wants the all-party group to advocate the beginning of incentives to support budding retailers starting out, such as a level tax rate for the first year. He also wants better help for retailers that wind up as the sole enduring shop in a region. The ACS recently stepped up its battle against the main supermarket groups, taking their argument to the Competition Appeal Tribunal after failing to persuade the Office of Fair Trading to examine the grocery market.

The Federation of Small Businesses, which put its case at yesterday's trial, wants the Government to re- investigate supermarket business practices. Although a current OFT enquiry concluded the active code of conduct that rules relationships between suppliers and supermarkets works perfectly, hardly any industry insiders believe this to be so. John Murphy, the chief executive of the Federation of Wholesale Distributors, said: "The word in the trade is it's a joke. It has no teeth."