In the cut-throat world of convenience retailing, it is becoming increasingly difficult to operate as a pure-play independent retailer. Retail clubs run by wholesalers can offer the best of both worlds for indies. As part of a retail club, indies can reap the benefits of a symbol without the associated costs, allowing them to offer their shoppers strong promotions while benefiting from everything from exclusive discounts to point of sale material. All the big wholesalers run some form of retail club.
And they are growing fast: through its Batleys arm, Bestway has Xtra Local. Parfetts launched Go Local in Last month, it said retailers were now operating under the fascia and over 1, were taking advantage of the promotions.
For many indies, the relatively low cost of joining a retail club compared with becoming a symbol is the biggest draw. Promotions are also a major pull. The additional margin when I take it off promotion and sell at full price more than pays its way.
Minimal commitment required as part of the sign-up process means retail clubs can be trialled by independents with minimal hassle. The benefits are also reduced by comparison, but so are the levels of minimum spend required. Professionally delivered promotions are a big part of the attraction for indies that want to be able to offer a range of promotional mechanics and prices. For some indies, being a retail club member can give them the confidence to make the leap to becoming a fully fledged symbol store.
Fox reels off a number of other advantages, including lower spend targets, lower promotion compliance expectation, a monthly agreement instead of being asked to sign a relatively long-term three-year contract and no expectation of minimum store standards. There are, of course, disadvantages.
