OPINION
A return to the corner store?
The pandemic has seen consumers increasingly shop locally, and retailers are taking advantage by experimenting with smaller formats. But can the traditional corner store be replicated?
NORRELLE GOLDRING Global Consultant – Shopper Journey
Ultimately what differentiates a corner store from a simple convenience store is not only its range but its ability to customise.” – Norrelle Goldring, Global Consultant – Shopper Journey
T
he early 2020 UK TV series Back in Time to the Corner Shop charted the rise and fall of the corner store in Britain, but it could equally have been the US or Australia. With the advent of supermarkets and chain convenience stores, traditional ‘mum and pop’ corner stores have pretty much been wiped out in some western markets due to inability to compete on price, and a lack of differentiation. But with the consumer push toward shopping locally and supporting local businesses arising from COVID, exemplified here by the resurgence of IGA, perhaps the time is ripe for a return to the traditional corner store. Certainly, the supermarkets have been attempting their versions of it in the past couple of years, with Aldi the latest to enter the fray with its ‘Corner Store’ concept launched in North Sydney in July. Albeit at twice the footprint of an average convenience store, theoretically what makes it a ‘corner store’ is its range tailored to local constituents. Coles has been trialling ‘Local’ formats such as at Rose Bay, partnering with local butchers, bakers and cafes. Woolworths has been rolling out Metro smaller footprint stores, although some CBD and transit locations have suffered or closed due to COVID-related footfall reductions. The small local format is seeing a rise in some markets, due not only to consumer demand but because operationally they are cheaper to build, rent, maintain, and run than a larger format store. In Russia ‘ultra-convenience’ small format withinshort-walking-distance stores are forecast to represent a quarter of food retail sales by 2025, up from 10 per cent in
2021. Ultra-convenience stores, spearheaded by Mercury Retail’s Red & White and Bristol chains, now represent 43 per cent of total convenience, and sales were up 27 per cent in the first half of 2021. The number of ultraconvenience stores is forecast to double by 2025, with sales value forecast to increase by three-times to RUB5 trillion over the same period.1 In some markets the traditional corner store never went away and is still a mainstay. In India, Indonesia, and the Philippines for example, more than 80 per cent of grocery shopping is done at India’s 15+ million kiranas, Indonesia’s 3.5 million warungs, and the Philippines’ 800,000+ sarisaris.2 Often the corner stores in these markets are run by at least two successive generations of the same family. And they are modernising in these markets, with the assistance of tech firms stepping in with services. Consumers are increasingly replacing phone-based corner store orders with ones made and paid for on WhatsApp and either picked up curbside or delivered to home. Corner store owners are increasing their range of services to allow payment of utility bills and mobile phone card top-ups. Companies such as Mitra Bukalapak in Indonesia and Jumbotail in India provide store owners with an app that allows them to order direct from manufacturers, without needing a sales call or to leave the shopfront to visit a wholesaler. Companies such as Reliance and Amazon are working on similar platforms for mum and pop store operators. The space is so hot the term ‘kirana tech’ has been coined. Retail giants such as Amazon and Walmart have begun partnering with kiranas for deliveries.3 What could this look like here? Corner stores with differentiated, niche and/or high-quality food ranges, fresh food offerings, and an ability to ‘get products in’ customised to specific shopper requests. A range of services ranging from dry cleaning to postal services, in partnerships with organisations such as Australia Post. They could use their role in the local community to use their space for workshops and events including with local charities and other local businesses. The likelihood of continued working from home means that consumers will continue to shop local at elevated levels for some time. Suburban and regional town corner store locations will do well. Ultimately what differentiates a corner store from a simple convenience store is not only its range but its ability to customise. And an historic role in and support of the local community, as highlighted in Back in Time for the Corner Shop. And this is what will be difficult for the chains to replicate. C&I intellinews.com/russia-s-ultra-convenience-shopping-s-future-isn-t-just-online-220611
1
asia.nikkei.com/Business/Business-trends/Mom-and-pop-2.0-Asia-s-traditional-retailers-embrace-tech
2
www.ndtv.com/india-news/kiranas-emerge-as-key-partners-for-amazon-reliance-walmart-2471185
3
46 December 2021/January 2022 | C&I | www.c-store.com.au
