Highstreet of the future

So this what we see at the moment and get used to it because its only going to get worse with more super stores and less smaller ratailers. If you liked the traditional high street then forget it.

A house of commons all party parliamentary report said 2,000 independent convenience stores closed last year (2005), since 2000 there 5,000 independent retailers have been lost or 11% of independent retailers!

The report also said convenience is growing at a rate of 5% a year but during the same period independent retailers lost 5% of sales in the convenience sector to larger companies.

Operationally the smaller businesses cannot sustain competition on price as they cannot achieve economic benefits such as economies of scale. They cannot compete promotionally and they have a less flexible supply chain. It will be harder for small business to obtain finance from banks in comparison to the larger retailers who have large profits to rely on and will find it easier to obtain finance due to the amounts of capital they own.

It concluded: “if current trends persist, the grocery sector will have dramatically altered. Small shops in the sector cannot compete with larger competitors, in terms of buying power, promotional activity, etc. The limitations offered to them by the supply chain in terms of differentiating their stock means there is likely to be an acceleration of shops going out of business, as reduced market share continues to impact on the price advantages enjoyed by the larger retailers.”