Our screens are once again being overtaken by the ‘bug-sational’ challenges of a handful of our hottest, ok maybe not hottest, but certainly sweaty ‘celebrities’ as they endure the trials and tribulations of life in the wild, away from the usual trappings and service staff they have grown accustomed to. Their notoriety, in some cases, is somewhat questionable, but each night we see the provocative and celebrated juggernauts alongside their perhaps lesser-known team mates, face the fierce and formidable wrath of the voting British public in their ‘jungle’ enclosure. Without wanting to stretch the metaphor too tenuously far (ok maybe a little), we can draw some parallels with this jungle when we look at today’s landscape for retailers and especially small and medium size businesses.
The struggles of the A-List high-street ‘celebrities’ – the big retailers and supermarkets – are an all too obvious sign of the economic jungle our marketplace is facing. Large empty stores are a common sight in many high-streets and shopping centres. The empty spaces stand as an economic epitaph to the large retail chains that once were. Others have emerged from the ‘fray’ of administration and been fortunate enough to attract enough investment to survive their trial and stay open for business, at least for now.
But what about the lesser known players in this high street jungle – the small and medium size enterprises (SME’s) sandwiched in amongst the giants? Much has been said about the impact of the giant retailers on the lesser-known small and medium size enterprises that have traditionally been the lifeblood of the British high-street. Not a lot has been said, however about the vital role they play in the local economy and how it can survive the market trials we face today.
A pertinent example of this is perhaps the most traditional and endearing retail breed on our high-streets, the humble and mostly unknown street market retailer.
‘Street markets keep more money circulating in the local economy for longer. They provide twice as many jobs as supermarkets, support retail diversity by providing space for a range of independent local traders, and provide a low risk environment in which new enterprises can flourish. For example, analysis by NEF of Queens Market in East London, found that it generated over £13 million for the local economy, of which £9 million was spent on food. The market provided employment for 581 full time equivalent employees, of which 308 were local. Employment density (the ratio of employment per square metre of space) was one employee per 10 square metres at the market, nearly double the rate of employment at food superstores/supermarkets. In addition, 99 per cent of the 140 retailers at Queens Market were independent businesses. Money is not only spent directly at markets – they support other local retail and bring wider regeneration benefits.’*
But how many of these ‘micro-enterprises’ have understood and recognised how valuable their current practices can become to their brand and profit? If ‘micro-enterprises’ can understand and maximise on their responsible business practices, can SME retailers survive supermarket domination?
Within the UK SME retailer community, the contribution to the local community in which they are based has been largely ignored and the value of SME’s are often only appreciated when the diversity that they provided is lost.
Larger retail chains have sophisticated public relations departments with undisputed lobbying power and clearly defined business and marketing strategies. SME owner-managers have little opportunity to influence government policy because they do not always have a common voice and don’t always have a strong and obvious strategic direction which can make them even more vulnerable in such a fast-changing competitive environment.
In 2009 the New Economics Foundation* measured the impacts of large chain retailers on the high street retail environment:
> 70 per cent of villages in England, some 7,000, are without a shop of any kind.
> 40 per cent of bank branches in the UK have closed since 1990, with 2,737 bank branches closing in the last ten years, according to the Campaign for Community Banking.
> Up to 1,000 small stores could close on the back of the Post Office’s closure of 2,500 offices.
> 39 pubs are closing each week because of the combination of low supermarket prices and high taxes. And these are not just rural pubs. Recent failures have taken place in urban or semi-urban areas, in some cases across the road or next to a closing post office.
The catastrophic impact we saw a few years ago is significantly worse today. Are there opportunities for SME retailers to become more sustainable in a challenging environment? Two key areas to look at for their sustainable future are innovation and collaboration.
SME retailers can gain additional competitive skills through established relationships with suppliers. When they engage in retail collaboration and work in innovative ways that reduce the isolation of the owner manager the reward is a much louder voice that can see their brand profile significantly increase. Collaboration with support agencies and business schools can also guide SME retailers to address challenges and overcome deficiencies through the identification of best practices.
SME retailers should seek advice as routine and not when it’s too late, therefore encouraging consultants to engage with SME’s in more effective ways. Face-to-face consultation at reasonable costs, on a results basis can be very successful and can lead to significant increases in business performance. Additionally, cooperation with other firms (including competitors) is important for SME retailers for the purpose of networking. This is a vital ingredient in survival of small retailers to allow resource sharing and creating the opportunity to gain enough power to enable them to lobby to government for a common purpose. Success has been proven with Marks and Spencer through their Plan A strategy. Their engagement and collaboration with suppliers who they directly work with – addressing labour standards, diversity in the workplace, giving workers a voice and a business case for ethical trade, has enabled M&S to be one of the leaders in the market.
Known or unknown, retail behemoth or small enterprising business – the retail environment is nothing less than jungle-esque. But notoriety is not necessarily the only key to survival through severe economic trials. For SME’s that is a vitally important opportunity. Capitalising on the social good of their business and providing an ethical, profitable and unique offering to large retailers through cooperation and creativity will go a long way to surviving the daily trials of being a retailer today.
*Quotes taken from ‘Re-imagining the High Street; New Economics Forum, 2010‘
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