Anyone will tell you that supermarkets are big business. But in Scotland it rings particularly true. The country’s retail sector is highly competitive and serviced by a number of key players. As well as the established chains, namely Tesco, Asda, Sainsbury’s and Morrisons, new-kid-on-the-block Waitrose is also vying for the public’s affection.
Tesco is Scotland’s largest private employer with more than 22,000 staff in its stores, distribution centres and other operations across the country.
The retail giant has 92 stores spread across Scotland; 68 are in urban areas, with an additional 24 stores in rural areas, says Nick Gellatly, Tesco’s corporate affairs manager.
Tesco hopes to ‘gain consent’ for a small number of new stores in the next one to two years and planning consent has been granted for two outlets in Wick and Lockerbie.
“The Wick store will be the first of its kind in the UK and will represent Tesco’s flagship environmental store,” says Gellatly. “The proposed eco-store will reduce emissions at every stage of its development - during the construction phase alone we hope to reduce carbon emissions by 50 per cent.”
The building itself will be constructed from approximately 33 per cent recycled material, 33 per cent recyclable material and 33 per cent sustainable material. “This has been made possible following a company-wide decision to invest £100 million in sustainable environmental technology,” Gellatly says.
Asda is another retail chain that is expanding its sphere of influence. It claims to have a very loyal and consistent customer base in Scotland and says the country is part of its traditional heartland.
There are 44 Asda stores across Scotland. New stores that have already opened this year are Glasgow Fort, and Asda at Huntly and Alloa. Another two stores will be opened before the end of the year in Galashiels and Grangemouth.
“Collectively, they mark a £35m investment and will between them generate 750 jobs in the local community,” says Glenn Bowles, Asda’s regional md for the north. “We’ve yet to announce our expansion plans for 2007 but there will be more stores opening as we continue to strengthen our commitment in Scotland and further build our partnerships with local suppliers.”
Scotland has always contributed heavily to retail profits and Sainsbury’s recently reported a 6.5 per cent rise in sales at its 24 Scottish stores.
The retailer has added almost 100 locally sourced products since April, according to a Sainsbury’s spokeswoman, who says that 1,000 Scottish products from just over 100 suppliers are now on sale throughout the group’s UK estate. This accounts for £350m worth of business every year.
Indeed, the resurgence of interest and appreciation of regional produce is keenly felt in Scotland. In addition, as consumers continue to scrutinise food miles, retailers are keen to emphasise that they use local sources where possible.
“Our consumers in Scotland are aware of the need to support Scottish produce while at the same time look for value and choice,” says Gellatly.
Tesco works with 100 Scottish companies which supply more than 1,000 product lines to its stores. The retailer works with seven direct suppliers of fruit and vegetables which in turn work with many local farmers.
“This figure is steadily increasing and we are currently looking at other suppliers to join the Tesco range,” Gellatly says. “We aim to utilise the variety of high-quality produce that Scotland has to offer, and in turn make these available to our customers in Scotland and further afield. Tesco is committed to ensuring that Scottish consumers have access to Scottish produce.”
Bowles agrees that regionality is particularly important to the Scottish customer. He says: “Asda pays careful attention to its offer in Scotland and recognises the importance of local preference. It’s a huge customer expectation these days to have local ranges throughout the UK - but even more so in Scotland and Northern Ireland.”
Indeed, retailers are keen to capitalise on growing consumer awareness and, in many outlets, are more than happy to promote the Scottish connection. A number of supermarkets, including Waitrose, devote a small section of fresh produce space to Scottish-grown fruit and vegetables.
Waitrose has made a large impression in the capital in just a few months. The retailer opened two new Edinburgh branches in June and has described the expansion into Scotland as “exceptionally successful.”
Its stores are located in the Comely Bank and Morningside areas. Strong fruit and vegetable sales helped Waitrose exceed expected turnover at its new Scottish stores. “It’s very clear to us that people in Edinburgh were more than ready for Waitrose’s mix,” says Edinburgh managing director Andrew Murphy. “Our only problem has been meeting and coping with demand that was more than expected.”
When asked to comment about further store openings, Waitrose was in no mood to be rushed. “The nature of the supermarket business is that the right sites don’t become available always exactly when you want them,” Murphy says. “We had to wait a couple of years longer for these sites than we might ideally have wanted.”
However, the chain is looking to increase its presence in Scotland, with a possible 10 sites, including Glasgow, under evaluation.
Supermarket operators agree that competition to find new retail sites in the country is intensifying. Nevertheless, many are optimistic about developments.
“When you look around Scotland, the big opportunity is small towns,” Bowles says. “Huntly is a good example of this. We are committed to supporting the small towns in which we operate and in Huntly we are working with 15 local businesses through our unique ‘Collect and Save Scheme’.
Asda claims that this initiative, which has the backing of the Huntly Business Association and the Aberdeenshire Town Partnership, directly benefits many local traders, from butchers and bakers to florists, pharmacies and even small cafes in the area.
“Far from taking business away from the area, the Asda store is helping attract many more customers to Huntly, some coming from 40 miles away,” Bowles claims. “Thanks to the new scheme, these new customers are also spending money in local shops in the town centre, proving that supermarkets can work hand-in-hand with local retailers when they come to town.”
Chains are also keen to show that they are doing their bit for the community and are involved in a number of initiatives.
Gellatly says the Tesco Regeneration Partnership schemes often accompany certain new store developments and the Wick store is the most recent partnership to be approved in Scotland.
“These schemes provide help to regenerate local communities by increasing affordable food access and creating employment opportunities, particularly for those who have been unemployed for long periods of time,” Gellatly explains.
Asda runs a ‘very active’ community programme, which also involves an initiative called ‘Get Involved’. “Each year our stores in Scotland are given a budget to make a difference in the communities where they work,” Bowles tells FPJ.
Meanwhile, the need to reduce waste and sustain resources is a concern for most large businesses and Scotland’s retailers are no exception.
Tesco is piloting a scheme to remove an estimated 260 lorries a week from Scotland’s roads. “In partnership with Eddie Stobart, we have launched a ‘green train’ which will make daily deliveries of both food and non-food products to Scotland by rail freight to Grangemouth, saving an estimated 4.5m road miles and around 6,000 tonnes of carbon dioxide emissions a year,” Gellatly says.
Other environmental initiatives include investing in ‘green technologies’, and embarking on schemes such as the Tesco ‘bag for life’, which rewards customers for re-using bags when they shop.
Scotland will see a number of new store openings in the next 12 months and with discount retailers Aldi and Lidl also announcing expansion plans, the future looks bright for retail north of the border.
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