Closing-down poster at Newgate Street Co-op, Newcastle (2 Dec 2011)

Newcastle city centre’s Co-op supermarket is to close down this month, bringing to an end nearly a century-and-a-half of Co-operative presence in Newgate Street. Posters in the windows and instore – which I spotted while passing by yesterday – reveal that the store will ‘cease trading as a Co-operative’ at 6pm on New Year’s Eve (31 December).

Former Co-op department store, Newgate Street (16 Feb 2010)

The food hall is the last remaining part of the former Co-op department store, which closed in 2007, and there has been speculation about its long-term future ever since – both in terms of its competitive position and the expected redevelopment of the building in which it sits.

For many years, the Co-op was one of a handful of supermarkets in Newcastle city centre – alongside Marks & Spencer’s food hall and the now-demolished Safeway (previously Presto) in Clayton Street – and had the advantage of the biggest range and longest opening hours of the lot.

Sainsbury's Local, Gallowgate, Newcastle (10 May 2011)

More recently, however, competition has intensified, with Waitrose opening in nearby Eldon Square and Tesco Metro taking a unit roughly where Safeway used to be in the redeveloped Eldon Square South. Reflecting the national trend of big grocers moving into convenience, the city has also seen a proliferation of smaller supermarkets, including two Sainsbury’s Locals (in nearby Gallowgate and at Central Station) and a Tesco Express (Eldon Garden), as well as a recently opened Londis Metro in Grainger Street.

While the environment around it has shifted, the Newgate Street Co-op has failed to keep up. Even two years ago, I described the rump supermarket as feeling “unloved and behind the times”, noting the “bored-looking staff, long queues (as usual), and numerous broken light fittings that create an overall feeling of gloom.”

Old 'Food Hall' signage, Co-op, Newgate St, Newcastle (9 Nov 2009)

Despite the apparent lack of investment or attention to detail inside the store, last year’s replacement of the old ‘Food Hall’ signs with ones bearing the new ‘Co-operative Food’ identity suggested that the Co-op might, in fact, be planning on staying around for a while. Indeed, even when long-awaited plans for the building’s re-use for retail, hotel and leisure were approved earlier this month, it was stated that the Co-op’s food store would be retained as part of the scheme, despite plans for a new (but much smaller) Co-operative Food store, in the old Envy unit in Market Street, having come to light a week earlier.

New Co-operative Food signage (20 May 2010)

Nevertheless, the Co-op food hall’s surprise closure in Newgate Street is likely to facilitate the Redbox-designed plans to revamp the iconic building that it occupies. The shop’s strange position within the property – largely the result of having to screen it off from the abandoned department store and stair towers – would always have necessitated some reconfiguration and resulting disruption to business.

So, what of the redevelopment itself? First of all, it’s important to appreciate the extent and interest of the existing property. While the Grade II-Listed Art Deco section facing Newgate Street – built from 1931-32 to replace the original 1870s premises, and extended by three bays in 1959 – is the most familiar part of the old Co-op department store, there are also some noteworthy Grade II-Listed buildings around the corner in St Andrew’s Street.

St Andrew's Street buildings, former Co-op, Newcastle (9 Nov 2009)

As David Lovie notes in his useful (but now quite old) ‘The Buildings of Grainger Town’ book, these were built in 1902 as an extension to the original 1870s Co-op store, so are the oldest surviving part of the property. Happily, these will be given a new purpose as the entrance to the 231-bedroom Travelodge that is set to occupy the upper-floor space within the 150,000 sq ft scheme.

St Andrew's Street buildings, former Co-op, Newcastle (9 Nov 2009)

According to the useful project update on the architects’ website, a gym is expected to occupy the basement, while the ground floor will house six retail or restaurant units. Interestingly, the piece – which also assumed, at the time, that the Co-op supermarket would remain in place – states that “all tenants but one have already committed to the scheme”, which will no doubt prompt all sorts of speculation about who might occupy the space.

The property’s location next to The Gate leisure complex means that restaurants or bars are an obvious choice, but its position in relation to recently opened big-name stores - opposite Debenhams and New Look, and close to Next – makes fashion retail a possibility.

All in all, then, it’s difficult not to be positive about the plans for the property. A historic building is going to be brought back into use after five years of near-vacancy, while the promised ground-floor uses should help generate street-level activity and footfall in Newgate Street. Meanwhile, any loyal Co-op shoppers look set to be catered for by a small store elsewhere in the city centre.

For all that the present Co-op supermarket is unlikely to be widely missed, I hope that the rather clinical head-office posters announcing the store’s closure will be replaced in due course by something more bespoke. After all, when a business has traded from the same site since the 1870s – supported by generations of Newcastle families – shoppers surely deserve a warmer expression of gratitude than a passing ’Thank you for your custom’.

Sainsbury's Local (formerly Woolworths), Hessle Road, Hull (11 Oct 2011)

While tearing around Barnsley and Hull visiting UGO supermarkets last month, I was pleased to be able to work in an unexpected ex-Woolworths. Not knowing Hull very well at all beforehand, I hadn’t realised that the UGO supermarket in Hull’s Eton Street was close to Hessle Road, where numbers 306-310 – today’s Sainsbury’s Local – once housed a Woolies store. The property’s blank upper-floor windows and ground-floor vinyls do present a rather disappointing face to the street, but the Sainsbury’s store itself seems popular enough.

I believe Hull had as many as five Woolworths stores in the past, but only one of these survived until the retailer’s demise in 2008-09. The large city centre Woolies at 4-5 Whitefriargate was one of the first in the country (store #6), opened in 1911 but closed down on 7 April 1984. Today, the building houses the fashion retailer Peacocks.

Sainsbury's Local (formerly Woolworths), Hessle Road, Hull (11 Oct 2011)

Hessle Road (#169), above, opened next, in about 1924, followed by Holderness Road (#710) around 1938, and another city centre store, at 59 King Edward Street (#919), in 1956. Hull’s final Woolworths, in Anlaby Road (#957), opened in 1957.

However, while the King Edward Street shop survived until the end, the three other stores all seem to have closed by the late 1980s. The store at 455-457 Anlaby Road is also now a Sainsbury’s Local, while the landmark premises at 272-284 Holderness Road are divided between Heron Foods and a branch of Lloyds TSB.

Staff of Hessle Road Woolworths in 'The New Bond', October 1937

As elsewhere, the relatively early closure of the Hessle Road Woolworths seems to reflect the street’s changing status as a shopping destination. Rather like Byker’s Shields Road, which also lost its Woolies in the 1980s, my understanding is that Hessle Road was once one of Hull’s prime out-of-town retail thoroughfares. Today, like Shields Road, it’s no longer the major draw that it was, but it continues to play an important role in meeting the retail needs of its local community. Most notably, the northern variety store institution Boyes continues to trade from the site at 226-234 Hessle Road where it first opened a drapery shop in 1920.

Sometime after Woolworths closed, 306-310 Hessle Road hosted a branch of the Hull-based convenience chain Jacksons Stores, part of the same long-established company that had boasted at least six grocery or bakery shops in Hessle Road by 1936. Following the sale of the business to Sainsbury’s in 2004, Jacksons’ 114 stores, including Hessle Road, initially became Sainsbury’s at Jacksons, before later being rebranded to Sainsbury’s Local.

Woolies at 306-310 Hessle Road may be long gone, but today’s occupant is, in its own way, just as much a part of the area’s long retail history.

Tesco in Eger, Hungary (15 Jul 2006)

Today’s release of fairly weak UK trading figures from Tesco – where like-for-like sales, excluding petrol and VAT, fell by 0.5% in the first half of the year – has unsurprisingly prompted much media discussion, both about Tesco specifically and the state of the UK economy more generally.

Tesco’s coverage hasn’t been helped by rival grocer Sainsbury’s revealing that its own like-for-like sales, excluding petrol but not VAT, rose by 1.9% in the first six months of the financial year (a measure for which the equivalent at Tesco was a 0.5% rise).

As new Tesco boss Philip Clarke noted, there’s no doubt that retailers across the spectrum are having to eke every penny of spend out of cautious shoppers at the moment, with further gloomy figures on household consumption released today. The big question, however, is why the UK performance of Tesco – a retailer that has long been the behemoth of the British supermarket sector – is seemingly lagging behind that of major rivals such as Sainsbury’s.

Tesco Express, Lyme Regis (4 Sep 2011)

Before trying to answer that question, it’s worth reminding ourselves that Tesco as a whole remains a phenomenally successful business. Today’s figures showed that the company made a profit of £1.9bn in the first half of the year, on group sales of £35.5bn – a performance that most retailers can only dream of. Tesco’s store estate comprises more than 5,300 shops – half of those overseas – and it is now the third biggest retailer in the world, with a strong presence in Ireland, eastern Europe, Asia and the US. And for all that its UK performance is below par, Tesco’s market share remains more than that of Asda and Morrisons combined – thanks in no small part to the efforts of its 200,000 UK staff. As a homegrown international success story, Tesco has given the UK much to be proud of.

Tesco in Košice, Slovakia (2 Sep 2008)

However, it’s the business’s very immensity that also contributes to some of its present challenges. The perception that Tesco is simply too big – and too powerful – is widely held, not least here in the North East where it owns much of Gateshead town centre and holds the key to the centre’s long-awaited regeneration. There are clearly some shoppers who refuse to shop at Tesco for that reason.

In the UK, a significant chunk of Tesco’s growth in recent years has been built on expansion in non-food. This served the business well in the good times, but has arguably left it more exposed than its rivals now that discretionary spend is under pressure. There is also, I would suggest, some sense that Tesco’s expansion into new categories – whether that’s non-food, banking or used cars – has allowed others, such as Waitrose and the hard discounters, to up their game and become the innovators in the core grocery business.

Tesco-owned One Stop, Crewkerne (10 Sep 2011)

I touched upon some of Tesco’s challenges in grocery when I recently blogged about the Asda Price Guarantee, and Tesco, like Asda, is having to fend off rivals at both the premium and value ends of the market. For all its investment in price – including the eyecatching Price Drop campaign announced last month – my reckoning is that Tesco still faces an uphill struggle to be perceived as cheaper than Aldi, Lidl or even Asda. The proliferation of higher-priced Tesco Express stores – and the growth of the supposedly even dearer One Stop ‘stealth fascia’ – surely don’t help this perception. In contrast, Asda’s clear message about charging the same prices in its smaller stores as in the larger ones helps to cement its own value credentials.

What about quality? Here too, Tesco arguably has work to do. Just among my own circles of friends, I often hear perceptions of Morrisons being better than Tesco in fresh produce; Sainsbury’s as being a more ‘upmarket’ shop in general; and Waitrose – still a relatively recent entrant to ‘the North’ – as excelling in speciality products and treats. In contrast, Tesco’s dalliance with being ‘Britain’s biggest discounter’ and its recent launch of ‘venture brands’ – its own in-house products, but without a Tesco branding – overlaid with the familiar Value, mid-tier and Finest ranges, arguably create a confused picture of what Tesco stands for.

One of Tesco's discount brands

The one area where Tesco beats all its rivals is its long-established loyalty scheme, Tesco Clubcard. Reportedly boasting 15 million active cardholders, Clubcard provides the retailer with an unrivalled snapshot of UK consumers’ shopping habits, as well as a means of communicating targeted news and offers to its customers. Given the importance of Clubcard, the decision last week to scrap the Double Points promotion – and invest the money saved in immediate Price Drop reductions – is a bold if risky one. Tesco’s reckoning, perhaps, is that investing in loyalty is only worthwhile if shoppers are actually loyal – and don’t go off to Aldi, Lidl, Morrisons or Waitrose instead.

Back in the days when Prunella Scales’ Dotty was the face of Tesco’s TV advertising, there was a warmth and clarity about the Tesco brand – and even an affection for it – that has got rather lost in the intervening years. Today, Tesco’s rather cold and soulless stores seem like a metaphor for the brand.

Whether the recently announced initiatives will clarify what Tesco stands for – and win back those customers who have started to establish new shopping habits elsewhere – remains to be seen. However, given Tesco’s deep pockets, immense experience as a retailer, and past record of success, only a brave observer would write off its present efforts to bring the UK business back on track.

Point-of-sale promotion of the Asda Price Guarantee

Judging from the number of hits – currently 900+, and rising – many of you enjoyed my recent illustrated post about Asda’s Old Fold Road store in Gateshead, following its impressive transformation from a Netto.

While the increase in product lines and instore services is one of Asda’s selling points at its converted Netto sites, another is its pledge that “all newly converted Netto stores will charge the same low price as every other Asda in the UK.” This means that smaller Asda Supermarket sites, just like their full-size counterparts, are covered by the much publicised Asda Price Guarantee: the company’s pledge to be “10% cheaper on your comparable grocery shopping” than Tesco, Sainsbury’s, Morrisons or Waitrose.

Asda Supermarket, Gateshead (8 Aug 2011)

At the same time as I was checking out the Gateshead store’s new look, Asda challenged me to carry out a £50 shop instore – to put the Price Guarantee to the test, as well as seeing whether it really was possible to do a full weekly shop in a compact Asda. So, how did I get on?

My shopping list

Coffee at Asda Supermarket, Gateshead (8 Aug 2011)

To make the test as real as possible, I prepared a shopping list comprising many of the items that I buy on a regular basis and needed to buy anyway, including fresh fruit and veg, storecupboard items (e.g. olive oil, coffee, baked beans), crisps and nuts, household items (e.g. handwash, toilet rolls), frozen foods, cat food and wine, as well as ingredients for that evening’s dinner (sausage and mash).

A couple of qualifiers

Asda billboard, Gateshead (26 Jun 2011)

As I’ve mentioned before, I’m not usually an Asda shopper, but in the supermarkets I do visit – mainly Waitrose, Sainsbury’s, Morrisons and Aldi – I tend to go for own-brands over branded products. The ‘comparable grocery shopping’ proviso of the Price Guarantee reflects the fact that while it’s easy to compare the price of branded products in different supermarkets, own-brand comparisons are more tricky due to variations in pack size, ingredients or other characteristics. To ensure that my shop included as many comparable items as possible, I was therefore prepared to buy a few more branded items than would usually be the case.

Finally, it’s worth noting that the shop took place on 6 August; inevitably, all the prices and offers that I mention can only ever be a snapshot of that particular day, and may well have changed – up or down – since. All the photos are from two days later, when I returned to the store – unladen with shopping – for a more detailed look around.

Finding what I wanted… and a few other things

Pesto at Asda Supermarket, Gateshead (8 Aug 2011)

By and large, I was able to find everything on my list, though I did have to make a few substitutions where my chosen brand wasn’t available. For example, I couldn’t find any Pears handwash, so bought a similar Baylis & Harding product (£2) instead. I couldn’t see any Sacla green pesto either, so decided to abandon the pesto rather than opt for the slightly cheap-looking Asda own-brand alternatives.

Handwash at Asda Supermarket, Gateshead (8 Aug 2011)

In some other categories – such as meat sausages, vegetarian sausages, redcurrant jelly and, more surprisingly, potatoes – the options instore were a little bit limited, and you might well choose to go to a larger store if you were after a wider range or particular brands. On the other hand, it’s hard to imagine that the old Netto on the site would have sold vegetarian sausages or redcurrant jelly at all.

Belvoir Elderflower Pressé at Asda Supermarket, Gateshead (8 Aug 2011)

Alongside the items I planned to buy, I was also tempted by a few of the offers that grabbed my attention instore. Mr Muscle Window & Glass Cleaner (500 ml) for £1 seemed like a great deal, as did Belvoir Elderflower Pressé (75 cl) at two for £3.50 (compared to £2.20 for one) and Taylors of Harrogate coffee at two for £5 (instead of £3.28 each). The branded wines (Blossom Hill at £5 and Echo Falls at £4) also seemed keenly priced.

Finally, my cat, Sebastian, did well out of the shop too, with the price for Iams (£3 for 1kg) looking very attractive compared to what I normally pay.

In total, my shop comprised 38 different products, and came to £68.77 once the ‘two-for’ discounts were deducted.

Wanting to enter the details of my shop online… but not until tomorrow

Asda Price Guarantee website welcome screen (6 Aug 2011)

Watching the rather cheesy TV ad for the Asda Price Guarantee, you can be forgiven for thinking that all you need to do is arrive home, gather the other mums around, and immediately start comparing each others’ receipts.

The reality is a little less exciting, especially as you have to wait until at least 6am the morning after you shopped before inputting your details at the Asda Price Guarantee website. At the moment, neither the receipt nor the Price Guarantee website homepage flags up that you can’t compare your prices straight away; it’s only mentioned once you reach the ‘Enter your receipt details’ page via the welcome screen’s ’Enter Receipt’ button.

This, I would have thought, has potential to cause disappointment and annoyance, yet would be easily remedied by changing the receipts to read “Check your receipt online from 6am tomorrow at…” instead of the current “Check your receipt online at…”

Putting the Price Guarantee to the test… and interrogating the data

My shop *is* 10% cheaper (7 Aug 2011)

Needless to say, I waited with baited breath until the following morning when – finally – I could enter and check the details of my shop, a process that is clearly explained and takes just thirty seconds or so to complete. So, was my comparable shop 10% cheaper than it would have been at Asda’s competitors? Yes, it was, as the results screen above happily declared.

How my shop compared (7 Aug 2011)

Given the prominence of the ’10% Cheaper’ promise within the Asda Price Guarantee, I found it a little strange that the main results screen showed the difference between my Asda shop and the equivalent elsewhere in terms of actual money saved, rather than percentage. Hence, I could see (above) that my comparable items would have cost £8.87 more at Tesco or £6.62 more at Morrisons, but beyond knowing that the saving must be at least 10%, the precise percentage difference was not made clear.

Another thing that immediately struck me was the fact that I’d apparently saved £7.61 compared to Waitrose, but £8.87 compared to Tesco. Did this mean that Waitrose was cheaper than Tesco for the items I’d bought? Actually, no, it didn’t at all.

Receipt comparison details: Asda vs Tesco (7 Aug 2011)

For each of the other supermarkets, clicking the ‘View details’ link brought up a more detailed, item-by-item price comparison. Pleasingly, only three of the 38 items I bought turned out not to be comparable with any of the other supermarkets, a much smaller number than I expected.

The store-by-store breakdown showed that while the Price Guarantee had been able to compare 31 of my 38 different items against Tesco, it had managed to compare 29 against Sainsbury’s, 28 against Morrisons, and only 23 against Waitrose. If you’re interested in the full detail, I’ve created a PDF (Table 1) that shows the price comparisons for all the items that I bought.

In other words, the headline saving of £8.87 against Tesco was based on comparable items costing £54.27 at Asda. In contrast, the headline saving of £7.61 against Waitrose was based on a much smaller comparable basket, costing £39.89 at Asda. Hence, while it’s fine to compare the headline figures for any one of the other supermarkets with Asda, it’s not fair to compare those competitors with each other, simply because the basket sizes being compared are all different.

Tesco store, Gateshead (18 Jun 2010)

Asda would probably point out, of course, that the whole point of the Price Guarantee is only to compare its own prices with those of competitors, and that it doesn’t claim to compare, say, Tesco against Waitrose or Tesco against Morrisons. That’s fine, but I wonder how many other shoppers would have drawn the same initial Tesco vs Waitrose conclusion as I did from those headline figures?

Certainly, it’s another reason why it would make more sense for the initial results page to show the percentage savings relative to Asda’s competitors, rather than actual cost savings that have potential to confuse. Currently, however, the actual percentage savings against the other supermarkets are not stated anywhere in the results – I had to work them out myself by copying and pasting the data into Excel.

Morrisons came closest to beating the Price Guarantee

This is surprising, as in my case, at least, the statement that “Your comparable grocery shopping is 10% cheaper than Tesco, Sainsbury’s, Morrisons and Waitrose” actually underplayed the true extent of the saving. In percentage terms, Morrisons came closest to beating the Asda Price Guarantee, where I saved ‘only’ 12.2% by shopping at Asda. Tesco was next best (14% cheaper at Asda) followed by Waitrose (16%) and finally – perhaps surprisingly – Sainsbury’s (16.1%). Again, my PDF shows the detailed data from which I calculated these percentages.

Taking the impulse buys out of my comparison

Iams at Asda Supermarket, Gateshead (8 Aug 2011)

As I noted above, there were quite a few items in Asda that I bought on impulse because they seemed like really great deals. It turned out, for example, that the £3 bag of Iams was £1.41 cheaper in Asda than its nearest competitor (Sainsbury’s), and a full £2.50 cheaper than Waitrose [see full breakdown]. While great for me, as the customer, including such items in the test inevitably gives Asda a head start in meeting its ’10% cheaper’ pledge.

So, what happens if I exclude those impulse purchases from the comparison and just test the Price Guarantee on the items on my shopping list? Well, Asda still came out top, but obviously by a bit less than before:

• 5.9% cheaper than Morrisons on my comparable shopping-list items
• 7.8% cheaper than Tesco
• 10.1% cheaper than Sainsbury’s
• 10.3% cheaper than Waitrose.

I’ve prepared a second PDF (Table 2), which makes clear the items that I excluded from each comparison. Again, bear in mind that the percentages above are only really meaningful in terms of comparing Asda to each of its competitors, not the competitors with each other.

Testing the data a third way 

Of the five supermarkets, Waitrose was cheapest on the fewest items

Having established that Asda was indeed cheapest across both my entire shop and the shopping-list items, I thought it would be interesting to look at which of the five supermarkets was cheapest on a product-by-product basis. You can see the results of my analysis in a third PDF (Table 3).

For each of the 35 comparable products that I bought, I ranked the five stores 1 to 5, where 1 was the cheapest supermarket and 5 was the most expensive. If two or more stores tied for the cheapest price, then both were ranked 1. If a product was only available at, say, three of the five stores, then I ranked these 1 to 3. So, which supermarket came out best by this measure?

Impressively, Asda ranked #1 for price on nearly two-thirds (23, or 66%) of the 35 comparable items that I bought, and was #2 on all but two others. Only the iceberg lettuce (cheaper at both Tesco and Morrisons) and the McCoy’s crisps (cheaper at Tesco and Sainsbury’s) let the side down.

Of Asda’s competitors, Tesco ranked #1 on 13 (i.e. 42%) of the 31 comparable items that I bought, while Morrisons was close behind with #1 ranks on 11 (39%) of 28 comparable items.

In contrast, Sainsbury’s (#1 on 7 (24%) of 29 comparable items) and Waitrose (#1 on just 4 (17%) of 23 products) performed least well by this criterion.

Conclusions

Self-service checkouts, Asda Supermarket, Gateshead (8 Aug 2011)

My test has exposed a few ways in which the Asda Price Guarantee website could potentially be improved, most notably in signposting the overnight wait more clearly, and in limiting scope for misinterpretation by presenting the headline savings against Asda’s competitors in percentage rather than cash terms. Where Asda is significantly more than 10% cheaper, as it was in my case, it also seems odd for this to be underplayed.

These quibbles aside, the Asda Price Guarantee is clearly a worthwhile and quite fun tool that is relatively easy for customers to use, and that helps Asda makes its point about price.

Whichever way you look at it, it’s also hard to dispute that I got a good deal by carrying out my weekly shop at Asda. The Price Guarantee’s ’10% cheaper’ pledge worked as promised – even in a small-format Asda Supermarket – and the analysis of my particular shopping basket, using my three different methods, seems to demonstrate the keenness of Asda’s prices relative to its competitors. Value is, and always has been, a key componenent of the Asda offer, and the Price Guarantee helps to ensure that Asda’s price credentials are widely understood among shoppers.

Herein, however, lies the problem. If Asda is indeed the cheapest of the big grocers, and shoppers recognise this, why is it continuing to lose market share?

Aldi and Lidl continue to gain

Could it be that in bigging up its Price Guarantee, Asda is actually attacking the wrong target? Look at the latest Kantar Worldpanel data, and the big gainers continue to be Aldi (with annual sales growth of 24.4%), Lidl (up 13.8%) and Waitrose. As Tesco and Asda slip, Aldi, Lidl and Waitrose have each recorded record market shares of 3.6%, 2.6% and 4.3% respectively.

My analysis indicates that Waitrose struggles to compete with Asda on price – but no-one would really expect otherwise. Shoppers love Waitrose for the customer service, the pleasant store environment and the quality products that you simply can’t get anywhere else.

Meanwhile, Aldi and Lidl win no awards for their store interiors, but the shopping experience is quick and efficient, and the stores are thriving as shoppers discover own-brand products that are eyecatchingly cheap yet surprisingly high in quality. A Price Guarantee based on ‘comparable’ items is therefore slightly undermined when shoppers are increasingly buying exclusive and ‘incomparable’ products from Aldi, Lidl and Waitrose.

Price is important, of course – especially in economically challenging times – but so is the quality of the products and the overall shopping experience. Asda, I would argue, needs to focus increasing attention on these last two factors.

One of Tesco's discount brands

Tesco’s reaction to the rise of Aldi and Lidl was to launch its own Discounter range, which worked for a while but came across as desperate, and muddied the chain’s “good, better, best” own-label strategy. Asda, wisely, has avoided such a confused approach, opting instead to highlight the price credentials of its existing ranges through the Price Guarantee.

Crucially, Asda has also started to recognise that the quality of its own mid-tier brands – or, at least, customers’ perceptions of the quality – is one of the areas where it is weakest relative to its competitors, and where Aldi, Lidl and Waitrose all present a threat. Asda’s response has manifested itself in the ‘Chosen by You’ label, launched last year, though extending the brand to too many categories – such as refuse sacks – does risk undermining any potential benefits.

Large Asda at Gateshead's Metrocentre (31 Mar 2010)

However, even once it’s convinced potential customers of its keen prices or improved quality products, Asda needs to keep getting more of those customers through the doors – possibly a bigger hurdle than you might think.

Chatting to my friends and colleagues about retail, as I have a habit to do, their first reaction to Asda often relates to it being a busy, stressful and unpleasant shopping experience – a point that I’ve previously made myself in relation to the vast Metrocentre store at the opposite end of Gateshead. It’s hard to know how widely-held this view is, but it’s a factor that drives at least some shoppers elsewhere.

If that’s the case, the small-format Asda Supermarket model may have unintended benefits. As I remarked after my visit to the new Gateshead store, there is something rather nice about shopping in an Asda that is attractively laid out and isn’t overwhelmingly large and busy. Could this, as much as the range and convenience, account for the converted Netto stores’ apparent uplift in sales to date?

If it is, it may well be through the growth of the Asda Supermarket format – rather than the traditional sheds, packed with non-food – that Asda succeeds in turning around its shrinking market share.

Former Safeway, Byker (6 Jun 2011)

It’s amazing how a throwaway remark can prompt an entire discussion on something unexpected…

In my January post about the divvying up of Netto’s North East store estate following the chain’s acquisition by Asda, I made passing reference to Birtley’s former Safeway – a store which Morrisons sold to Somerfield in 2004, bought back in 2009, but has then failed to reopen, leaving Netto as the town’s only supermarket.

My observation subsequently encouraged a whole thread of comments on the fate of former Safeways, highlighting a surprisingly large number of stores that Morrisons initially disposed of but has since reacquired following the Co-op’s takeover of Somerfield – a reflection of Morrisons’ new-found readiness to run more compact supermarkets than had traditionally been the case.

While a fair few ex-Safeways have therefore changed hands as many as three times in the last eight years, the former store in Raby Street, Byker – which I passed by a couple of days ago – is one whose retail use ended with Morrisons’ takeover.

Morrisons, Byker (6 Jun 2011)

With Morrisons having opened a large superstore in Shields Road in 2002, it was always inevitable that the nearby Safeway would be on the OFT’s list of stores – 52 in total – that Morrisons was required to divest. While other Newcastle and North East stores were promptly acquired by other grocers – Heaton and Team Valley by Sainsbury’s, for example – no offers were forthcoming for the Byker Safeway, despite its location close to the Byker Metro station and a parade of smaller shops.

Former Safeway, Byker, with parade of shops opposite (6 Jun 2011)

In December 2004, the OFT reported that:

Morrisons has sought bids for the Byker store. However, to date, no suitable bids have been received, whether from grocery operators or non-grocery operators and whether above open market value or not. Having consulted with Morrisons, the OFT is minded to direct that Morrisons may retain the store at Raby St, Byker…

With Morrisons clearly having no interest in operating a second branch so close to its first, the store – once famous for selling fewer sprouts than any other UK Safeway store – was duly closed.

The property remained empty, I believe, until 2007, when it was bought for £2m – not by another retailer, but by the expanding North East business Winn Solicitors, a company specialising in accident compensation, personal injury claims, and irritatingly catchy local radio jingles.

Rear of former Safeway, Byker (6 Jun 2011)

As you might expect, the property appears to have had some extra windows punched in, to make it suitable for office use, but it still looks for all the world like an abandoned Safeway – complete with clock tower, loading bay, distinctive green paintwork, and a space where the trolleys ought to be.

Side of former Safeway, Byker (6 Jun 2011)

Of course, with Asda set to open a new full-line store in the former Woolworths at Newcastle Shopping Park, Byker residents’ food shopping habits are set to evolve yet again in the coming months.

Morrisons’ arrival on Shields Road, nearly a decade ago, gave a much-needed fillip to a shopping centre that was, arguably, then underserved by its relatively compact, and expensive, Safeway store. It remains to be seen, however, how far the new Asda – with its easy access and edge-of-centre location – will undo those gains.

Former Woolworths (now WHSmith), Pinner, 1 May 2011. Photograph by Bryan Roberts

Many thanks to Bryan Roberts from Kantar Retail iQ, who let me know via Twitter that the old Woolworths in Pinner, north west London, has recently reopened as a branch of WHSmith.

Regular readers may recall that I visited Pinner nearly a year ago, when the old Woolies premises in Bridge Street were then occupied by Poundstar. Just as Poundstar made do with the existing Woolworths shopfront, it looks like WHSmith has similarly done little more – at least on the outside – than add its own signage to the current fascia.

Former Woolworths in Pinner, as Poundstar (14 May 2010)

With WHSmith’s opening, Pinner’s joins the growing number of ex-Woolies locations that are already on to their second occupant since the collapse of Woolworths in 2008. In some places – such as Warrington – this is simply the result of the original post-Woolies occupant going out of business, and another retailer coming in to fill the void.

Elsewhere, however, there are some interesting examples of discount retailers in ex-Woolies premises, more than likely on short-term leases, being replaced by (relatively) more upmarket or better-known names. Waitrose taking over the Alworths site in Amersham is an obvious example, as is Denmark Hill’s 99p Stores being replaced by Peacocks.

Is it just coincidence or local circumstances? An illustration of certain retailers’ relative success or evolving property requirements? Or perhaps a sign of confidence in the retail property market as big names target locations that they may have passed by a couple of years earlier? Whatever the reason, it’s fair to say that Pinner was reasonably quiet on the Friday morning when I visited last year, so hopefully WHSmith’s arrival provides a welcome boost to footfall in a retail centre that, arguably, was never the most obvious location for a pound shop.

One of Pinner’s charms is that it manages to combine a lovely historic centre with a reasonably strong retail and leisure offer. I knew next to nothing about the place before stepping off the train last year, but I was really impressed by the gorgeous High Street, lined with timber-framed buildings housing bars and independent shops.

High Street, Pinner (14 May 2010)

Tucked behind the High Street, there’s also an M&S Simply Food and a good-sized Sainsbury’s, both accessed via discreet archways and reasonably well integrated with the rest of the shopping centre.

Sainsbury's, Pinner (14 May 2010)

My general view is that places like Pinner benefit from having a healthy mix of big-name stores and interesting independents, allowing shoppers to meet most of their everyday needs while maintaining a retail centre that is distinctive and characterful.

Of course, not everyone subscribes to that view. Take those superstores away, and the romantic vision is that shoppers will revert to old-fashioned shopping habits, providing an automatic boost for the local butcher and greengrocer. Here in the North East, however, the example of Wallsend – a town that has been without its main supermarket for the last two years – reminds us that shoppers are just as capable of taking their business to the nearest Morrisons or Tesco down the road.

With this in mind, I was disappointed, but not surprised, to read that WHSmith’s arrival in Pinner has apparently provoked a “backlash” from local independent shopkeepers. Of course, local newspapers thrive on this kind of drama, and we shouldn’t believe everything we read in them. However, the “local indies object to big-name newcomer” story is wearily familiar, and often based on the flimsiest of premises.

Harrow Observer article about "WHSmith backlash"

The article in the Harrow Observer last month reported that “WHSmith is facing a backlash from independent traders in Pinner who fear the stationery giant will steal their customers”, and revealed that “a group of shops selling cards, stationery, books and printing services have written a joint letter to WHSmith bosses over their fears that independent shops like theirs will be undercut.”

On several counts this argument is bizarre. It ignores the fact that some of WHSmith’s ranges – such as stationery and newspapers – are items that Woolworths used to sell from that site without anyone seemingly complaining. Equally, anyone who’s recently been to a branch of Smith’s will recognise that its upmarket (or, some might say, overpriced) cards compete more with Paperchase or Clinton’s than with Card Factory or local independents.

What I find most depressing about this kind of article, however, is the apparent complacency and sense of blame among some indie retailers – the view that “we’ve been here forever, and how dare the big boys come in, undercut us, and nick our customers” – and the implication that everything revolves around price. What about celebrating independents’ potential to offer superlative customer service? Providing a friendly, personal touch and superb specialist knowledge that the big chains simply can’t match?

In the modern world of retailing, no retail business has – or should have – a God-given right to thrive. Success needs to be earnt. Unfortunately, alongside all the brilliant and innovative independent retailers out there, there are still too many that haven’t invested enough in brightening up dismal store interiors, in showcasing product effectively, or in offering more-than-perfunctory customer service. In short, these are shops that have coasted along, reliant on a relatively captive audience, and whose limitations are exposed when a big chain opens up down the road.

Instead of grumbling, Pinner’s indie retailers should therefore be seizing upon the opportunity afforded by WHSmith’s arrival.

Celebrate the fact that a major name has made an investment in your retail centre, bringing a vacated shop unit back into use.

Assuming local footfall increases, tap into this. Bring more customers into your own shop by offering the products that they want, wrapped up with a sense of theatre and top-notch customer service that makes people feel good and want to come back.

But, above all, don’t ask them at the till if they’d like to buy some cheap chocolate.

Netto, Birtley (24 Jan 2011)

When Asda’s sale of 39 surplus Netto stores was announced a couple of weeks ago, I noted that Birtley – a small town close to here, within the Borough of Gateshead – was home to one of the eight remaining Netto stores that Asda is still required to divest by the OFT.

As I explained then, the closure of the town’s nearby Somerfield store following its purchase by Morrisons in 2009 – and Morrisons’ failure to then reopen it – has left its 11,000 strong population unusually reliant on a single discount supermarket. What happens to Birtley’s Netto is therefore of considerable importance to the people who still use the Durham Road area for their local shopping.

Durham Road shops, Birtley (24 Jan 2011)

Given that independent grocer Haldanes has bought more than half of the divested Netto stores to date, I took the opportunity, while meeting the firm’s bosses, to quiz Chief Operating Officer Richard Collins on whether Haldanes had any interest in the Birtley store.

Netto, Birtley (24 Jan 2011)

He confirmed that Haldanes had visited the shop, and that he considered it to be a “great store” with good parking. Pressed further, he said that Haldanes had no specific plans to acquire additional stores from the OFT’s divestment list, but refused to rule out making a future bid for the Birtley store.

Birtley Netto’s problem is that many of the potential purchasers would seem to be ruled out due to the proximity of their existing shops. Clearly Asda isn’t in the picture, given that it has to divest the store in the first place, while Morrisons – which still owns (and is trying to dispose of) the vacant Somerfield site opposite – is unlikely to be interested.

Tesco, Chester-le-Street (24 Jan 2011)

Meanwhile, Sainsbury’s has a superstore three miles away at Team Valley, and Tesco and Iceland (and Morrisons) have shops at Chester-le-Street, the same distance away in the opposite direction. This only really leaves other discounters – Lidl, Aldi or Haldanes’ new UGO venture – in the frame. However, with a larger supermarket development still possible on the Somerfield site in the future, a hard discounter is, in any case, more likely to be able to compete with whatever new store might open on that site.

Closed down Somerfield, Birtley (24 Jan 2011)

Given the positive feedback from Haldanes, it seems that if the shoppers of Birtley fancy their Netto becoming a UGO, then it’s in their hands to do something about it.

Haldanes’ bosses are reading this blog, so feel free to share your thoughts below, or drop Haldanes a line directly. Who knows, perhaps Soult’s Retail View can harness local people power to help attract an expanding retailer to Gateshead?

Morrisons store

The Netto store in my old hometown of Tamworth is one of 16 sites that Morrisons is set to acquire following Asda’s purchase of the Netto UK business. The stores are among 47 that the Office of Fair Trading (OFT) has required Asda to sell to competitors, to avoid a lessening of consumer choice in those areas where Asda and Netto currently compete with one another.

With Asda already having a vast store at the nearby Ventura Retail Park, it was always likely that Tamworth’s Netto would be one of those that it would have to dispose of. However, with Sainsbury’s, Aldi, M&S, Iceland, Farmfoods and Tamworth Co-op also all currently represented in either the town centre or at Ventura, there was a fairly limited pool of potential purchasers.

Morrisons already has a Tamworth superstore in Marlborough Way, Wilnecote – a couple of miles from the centre of town – but its purchase of the Netto site should give a boost to the town centre’s retail offer by providing a much wider range of goods than Netto currently offers.

Gungate Precinct with Kwik Save store in the early 1990s

The purchase by Morrisons is the latest development in a fairly turbulent history for the Upper Gungate supermarket site, which was originally built as a Kwik Save in the 1990s. For a time, it was open concurrently with the previous, smaller Kwik Save in the Gungate Precinct – a unit that had housed Tesco and Victor Value back in the ’70s and ’80s. However, that Kwik Save store eventually closed, and was occupied by Pound Plus until the precinct’s demolition last year.

Following Somerfield’s disastrous 1998 purchase of Kwik Save, the Upper Gungate Kwik Save briefly became a Somerfield, before being turned back into a Kwik Save again. The store then closed down following Kwik Save’s collapse in 2007, standing empty for a year before being reopened as a Netto in August 2008.

Assuming that Asda’s acquisition of Netto receives final approval by the OFT, the handover of Morrisons’ stores is expected to commence on a phased basis in March, with conversion to the Morrisons format taking three months. On this basis, Morrisons should be trading from the site sometime in summer 2011.

Given Morrisons’ retail pedigree, there’s every chance that the store’s latest incarnation will be more long-lived than its increasingly fleeting predecessors.

Former Woolworths (now The Co-operative Food), Gosforth (16 Jan 2010)

I happened to be in Gosforth yesterday evening (paying a visit to the very good Loch Fyne restaurant), so used my mobile to capture a shot of the recently opened The Co-operative Food – previously mentioned here – which occupies the High Street’s former Woolworths site. If you need a reminder, here’s what it looked like back in September:

Former Woolworths, Gosforth (27 Sep 2009)

It’s certainly good to see the new Co-op store bringing some colour and life to that part of the High Street, though I am still quite surprised at the Co-op opening up in an area that is already served by decent-sized Asda and Sainsbury’s stores. I’d be interested to hear what any of the locals think about the Co-op’s arrival, and whether it really brings anything new or distinctive to Gosforth High Street.

M&S store

The news that the current boss of Morrisons, Marc Bolland, is to become the new Chief Executive of Marks & Spencer brings to an end months of speculation in the retail industry about who would – and should – succeed Sir Stuart Rose. Though Bolland’s name had been mentioned as a possible candidate, the announcement comes as something of a surprise, with retail commentators suggesting of late that an internal promotion was more likely.

While the focus of news coverage is inevitably on what this appointment will mean for M&S, the question of what it means for Morrisons is equally significant, if not more so. When Bolland arrived at Morrisons in September 2006, the business was a mess, suffering from a severe case of indigestion after swallowing up its much bigger rival Safeway in March 2004. Though Sir Ken Morrison was undoubtedly a superb grocer, his team proved ill-equipped for the scale of the integration task that faced them, with the business posting its first ever loss - of £313m – for the 12 months to the end of January 2006.

Morrisons store at Redcar

Since Bolland arrived just over three years ago, the company has been transformed from something of a laughing stock into a darling of the retail industry and the city. The old garish black and yellow logo has been overhauled, store environments and ranges have been improved, and canny advertising has pushed the distinctive ‘Market Street’ concept as underpinning Morrisons’ reputation for both freshness and value.

In contrast, when Morrisons first took over Safeway, there was some snootiness about the predominantly northern retailer venturing into the south and Scotland, and a sense – not entirely unreasonable at the time – that Morrisons didn’t really understand the very different shopping habits of the Safeway customers that it had inherited.

In a sign of how perceptions of Morrisons have changed since then, it no longer stretches credulity to imagine the recent stars of the retailer’s adverts – such as Alan Hansen, Lulu, Nick Hancock or Richard Hammond – actually shopping at their local Morrisons (more than can be said for the shortlived Sharon Osbourne Asda ads…)

Given the challenges he inherited and overcame at Morrisons, Bolland seems like a good choice for the high-profile role of M&S CEO, where there is still work to be done in buoying food sales and sorting out the most tired outposts of the store estate that have so far missed out on refurbishment.

Morrisons store at Seaburn, Sunderland

In turn, the Morrisons job also offers notable challenges to whoever replaces Bolland. To date, Morrisons has had little or no presence in some areas of the market in which its main competitors – Tesco, Sainsbury’s, Asda, even Waitrose – have built up significant strength, such as homewares, online shopping, clothing and convenience stores. Compared to Tesco and Sainsbury’s, for example, Morrisons’ store format is relatively inflexible, with even the shops acquired from Safeway often struggling to offer as satisfying an instore environment – particularly around ‘Market Street’ – as the generally larger, purpose-built Morrisons stores.

None of this has mattered much while Morrisons’ sales have been buoyant, and market share has been growing. However, should the retailer’s growth stutter, Bolland’s successor will have to address whether Morrison’s existing store formats, and clear but relatively narrow focus on being “the food specialist for everyone”, are really the most effective way forward in a highly competitive market.

B&Q store. Photograph by David Wright

I was interested to read Retail Week’s comment piece today on the introduction of self-serve checkouts to B&Q, and to note the author’s scepticism over whether such a system really works in the context of a DIY store.

As I commented on the article, self-service checkouts were also in place at B&Q Scotswood (in Newcastle) when I shopped there a week ago. Having never used such a service before, I was pleasantly surprised by the speed and ease of use.

There are a couple of provisos, though. First, I was only buying a couple of small items that could be easily carried, so I can’t really comment on how a self-serve checkout might work when making a larger or bulkier purchase.

Second, the usefulness of self service terminals is obviously influenced by the efficiency – or otherwise - of the regular checkouts. Given that B&Q Scotswood routinely has only one or two checkouts open, even at the height of the weekend, I was rather pleased to have the opportunity to circumvent the long queues. In other circumstances, I would probably still prefer to be served by a real person.

Beyond B&Q, it does appear that self-serve checkouts are becoming more and more commonplace these days – just recently, for example, I noticed that rather a lot had been installed in the revamped Sainsbury’s at Team Valley.

As always, it would be interesting to hear your experiences. Have you made use of self-serve checkouts, either in B&Q or elsewhere, and if so what did you think? Is it really quicker and easier than waiting in a regular checkout queue?

Thank you to David Wright for the use of the photograph used in this post, which is © Copyright David Wright and licensed for re-use under the Creative Commons Licence.

Former Woolworths store

Since my previous post three days ago, there have been several more announcements regarding former Woolworths sites that have found new occupants:

• Sandbach: WHSmith - full story
• Sheringham: Sainsbury’s - full story^{[broken link removed]}
• Taunton: TK Maxx - full story

TK Maxx has some experience in picking up city centre Woolworths sites, having taken over the lease of the Southampton Woolies as far back as 2007. More recently, it has already acquired closed-down Woolworths premises in Worcester, Milton Keynes and Lancaster.

As before, any updates or comments relating to other former Woolworths sites are very welcome!