UK's small food retailers starved of market share

In a market that is so competitive that the proverbial Goliaths are slaying each other, what chance do the slingshot-wielding minnows really have?

Today (16 April) Tesco announced a six per cent fall in profits, while both the Co-operative Group and Morrisons have recently announced that they are looking to sell or have sold parts of their business as they fight for survival.

Tesco still had an annual profit of £3.3 billion to fall back on so it isn’t all bad news. However, dishearteningly for the UK's SMEs in the space, the company's dip in expected profits came as it lost market share to rival conglomerates Lidl and Aldi.

The landscape for Britain’s small and medium-sized food retailers is far more bleak; according to Begbies Traynor’s latest Red Flag update, out of the 2,823 UK food retailers suffering from signs of distress, 95 per cent are SMEs.

While it would be wise to heed the warning that being a small, independent grocery store might not bring in the bacon, for any business buyer who might have ideas for alternative uses of the spaces being left behind by these failing stores there is likely to be a steady stream of them coming on the market.

Whereas niche, ethnic, organic or simply local stores used to fill a gap in the market, this is just not the case any more. The increase in the amount of scaled-down versions of the supermarket giants – whatever suffix they carry – coupled with the fact that more of the big names now cater to specialist foods at cheaper prices means that customers are just not engaging with their local shops.

With this trend only likely to accelerate over the coming months and years, it is likely that this sector will continue to offer up many buying opportunities for individuals looking for a new venture or businesses with ambitions to expand.

Share this article

Latest Businesses for Sale

View more businesses for sale