Big Retail Retreats, Small Shops Step In
When Poundland announced multiple store closures earlier this year, it sent ripples through the high street. For many, the headlines looked negative: another chain shrinking, another blow to retail. But as we highlighted in our article on Poundland closures creating opportunity, moments like this often open doors for agile small businesses to step in and thrive.
Now, a similar shift is unfolding with Asda. The retail giant is closing its Stepney Green store in East London, citing unsustainable rent pressures. At the same time, Asda is investing heavily in its Express convenience format, with 20 new openings in the next month across London and the UK.
What looks like turbulence for supermarkets is in fact another powerful signal: big retail is repositioning, and wherever they retreat, small businesses can move fast to capture local demand.
Why Asda is Closing Stores
Asda’s Stepney Green closure highlights the challenges supermarkets face in today’s market:
Rising commercial rents. In urban centres, big-box retail footprints are becoming too costly to sustain.
Changing shopping habits. Shoppers are shifting away from weekly “big shops” towards smaller, frequent, convenience-led trips.
Margin squeeze. Food inflation, logistics costs, and labour pressure leave supermarkets with little room to manoeuvre.
Instead of fighting these headwinds, Asda is changing strategy, trimming larger, expensive sites and reinvesting in smaller, localised formats where demand is growing.
The Asda Express Roll-Out
The shift is most visible in the Express roll-out. By the end of October, Asda plans to open new Express sites in high-footfall, commuter-heavy, and residential areas, including:
London:
Tower Bridge
Greenwich – South Street
Limehouse Station
Harringay – Green Lanes
Finsbury Park Station
Deptford – The Landings
Crystal Palace – Anerley Road
Tottenham Hale West
Harrow – Headstone Drive
Whetstone – High Road
Regional hubs:
Castleford
Stoke – Station Road
Manchester – Square Gardens
Liverpool – Parliament Street
Bradford – Toller Lane
Wigan – Mesnes Road
Smaller towns & suburban areas:
Botley – Boorley Green
Ferndown
Deepcut – Bridge Road
Horncastle
Heath Hayes – Hednesford Road
Cadishead – Liverpool Road
This expansion underlines a deeper trend: convenience is king. But it also creates a fertile environment for small businesses to thrive alongside.
Opportunities for Small Businesses
This restructuring creates two key opportunities:
The vacuum effect. In areas like Stepney Green where large stores are closing, communities don’t suddenly stop shopping. Demand remains, and local operators can step in with more flexible, cost-efficient formats.
The complement effect. In areas where Asda is opening Express stores, independents can position themselves as the alternative or upgrade stop. Big chains stock the basics; local shops can stock the better, fresher, or more interesting products shoppers still want.
Ranked Opportunity Areas
Not every location carries the same upside. Here’s how we’d rank them in terms of opportunity for local convenience-led businesses:
Tier 1: East & South London (highest potential)
Stepney Green (closure)
Limehouse, Deptford, Greenwich, Finsbury Park, Tower Bridge
Dense populations, commuter flows, and diverse communities. Perfect for agile convenience shops, grocers, or speciality food retailers.
Tier 2: North & West London Suburbs
Harringay, Tottenham Hale, Crystal Palace, Harrow, Whetstone
Family-focused, residential neighbourhoods. Opportunity for independents who can provide better quality or more personal service than chain convenience formats.
Tier 3: Regional Cities
Manchester, Liverpool, Bradford, Wigan, Stoke
Big catchments with plenty of demand, but also higher competition. Success depends on differentiation, e.g. ethnic food stores, speciality convenience, or deli-style models.
Tier 4: Smaller Towns & Rural Areas
Castleford, Deepcut, Horncastle, Botley, Ferndown
Lower footfall, but strong community loyalty. Viable for lean operators with low overheads and consistent local demand.
Why “Local” Wins: Proximity, Juxtaposition, and the Shopper Mindset
The opportunity for small businesses isn’t just filling gaps left by supermarket closures. It’s also about winning customers directly from supermarket footfall.
Anchor-store spillover. Supermarkets attract shoppers into an area, and independents nearby can see 14–26% more foot traffic as a result. Not everyone wants to buy everything at Asda, many spill over into nearby independents.
Primed to shop. Passing an Asda Express triggers the thought: “I should grab groceries.” But once in that mindset, shoppers may actively choose a local shop instead, especially if it feels fresher, friendlier, or higher quality.
Perceived quality. Research shows shoppers view independents as having better produce and more interesting ranges. Once customers are in “buy mode,” that perception can tip them into your store.
Two-stop shopping. Many customers split their basket: cheap basics at the chain, but nicer wine, fresher fruit, or artisan bread from a local shop. Position yourself as the upgrade.
The ‘boujie’ effect. Some shoppers don’t want to be seen as only buying from discounters. A stylish, local-looking store nearby lets them balance budget shopping with a more aspirational purchase.
This juxtaposition is powerful: the supermarket primes the shopping trip, but the independent intercepts it.
Lessons from Poundland: Patterns Repeat
The Poundland closures taught us that one company’s retreat is another business’s entry point. Communities still needed cheap essentials, and local operators were well-placed to capture that demand.
The Asda story reinforces the same principle:
Big chains optimise for margin.
Small businesses optimise for community.
Every closure or pivot leaves unmet demand.
Where Poundland’s exit created opportunity for discount-led independents, Asda’s restructuring creates opportunity for quality-led local shops.
How Small Businesses Can Act Now
Here’s how to seize the moment:
Scout closures. Commercial landlords are motivated to fill vacated units quickly. Rent negotiations can be favourable.
Leverage proximity. If Asda Express opens nearby, position yourself as the complement; the shop for what they can’t or won’t stock.
Hyper-localise. Adapt your range to your neighbourhood: world foods in diverse urban areas, family essentials in suburbs, deli-style in gentrifying districts.
Promote freshness. Chains struggle with the perception of “mass market.” Independents can win with quality messaging: fresh, local, authentic.
Engage visibly. Sponsor local events, put your face behind the counter, talk to customers. Personal connection is the ultimate differentiator.
The Bigger Picture: Challenger Retail Rising
This isn’t just about Asda or Poundland. It’s part of a larger structural trend: big retail is repositioning, and challenger retail is on the rise.
Consumers are demanding:
Local convenience (shorter trips, smaller baskets).
Authenticity (products that reflect culture and identity).
Experience (service that feels human, not transactional).
Supermarkets are trying to adapt, hence the Asda Express roll-out. But these are precisely the areas where small businesses naturally excel.
Opportunity Lies Where Chains Retreat
Asda may be closing Stepney Green, with more sure to follow, but the customers remain. Across London and the UK, Asda’s shift to Express proves one thing: convenience shopping is booming.
For small businesses, this is the time to act. Whether stepping into the gap left by closures or positioning alongside Express stores as the fresher, friendlier alternative, independents can capture a share of demand that big retailers cannot fully serve.
The lesson from Poundland applies again: don’t see closures as decline, see them as opportunity.
