Big names squeeze out smaller retailers

Independent corner shops are being swallowed up by "local" convenience stores operated by the supermarket giants.

The number of independently owned convenience shops has fallen by 7 per cent in the past year alone, according to a report by the think-tank IGD.

The decline of the traditional corner shop has been exacerbated by the move by the big supermarkets into the local sector. Convenience multiples - retailers operating at least 10 stores such as Tesco Metro and Sainsbury's Local - have increased their sales by 18 per cent in the past year.

Independent convenience stores now account for just half of all shops and only a third of all sales. According to the IGD, by 2010 independent stores will account for just a quarter of sales.

Rhys Williams, analyst at Seymour Pierce stockbrokers, said the IGD's findings reflected a general trend. "Sainsbury's and Tesco are both targeting the convenience sector as an area they want to grow," he said. "Independent stores trading against them can't compete and then they close."

Responding to the IGD report, Andrew Simms of the New Economic Foundation think-tank said: "This is not the working of a free market, but increasingly a feudal retail economy run by a handful of chain-store barons. Unless we want to become a nation of ghost and clone towns, we need regulators with teeth prepared to protect an open market."