My Local: Mike Greene's new convenience chain has a tough task ahead of it after Morrisons' management

 
Fraser McKevitt
The grocery market sector is already pretty crowded (Source: Getty)

Today’s grocery market is an unforgiving place for established supermarkets, let alone new retailers on the block.

Many supermarkets are struggling against the seemingly inexorable changes sweeping the grocery industry. They face falling prices and shifting shopping habits, with shoppers moving simultaneously online and to the discount retailers.

It is against this backdrop that Mike Greene’s 130-strong My Local chain opened for business this morning. So what does the minnow-sized My Local need to do to succeed in such a clearly competitive marketplace?

Consumers have three things in mind when choosing where to shop for groceries: convenience of store location, what products are on the shelves, and the price they are willing to pay.

Defining convenience

Questions have been raised over whether the initial My Local stores are in good retail locations. Many are on old Blockbuster sites, and when they were operated by Morrisons, location was one of the main reasons given for their struggle to compete.

But it must always be remembered that "convenience" for the consumer is about more than location: the layout once in store has to be "convenient" too.

My Local will have to work with the sites they have, ensuring the range on the shelves and the store layouts reflect their locations, rather than using a "one size fits all" approach.

On the shelves

The great divide between convenience offerings from the major supermarkets and smaller operators has always been the breadth of products the bigger retailers offer.

Substantial own label investment has been targeted particularly at "chilled convenience", for consumers seeking a snack on the go, a quick meal to cook or an indulgent treat.

Crucially, these products are often priced at a premium. Shoppers willingly put more items – and more expensive items – in their baskets when the products on the shelves reflect what they want at that moment. My Local will not have the power of Tesco Finest or Sainsbury’s Taste the Difference behind them, but are instead looking to use the pull of local products tailored to the needs of an area. They will be able to be flexible where their larger competitors would struggle.

The pricing conundrum

And finally, price. We are all willing to a pay a premium for convenience, but we still aren’t willing to pay too much. Like-for-like grocery prices have been falling for over a year, and a typical basket of goods is now 1.7 per cent cheaper than October 2014. It’s a difficult tightrope to tread while still turning a profit.

Sound straightforward? Offer the right products, in the right stores, at the right price. That’s the challenge My Local has set itself: we’ll have to keep watching to see how they fare.

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