Country Competition
by Margaret Heffernan

Competitors. Every VC and bank manager will ask you who your competitors are. If you say you have none, they'll think you don't know your market - or are proposing to enter a market no one else in their right mind wants. Most entrepreneurs identify a few competitors and construct self-vindicating scenarios that prove that they will triumph, leaving their competitor bloodied, bowed and broke.

But what happens when the entrepreneur's competitor is Tesco? Isn't that the point at which sane adults turn and run away screaming?

Not if you are Tish and Andy Jefferies. Their Somerset shop is just down the road from Tesco and offers pretty much the same stuff: meat, milk, bananas, carrots, cheese, jam, bread, easy parking, loyalty cards, a café. Ask them how their prices compare to Tesco's and they don't know. They don't send in invisible shoppers, they don't even subscribe to retail data that would tell them. They don't know Tesco's prices because they don't care. Are they out of their minds?

Far from it. Andy and Tish have beaten all their revenue projections and won awards because they don't compete on price. They compete on experience. From the baby barn where customers see and touch calves, lambs, guinea pigs and rabbits to the milking parlour where children see where milk comes from. From the black and white cow patterns that decorate both building and produce to the holly wreath Tish wore selling Christmas trees. "There are things we can do here," says Andy, " the smell and the wind in your hair. You can't do that at a supermarket. Look at the calves, look at the milking. Some people don't even know that a milk cow has to have a calf every year! That is what it is all about. Not price. Environment and service. It's like giving them the crown jewel."

Andy's right, of course: for all its might, Tesco can't compete with this. Both companies claim - and, I think, demonstrate - that they follow the customer in everything they do. But customers are complex and want more than one thing. Tesco might win on value -- but Farrington's wins on values. Farrington's commitment to local producers makes people feel good. They like knowing which farm their meat came from, that their food contains no fillers or preservatives. They like supporting local farmers; it may be as close to farming as some shoppers ever get.

Not competing on retail prices means not competing on wholesale prices either. "We just buy at the price the farmer thinks is fair, and sell at a price we think is fair - and if it sells, we keep doing it. And if it doesn't, we tell the farmer it's too expensive. And it works. You don't have to screw the farmer." So shopping at Farrington's becomes even more than an experience. It becomes a cause.

Consistent with the emphasis on local produce is a huge emphasis on customer service - not the kind that reeks of corporate training but the innate kind that can't be taught. Tish says, "We employ smiles." Starting with five employees, they now have 45. Here again, they refuse to compete. Neither Tish nor Andy knows how their pay compares to Tesco's and they haven't hired any staff from there. Hiring and training their own kind of people is all part of the shop's consistent brand of authenticity. "The whole team knows that customers are the most important thing in the shop, says Tish. "We cherish our customers." One of those customers is the personnel manager of another local supermarket who brings her staff in to see what real service looks like.

Of course Tesco and Farringtons can't compete on scale. Tesco takes more per minute than Farrington's took on its best day of business. But they do compete for the money in our pockets. Tesco's tills now take 12.5p of every pound spent in Britain in the markets in which it competes - and CEO Terry Leahy says he's after the other 87.5p. That means he wants, in effect, to see shops like Farrington's put out of business.

I don't think he'll succeed. Not just because customers are more complex than pound coins. Not just because Tish and Andy and their army of smiles will work so hard to build an emotional, not just financial, connection with loyal customers. Leahy aims to get more of our money by building bigger stores selling more products - monolithic shops for monolithic customers. So Farrington's Farm Shop does what entrepreneurs must do: offer real choice and genuine alternatives. The Jefferies have done what smart business people do the world over: they've refused to let the competitive landscape be defined by their competitor. They know that if they tried to compete with Tesco on price, they'd be slaughtered. They've defined their own market and gone after it with obsessive devotion. Instead of playing the competitor's game, they chose their own - one they can win on their own terms.

And they have one other secret weapon: location. Far from putting them out of business, the arrival of the superstore drives more traffic past their cow signage every day. It's a kind of commercial jiu jitsu, turning the strength of your opponent to your own advantage. What I love about Farrington's isn't just the food and the service but the smart way that the Jefferies have resisted hackneyed, adversarial thinking. Competitive strategies like theirs keep quality businesses alive.

This article was originally published in Real Business magazine

© Margaret Heffernan, 2004

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