OPINION: Can local shops win at convenience

In an article for Retail Express last week assessing Morrisons’ plans to open three convenience stores next year, I recounted a short walk that I took up Clapham High Street  in South London earlier this month, passing by a Sainsbury’s Local, then a Tesco Express, then a Sainsbury supermarket.

It is clear that these stores must put pressure on local shops – but also on each other.

This week, the Financial Times is running a series of features to celebrate Terry Leahy’s achievements at Tesco. The first feature includes the following observation from City analyst Dave McCarthy, who says he cannot see how Tesco can continue to open two million square feet of new selling space a year without “significant cannibalisation” of its own sales.

At the same time, Mr McCarthy says there is no “soft underbelly” to competitors to help feed Tesco’s opening programme.

Local shops, as the Kantar Worldpanel figures show, are holding their own – or, at least, those that are investing in their range and service levels are. While the threat from Tesco is concerning, it may be that it is overreaching itself.