Supply Chain Blog

Return of FMCG international key account retailers to the high street

Posted by Dave Jordan on Mon, Sep 17, 2012

Not that long ago most of our shopping was done at smart rows of local shops. Every community had a row of mainly family owned shops where you bought everything from Persil soap powder - yes the real soap version – to baked beans to nuts and bolts. The row would include a chemist, a hardware store, a newsagents, a grocer, an off-licence for beer and wine and if you were lucky, a baker and a chippy.

High Street Return of IKA retailersConsumer and community life revolved around these outlets which mostly opened late and closed early and shut completely for a lunch break. Finding one of these shops open on a Sunday was a rarity. Then International Key Accounts (IKA) like Tesco came to the fore and small outlets were opened in what were previously the grocers or some other shop which had closed through retirement of the owners. They brought a fresh outlook to local shopping and while they maintained a relatively small floor size they were clearly different.

You could buy many more things in one single location and you were actually allowed to touch and study the products you wanted without them being handed to you by an Open All Hours Arkwright figure in a brown overall. However, this was the beginning of the end for local grocers and green grocers as the large IKA retailers gradually gained better prices and service from manufacturers making profit generation difficult for the independent retailers. Slowly but surely the retail giants soaked up all the local business paving the way for empty shops and the birth of the video rental businesses and endless fast “food” outlets.

Then they upped and left.

Out of town super and mega stores were created allowing you to buy virtually anything in one concrete jungle only accessible if you owned a car. Public transport was available but if you wanted to buy more than a few bits and pieces you needed four wheels. If you forgot something vital then off you went out in the fuel guzzling car back to concrete-ville. Now, if the corner shops were still in place you would not need such logistics.

Then the IKA returned.

Now with new sexy names like - express, - mini, - local, - market, the large IKA players are back on this high street in stores only slightly larger than Arkwright’s. IKA stores are in petrol stations, attached to post offices, in airports and almost everywhere where there is a healthy foot fall of consumers.  Quite a sensible decision if you ask me but how much investment has been wasted in realising that placing retail outlets in the communities where people live is a good idea?

Is that the end of the cycle or can we expect a repeat migration out of the high street?

 

Image credit: ThisisKent.co.uk

Tagss: FMCG, Route to Market, Dave Jordan, Traditional Trade