View from City Road: More candidates for the cut-price club

Click to follow
The Independent Online
Warehouse clubs - shed-style stores where subscription-paying members can buy cut-price food and durables - are suddenly all the rage. In theory, at least. None yet exists in Britain, but CostCo of the US has been negotiating UK sites for months. Nurdin & Peacock, the cash-and-carry operator, announced this month plans for two warehouse clubs. Now Littlewoods has thrown its hat into the ring.

There are some in the retail trade who believe warehouse clubs are about to sweep the country, as they have in North America. People will be only too happy to pay their annual membership - of perhaps pounds 15 - to take advantage of discounts of 10 or 20 per cent.

But there are reasons for caution. Retail formats rarely travel well, especially across the Atlantic. Maybe the stand-offish British won't like the clubbiness that goes down so well with Americans. Perhaps they don't have the storage space at home that allows Americans to buy in bulk.

But the biggest uncertainty is whether warehouse clubs will be allowed to use land denied to the ordinary supermarkets. If they can be sited on cheap land designed for industrial rather than retail use, they can afford to offer much keener prices.

Land for a food superstore in the South-east might cost pounds 10m; the same land with planning consent for industrial use only would be pounds 2m.

Warehouse clubs are busy wooing local authorities. The traditional supermarket groups are busy lobbying the Department of the Environment. Much will depend on the fine interpretation of planning rules. Stand by for a ding-dong battle.

Comments