As availability for supermarket new build becomes limited and increasingly expensive it is no surprise that both Asda and Morrisons look toward small Format Development in order to continue footage growth. Asda, who are no stranger to Format Development for small stores, sold 16 of the original 195 Netto stores to it’s Yorkshire rival for £28.1M. With only 47 of the 195 having to be sold on, Asda clearly need to get their format working as it has never done before and we looked today at how the two Companies have made progress.
Both Netto stores were in the homeland of Yorkshire and inhabited similar buildings with a very similar demographic profile. I could go on ad infinitum about the differences between these two organisations but in truth a morning spent at each of them would tell you most of what you need to know, they act as a microcosm for the businesses as a whole. Both store formats added enormously to the previous poor Netto provision and no doubt customers would recognise the improvements in fit, finish and range. They would also be surprised about the pricing and although there was nothing overt about contesting previous Netto prices there was strong promotional space in both stores. I liked both stores feel and layout and with the exception of the butchery counter at Morrisons they offered the same format. This is however where it all ends, as no matter what you like about the offer, the differences in the standards will mean that one shopping trip will end in some frustration, Asda simply had too many gaps, everywhere. I discussed the visits with one of my colleagues, a former Asda retailer, who leapt to Asda’s defence in suggesting that this was because of volume taken. I have to say that if this was the case then having that many on a Friday morning suggests they are not ready for the trade they get and the fact that Morrisons at Armthorpe seemed busier by some distance would suggest otherwise. If today’s visits give an indication of how things will progress then Asda have some catching up to do against a well formatted, well signed and well run Morrisons.
Two visits are not enough to make this leap of course but in large stores gaps are less apparent and Asda can get away with it, in small stores that luxury is not afforded you and at present Morrisons are best placed to make it pay.
Visit our Format Development page for more information.
17th May 2011
I tweeted some time ago that Retailers can be categorised into two types depending on how customers see them and use them, clearly I exaggerate to make a point however in essence the principle is true, if you are a Retailer you are either a chip shop or a hairdresser!
Most of will be familiar to moving to a new town and trying to work out where the best chip shop is located, usually this means that some of the early visits are not as good as you wanted and you quickly move on to the chip shop with the huge queue outside on a Friday tea time. You are persuaded by the improved quality and/or service and have made the decision to be loyal to that chip shop. You might talk about it to others and act as an advocate, sometimes to the detriment of the ones you tried previously.
The day will come however when you are very hungry and your chip shop of choice is closed for one reason or another, what do you do? You go to the next one down on your list as your stomach tells you that it was never really that bad and it’s on the way home anyway. Your loyalty has been temporarily brushed aside. Most people would treat their large grocers in exactly the same manner and the large retailers count on the promiscuity of the customers to a degree. Internal departments however within the grocers can become something far more powerful from a loyalty perspective, they can become hairdressers!
If the scenario is the same and you move to a new town far enough away from your previous location then after casual investigation ofnew hairdressers/Barbers are sought. The result is seldom the same however as the chip shop. If after a few less than successful styles at different hair-dressers you settle on one you like, you will give absolute loyalty to that hairdresser. It is not likely to be the most convenient location, it may not have the best prices nor have the most attractive assistants but this does not matter because when you come out of there you feel good and if ever the time came when you could not get the appointment you needed you would never go back to one of the previous stylist. Your loyalty is absolute; if you were persuaded to go elsewhere you would feel guilt and remorse. In loyalty stakes as a Retailer you are either a chip shop or a hairdresser, which are you?
Visit our home page to see more on Retail Advice
James Mcgregor
http://www.retail-remedy.com
0161 408 3021
