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Battling the 'big four' - how to beat the supermarkets

3-minute read

Josh Hall

Josh Hall

4 August 2011

The supermarkets’ aggressive expansion is continuing apace.

Across the country, independent retailers are finding themselves suddenly faced with a megastore just across the road. As recent events in Bristol suggest, these shops are not always welcome – but once they open, they tend to stay.

An event like this can seem like the end of the world for an independent retailer. But, while you might not be able to compete on price, there is a range of ways that you can hold your own against the so-called ‘big four’ – and continue to thrive even when faced with an unwelcome arrival.

1. Be aggressive

If you want to beat the big boys, you are going to have to take the initiative. They have been aggressive in their expansion – so why shouldn’t you be aggressive in your response?

Don’t sit back passively and watch your customer base dissipate. Instead, come out all guns blazing. Make clear to your customers that you are still in business, and that you still have great offerings. At the same time, though, don’t panic. Remember that you can continue to succeed – but you might have to think creatively in order to do so.

2. Use your independence

Your independence can be a key weapon in the fight against the chains. The economies of scale that the big four can command means that they will generally be able to undercut smaller retailers on price, and some shoppers will undeniably be drawn to them as a result. But many others remain keen to support independent businesses – and you can use this to your advantage. Highlight in your marketing material the fact that you remain independently owned. Consider taking out ads, or putting up signs outside your premises, underlining this.

3. Give great service

All too frequently the big chains sacrifice service in favour of getting people through the doors quickly. This presents you with a key field on which to compete.

You might not be able to beat the big four on price – but you can certainly beat them on service. Take the opportunity to review the way in which you deal with customers. If necessary, refresh your staff training to ensure that everyone understands your firm’s standards, and that they're all giving the very best possible service. Great interactions are amongst the most important ways that you can ensure customers remain loyal – and they are one of the key ways in which you can help to guarantee that those customers recommend you to others.

4. Offer convenience

In an increasingly fast-paced world, it is vitally important that you offer your customers a highly convenient shopping experience. Amongst other things, this means ensuring that customers can use their favoured payment method. You should recognise that fewer and fewer shoppers are choosing to carry cash – and that card payments are becoming increasingly popular. You should therefore make sure that you are equipped to accept these payments, while also considering new methods like contactless transactions.

5. Start a loyalty scheme

A loyalty scheme can be a fantastic way of retaining existing customers. These work particularly well for cafes and restaurants, but there is nothing to stop you experimenting with a scheme of this sort in virtually any business.

In order for your loyalty scheme to be successful, it needs to be enticing enough for customers to bother with – but affordable enough that it doesn’t eat into your profit margins too badly. Of course, the precise nature of the scheme will depend on a range of factors within your business, but you might consider options like money off a customer’s tenth purchase or a free gift after a specific number of transactions.

There are, broadly, two types of loyalty scheme: points-based, and milestone-based. The first gives the customer points for each transaction, redeemable against future purchases, while the second rewards them when certain ‘milestone’ transactions are reached. It is worth noting that points-based systems tend to be more complicated, and therefore more expensive, to administer.

Above all, you should remember that the unwelcome appearance of a supermarket doesn’t need to spell the end for your business. With a bit of creative thinking and some efficient planning, your shop can continue to thrive.

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