Friday, January 11, 2008

The decline of the Corner Shop and Small Firms

An enduring memory from childhood, is walking down my Grandmother's street (in Morecambe) to the corner shop at the end of the road. Here we would buy the odd convenience item; the shopkeeper was a cheery fellow, and despite the size of the shop they seemed to always sell what we needed. 20 years later, it is no surprise that the small corner shop has been converted into luxury flats. In fact it barely seems credible that a small food shop could have ever existed on such an insignificant road.

The decline of small independent retailers has been well documented. It is something everyone seems to regret, even if we ourselves, rarely go to these small independent retailers. Walking down Mill Road in Cambridge last week, I saw many poster campaigning against another Tesco being built. It is perhaps fashionable to criticise big supermarkets and I can understand why. However, whilst it may be fashionable to criticise Tesco's there seems to be no shortage of shoppers willing to go and buy all their groceries and more.

Reasons for the Decline in Independent Shops

  • Higher Prices. Small shops cannot benefit from the same economies of scale of big shops. Their wholesale price is higher, therefore even with a smaller profit margin they may end up with higher prices. It is hardly surprising that consumers go to the cheapest place to buy goods.
  • Time. The main advantage of the large supermarket is the convenience. Rather than having to go to several shops and queue up at the till 7 times you can buy all your goods in one place and only have to pay once. This can save significant time on your shopping. If the average hourly wage is £15 an hour, it is likely that this advantage is even more important than the relatively small time difference
  • Internet. I am the worst offender at this. I buy upto 50% of my consumption online. Quite often I will pay a £5 delivery charge just to get groceries delivered, the main advantage is the time saving and the convenience of choosing items online.

Factors Favouring Small Independent Shops

  1. Different. Some local shops offer services and goods that are just not available from big supermarkets.
  2. Atmosphere. Small independent shops can have a unique character and feeling that is lacking in bigger department stores and supermarkets. Supermarkets tend to use the same marketing devices and design
  3. Quality of Service. Small independent shops can give a more personalised service. You don't feel like you are a small pawn in the workings of a vast multinational.
  4. Coolness. Tesco just isn't cool any more. But, supporting your local fishmonger, grocer is.

I wrote this because I happened to walk into a small independent shop in Oxford, just off Cornmarket street today. It is something I very rarely do, but, I had an interesting conversation with the shop owner.

I don't feel guilty about shopping online. But, do sincerely hope the local independent store is able to make a comeback (or at least stop the decline)

No comments: