It is going great for independent UK retailers according to a new study performed by ShopTalk, and there are also a couple of surprises in it. ShopTalk is a not-for-profit service operated by IT distributor Target Components to provide free impartial business advice to IT resellers.
The most surprising find was that independent retailers that have heavily discounted prices do not enjoy better sales than those charging the highest prices. The ones selling the most are the ones placed in the middle of the field, most likely as a result of people not wanting to pay too much but in return also don’t trust a product sold too cheap.
ShopTalk didn’t just compare the figures of independent shops, they also took in large chains into the comparison. The Study found that independent retailers are offering both lower pricing and a wider range of products and services than their larger rivals. Independent retailers offer prices that are 9% lower on average, that’s £9 of every £100 marker and that’s not insignificant. The only bigger company that beat the independent retailers on an average scale of products offered was PC World, they offered 50 of the 65 items surveyed. But over half of the independent retailers also offered more than the 50, and that’s a double-up from last year’s survey.
“Under-pricing for indies simply doesn’t work – our research shows it depresses sales and stifles profits – so it’s encouraging to see signs that support what we hear anecdotally, that indies are taking a more considered approach to pricing.” said Shoptalk’s John Coulter on the report
Despite a drop in the price margin over last year’s result, independent shops continue to improve their sales for a more sustained business model. The number of lines selling ‘ok’ or better have improved from 71% to 75% over the last year.