The takeaway from this article is that Sainsbury’s hasn’t taken off in Ludlow. It is only trading at 60% of the company benchmark for that size of store. M&S Food will be a head to head competitor. If M&S opens, Sainsbury’s will lose more trade. If the analysts are correct, it will then be trading at just 55% of the company benchmark.
The planning system supports competition. If one supermarket leads to closure of another, that is of no concern to planners. Sainsbury’s might not close but in the current retail environment any business that is not hitting high fives is at risk of shutting its doors permanently.
These are tough times in the retail sector. I’ll write on any potential impact of M&S Food on the town centre in future article.
There have been mixed reactions to the design of the proposed M&S Food store on the edge of town. Some like it. Some like me don’t. Many people want M&S to come to town, some think we don’t need it or it will lead to even more shop closures in the town centre. Many think it should be located on the former Budgens site.
This article looks at a different aspect of the proposal. The impact M&S Food will have on Sainsbury’s.
This is the second application from M&S for a food store in Ludford. The first was withdrawn after it became clear that it would not be approved because of its design and because the retail impact assessment was not up to scratch. The current application (23/04457/FUL) is accompanied by an up to date impact assessment. This runs to 115 pages.
The retail impact assessment is based on a study area that stretches from Clun to Tenbury and Cleobury Mortimer, and from Craven Arms to Orleton. The area has an estimated population of 43,639 people, with 11,085 of those in Ludlow (25%). I’ll be looking at who shops in Ludlow and where people who live in Ludlow shop in a later article.
Tesco has an estimated turnover of £20.20 million, double its benchmark [1] turnover of £10.36 million. Tesco is classified as being in the town centre. Aldi is edge of centre and has an estimated turnover of £18.82 million, nearly twice the company benchmark of £10.33 million. Both stores are regarded as “overtrading”.[2]
Sainsbury’s has an estimated turnover of £9.93 million, just 60% of its benchmark of £16.55 million. The analysts predict that M&S Food will draw 27.5% of its turnover from Sainsbury’s by 2028. That will reduce the take at the tills to £9.73 million, just 55% of the company benchmark.
Sainsbury’s will need to revolutionise its offer to take £8 million more each year to hit the company benchmark. Or, with the Rocks Green store substantially underperforming other stores, Sainsbury’s management might decide to close the store.
Could Sainsbury’s improve? Everywhere can. Being more receptive to customers who do not drive will help a little. A bus stop and bench on Duncow Road would be a real bonus. But shoppers on foot will not be enough to turn an underperforming store around.
Could M&S Food suffer eventually suffer the same fate as Sainsbury’s? Will it fail to thrive in our rural location. I suspect not. There is a lot of support for M&S in Ludlow and the surrounding area. It could make a better go of it than Sainsbury’s has managed so far. And if Sainsbury’s closes, M&S is likely to take much of its trade.
We know that making predictions about retail performance is pretty much a fool’s game. Witness Shropshire Council’s disastrous purchase of the Shrewsbury shopping centres. But should Sainsbury’s close, it seems unlikely that the proposed M&S Food store will have enough car parking spaces to cope.
Notes
[1]. The benchmark turnover for each supermarket group is based on the average across the group for that size and type of store.
[2]. Overtrading is retail industry jargon. Many shoppers would regard overtrading more prosaically as being busy and profitable. However, in battles to introduce a new supermarket into the local market, overtrading is often used to justify claims a new store is needed.
The building of Sainsbury destroyed quite o few acres of countryside, trees and hedges. M&S will do the same.
If Sainsbury’s close as a result a derelict retail site will marr the outskirts of our town.
We have a perfectly sized empty Supermarket in the centre of town which could easily house an M&S Food only store and not destroy yet another bit of green belt
This is really sad news about Sainsburys.
At last we have a large, airy, warm supermarket with plenty of car park spaces that are not the absolute minimum width.
The lights are on when it’s dark outside unlike Tescos who keep theirs off from 0700 until 0900 (why?) and then and only then go to full brilliance, making their 23 year old store even more drab inside than it is now with the lights on.
Mention was made of Sainsburys needing a bus stop, good point and it will also need to up its game in keeping the shelves stacked, inexcusable to have day after day of very limited milk supplies on offer with the same in the bread department, there are often shortages there. These are supermarket basics.
They might even like to consider opening and encouraging the use of the conventional staffed tills rather than pushing the DIY ones though myself I find the self scan with the mobile phone works well and only one pick up of the goods.
Maybe there is a work in progress and they will get their act together, let’s hope they do…
Of course they could reduce their prices a bit!
Sainsbury’s in Ludlow has one huge drawback for me – it often only has one staffed till open, and on occasion not one. Self scan is fine for a basket of items, but for a trolley-load, no. Tesco always has several tills open. On my last visit to Sainsbury, several staff stood around with only two tills open, and one of those then closed despite queues building. I have even seen one staff member having to operate the one open till and then run to the self checkout to help there at the same time. Management need to put the customer first, otherwise they (I) will go elsewhere. A simple tannoy call for all checkout staff to report to the tills would suffice. Tesco always has a store manager clearly visible who monitors any build-up of queues – I never see such a person at Sainsbury. However, the few staff I do meet at Sainsbury are lovely.
I wanted to dislike Sainsbury’s as my old house is right behind the store so I fought against it at planning. I’ve moved now so it’s only blight on my view is the ridiculously bright sign you can clearly see from 5 miles away. There’s a lot to like, friendly staff, a carpark that you can safely park a modern car in and the only public toilet in town that’s always open. Why don’t I shop there much? If I’m driving home from work I pass there last, if something’s out of stock I need to double back rather than just cross the road to Tesco. Speaking of which, if they are short of customers a footbridge over the A49 there would cut a lot of people’s walk to the shops down significantly so might convince them to shop there more often.
Andy just for me where did you get your benchmark figured from.Just interested
The Retail Impact Assessment for M&S
Andy, are these stores owned by the supermarkets – or leased from property companies? Whoever owns them, what are the obligations on the owners/operators if the building is not commercially leased/operated in line with the planning permission. As someone has noted the last thing we need is an empty decaying supermarket building on a very visible access road to town. I would hate to see anything like the abandoned service stations we see decanting on the sides of roads when the operator decides they are no longer commercial. – if Sainsbury’s & M&S do indeed battle it out I would expect Sainsbury’s to lose and that is the most visible building. I understand the planners do not involve themselves in the commercial viability of the proposed buildings (though I think this is very short sighted as they do use up valuable land and there are legacy issues as other commentators have noted). However, it would be great if the planning approval included a clause where if the building is unused for a period (say 12 months) and they have no contract for near future use, the building is made available to ‘the local community’ (in whatever guise) for use within the community at peppercorn rents if the do not return the site to its former state. Frankly I would prefer to deter a retailer flying a kite than risk the leaving us with a white elephant eyesore on our outskirts, if their commercial gamble fails. Note: I would operate a much more friendly developer/investor policy for non retail businesses looking to invest in the area – and few of these actually want these high visibility sites anyway.
The unwinding of planning restrictions and control of use began with John prescott when he was deputy PM in the mid-2000s. The Tories have continued to weaken controls. It would not be legal to impose a condition that a building is kept in use. It is entirely down to the site owners whether commercial properties remain empty. In this case, Davies Street own Sainsbury’s and Arbury will own M&S.The planning system often works against coherent land use and community interests. That was not the case until Prescott took control of planning.
In my opinion, the suggestion that building M&S will or could affect Sainsburys profits is a scare tactic comment. Sainsburys are performing badly even without M&S and need to up their game and attract more customers or accept they can’t compete.
I am not sure who I am meant to be scaring, if anyone. I am pointing out my reading of the data. That may be wrong. I am not oppsing M&S or supporting it. The same applies to Sainsbury’s.
The way I interpreted it was that Sainsburys performance is surely a separate issue and the present situation is without competition.
Further to my last post… if they developed that spare bit of land to the east of the site into a petrol station that would surely help them a great deal in attracting customers especially if they priced it as theirs in Shrewsbury…
When Sainsbury 1st opened I was really excited. It is basically a failed store, it has not delivered on what it initially promised. The Ludlow store regularly does not have what you want, with empty shelves and ridiculously priced products. Its stock range (apart from the first months of opening) is not what I am looking for. I am still waiting for the promised petrol station. When I do go I spend most of my time at Customer Services sorting out the chronic pricing mismanagement that exists at Ludlow. I basically do not enjoy using Sainsbury’s Ludlow, and would see its loss as a benefit to the area. With luck Lidl might take it over….
At Tesco and Aldi in Ludlow you have staff who are genuinely wanting to give customer Service, unlike Sainsbury’s Ludlow. Sainsbury is of no benefit to Ludlow due to this outlet not being fit for purpose.
I welcome M&S coming to Ludlow and if they do will certainly not visit Sainsbury Ludlow ever again, but it will encourage me to go to Ludlow more thanI currently do.