Best European practice regarding local shops in disadvantaged rural areas by EuropeanUnion

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									                       COMMERCE 2000
                 Best European practice
                    regarding local shops
           in disadvantaged rural areas


                             Action objectives
Local shops play an important role. They supply the population, contribute to the
quality of local life, provide a social focal point, encourage the population to stay and
are a prerequisite for the development of other diversification activities.

The first objective is to encourage the modernisation of local shops in disadvantaged
areas to make them more competitive and thus ensure their survival. The second
objective concerns targeting public resources more precisely on activities with a high
job-creation potential.

By their policy of encouraging a reduction in regional and social disparities, the
Structural Funds (ERDF and the ESF, particularly via the URBAN initiative) can play a
part in attaining the objectives identified.

For that purpose the European Commission has tried to identify best practice, i.e.
existing action the effectiveness of which has been recognised and considered
transferable by experts from regions other than those where the action was
implemented.

This best practice is to be disseminated among potential users or specifying agencies:
commercial enterprises, trade associations, development agencies, chambers of
commerce and industry, chambers of trade, local authorities and government
departments responsible for implementing individual and group projects promoting
local shopping facilities, who may draw inspiration from that best practice and
transpose it to their own situation.



                                                                                        1
1     - DESCRIPTION OF THE ACTION ................................................................................................... 4
1.1       DEFINITIONS ............................................................................................................................ 4
1.2       METHODOLOGY ....................................................................................................................... 4
1.4       INFORMATION .......................................................................................................................... 5
      1.4.1 A. Business formats .......................................................................................................... 7
      1.4.2 B. Supplying of retailers .................................................................................................. 8
      1.4.3 C. Cooperation among retailers ...................................................................................... 9
      1.4.4 D. Modernisation support for retailers.......................................................................... 10
      1.4.5 E. Business and rural development................................................................................11
      1.4.6 Co-ordination: ............................................................................................................... 12
2     - BEST PRACTICE........................................................................................................................ 13
2.1     BUSINESS FORMATS ............................................................................................................... 14
    2.1.1 Local partnership in creating a multi-service shop ....................................................... 15
    2.1.2 “1000 French villages” project: procedure for setting up a multi-service shop .......... 18
    2.1.3 Examples of multi-service stores in rural areas (France) .............................................22
    2.1.4 Examples of multi-service shops in Germany ................................................................ 24
    2.1.5 Diversification of a multi-service shop (Finland).......................................................... 27
    2.1.6 Modernisation of a cooperative by transforming sales points into multi-service shops29
    2.1.7 Market survey in situ: transferable multi-service shop ................................................. 32
    2.1.8 National label for multi-service shops: “Villages de France”......................................34
    2.1.9 Regional network of multi-service shops = MSO network (multi-service outlets) ........36
    2.1.10 Modernisation of mobile shops ...................................................................................... 38
    2.1.11 Making markets comply with standards......................................................................... 39
    2.1.12 Market regulations......................................................................................................... 42
    2.1.13 Market manager............................................................................................................. 44
    2.1.14 Signs advertising markets .............................................................................................. 46
    2.1.15 Commercial restructuring of a town centre in a rural area ..........................................48
2.2     SUPPLYING RETAILERS ........................................................................................................... 50
    2.2.1 Central location of wholesaling activities (non-grocery sector) ...................................51
    2.2.2 Reduction of delivery costs by coordinated merchandise delivery ................................ 53
    2.2.3 Centralised purchasing for cooperatives.......................................................................55
    2.2.4 Voluntary chain.............................................................................................................. 57
    2.2.5 Wholesaler/retailer partnership: Progress Charter ...................................................... 60
    2.2.6 Wholesaler/retailer partnership: financing sales drives ...............................................67
2.3     TRAINING AND ADVICE FOR SHOP-KEEPERS............................................................................ 68
    2.3.1 Specific training in the operation of a multi-service shop for job-seekers ....................69
    2.3.2 Reference documents for the initial and continuing training of retailers, wholesalers
           and CCI officers. ............................................................................................................ 70
    2.3.3 Continuing training for retailers and wholesalers’ sales staff ...................................... 72
    2.3.4 Training adapted to itinerant traders ............................................................................ 75
    2.3.5 The mentor - an adviser for self-help.............................................................................76
    2.3.6 Network training in cooperatives................................................................................... 78
    2.3.7 Funding of advisory services for retailers .....................................................................81
    2.3.8 Support - advice - continuing training of retailers ....................................................... 83
    2.3.9 Joint Training for Retailers ........................................................................................... 85
    2.3.10 Distance learning........................................................................................................... 87
    2.3.11 Training support for people setting up in business........................................................ 89

                                                                                                                                                  2
    2.3.12 New technologies : Awareness-raising of sector application........................................ 92
    2.3.13 Training retailers in new information technologies ...................................................... 94
    2.3.14 Consultation of Centres of Expertise ............................................................................. 95
2.4     GROUP PROJECTS FOR THE MODERNISATION OF COMMERCIAL ENTERPRISES .......................... 97
    2.4.1 Support for groups of businesses ................................................................................... 98
    2.4.2 The Commercial, Craft and Local Interest Grouping ................................................... 99
    2.4.3 Voluntary chain: technical assistance agency .............................................................103
    2.4.4 Voluntary chain: integrated management project ....................................................... 106
    2.4.5 Modernisation of wholesalers: an intelligent approach and investment in logistical
            tools.............................................................................................................................. 108
    2.4.6 Wholesalers' grouping : common service for financing aid ........................................111
    2.4.7 Wholesalers' grouping : joint marketing support service ............................................115
    2.4.8 Overall drive to revitalise commerce and craft activity............................................... 125
    2.4.9 A quality scheme suitable for shops............................................................................. 127
    2.4.10 Support for commercial services - government subsidies for training and the
            development of rural services ...................................................................................... 130
    2.4.11 Reciprocal guarantee societies suited to commerce .................................................... 133
    2.4.12 The financing intervention of the Local and Regional Authorities in Spain........ 135
    2.4.13 Transferring small commercial businesses.................................................................. 138
    2.4.14 Smart loyalty cards ...................................................................................................... 141
    2.4.15 Common advertising campaigns.................................................................................. 143
    2.4.16 Cooperative for the sale of local produce.................................................................... 145
2.5     LOCAL SHOPS AND LOCAL DEVELOPMENT ............................................................................ 147
    2.5.1 Network of rural districts............................................................................................. 148
    2.5.2 Urban centre manager employed on a shared basis.................................................... 150
    2.5.3 Mobilisation of a village community to set up a cooperative shop.............................. 151
    2.5.4 Cooperative: partnership with customers.................................................................... 154
    2.5.5 Commerce and cultural or sporting activities ............................................................. 156
    2.5.6 Promotion of tele-working to increase the potential for local purchases.................... 158
    2.5.7 Regional business observatory.....................................................................................160
    2.5.8 Promotion of local products ........................................................................................ 162
    2.5.9 Method for determining the benefit (social and environmental value) of maintaining
    general merchandise services in rural areas ............................................................................ 164
    2.5.10 Local development initiatives competition................................................................... 166
    2.5.11 The local information magazine .................................................................................. 168
    2.5.12 Consumer opinion poll................................................................................................. 170
    2.5.13 Regional loyalty card ................................................................................................... 172
3     - RECOMMENDATIONS .............................................................................................................. 174

4     - ANNEXES ................................................................................................................................. 179
4.1     ANNEX 1 : SOME THOUGHTS ON THE SUBJECT OF SUPPLYING SMALL RETAILERS IN LESS-
FAVOURED RURAL AREAS .................................................................................................................. 180
4.2     ANNEX 2: SUMMARY OF THE FINDINGS AND CONCLUSIONS OF WORKING GROUP A ............ 185
4.3     ANNEX 3 : AN EXAMPLE OF THE BUDGET NECESSARY FOR DEVELOPING THE BASIC TECHNICAL
EQUIPMENT FOR A GROCERY SHOP OF 200 AND 400 SQUARE METRES ................................................ 195
4.4     ANNEX 4 : AN EXAMPLE OF THE BUDGET NECESSARY TO DEVELOP AN INFORMATION SYSTEM
FOR A GROCERY SHOP OF 200 AND 400 SQUARE METRES................................................................... 199
4.5     ANNEX 5: FURTHER DETAILS ON THE PRINCIPAL SOURCES OF FINANCE IN ITALY FOR
DISTRIBUTIVE UNDERTAKINGS (PRINCIPAL LEGISLATION BY ITALY AND REGION OF CAMPANIA) ..... 200


                                                                                                                                                   3
                     1 - Description of the action

                                       Definitions
Local shops:                 shops selling everyday goods and services intended for individual
                             consumers in an area serving a limited number of customers.

Disadvantaged rural areas:   rural areas where public authorities provide financial support to
                             encourage the maintenance, diversification or development of
                             economic activities.



                                    Methodology
The methodology used comprises 3 successive stages:
-    a survey on the position regarding shopping facilities in disadvantaged rural areas. Conducted
     among 1101 operators on the ground in the EU, it revealed the 5 major issues arising in the 15
     EU Member States (business formats, supplying of retailers, methods of business cooperation,
     measures providing technical support for businesses, contribution to local development);




                                                                                                 4
-    the identification of best practice by discussion groups set up on each of the above issues and
     composed of experts from various countries with complementary experience. Forms of best
     practice are collected in Chapter 2 of this document in the form of individual case studies.
     Chapter 3 presents recommendations for improving the efficiency of this best practice.
-    the dissemination of best practice.



                                     Information
The experts’ particulars are set out in the following table. The experts may be contacted to obtain
details of best practice.




                                                                                                  5
Discussion group members

1.1.1   A. Business formats
Mr/Ms         Name           Forename       Organisation                     Address                      Country   Telephone          Fax/e-mail
Mr            Brecht         Hans-Peter     UECA                             Postbus 90703,               NL        31-70 338 5605     31-70 338 5711
                                                                             2509 LS Den Haag                                          r.koops@hbd.nl
Mr            Gerhart        Roland         Délégation régionale au          5, Place de la République,   F         33-3-8821 6019     33-3-8821 6058
                                            commerce et à l'artisanat        67000 Strasbourg
                                            (région Alsace)
Mr            Kallmeyer      Dieter         Ministerium für Wirtschaft,      Wilhelm-Höpfner – Ring 4     D         49-391 567 4288    49-391 567 4444
                                            Technologie und                  39116 Magdeburg                                           poststelle@mw.lsa-net.de
                                            Europaangelegenheiten
                                            Sachsen-Anhalt
Mr            Kotzagiorgis   Stefanos       Planco Consulting GmbH           Lilienstrasse, 44,           D         49-201 41921       49-201 411468
                                                                             45133 Essen                                               SK@planco.de
Mr            Lathière       Jean-Maurice   Secrétariat d’Etat aux           24, rue de l’Université      F         33-1-43 19 40 74   33-1-43 19 47 99
                                            P.M.E., au Commerce et à         75700 Paris                                               philippe.lesne@decas.finance
                                            l’Artisanat                                                                                s.gouv.fr
                                            Direction des Entreprises
                                            Commerciales Artisanales et de
                                            Services
Mr            Laukkanen      Jarmo          Kesko Ltd                        P.O. box 135,                FIN       358-1053 22394     358-1053 23475
                                                                             00161 Helsinki                                            jarmo.laukkanen@kesko.fi
Ms            Nuding         Christa        Thüringer Ministerium für        Max Regerstraße 4-8          D         49-361-3797360     49-361-3797309
                                            Wirtschaft und Infrastruktur     D – 99096 Erfurt                                          christa.nuding@th-online.de

Mr            Vlahopoulos    Theodoros      National Confederation of        Mitropoulos Str., 42,        EL        30-1-323 8862      30-1-323 8842
                                            Hellenic Commerce                10563 Athens                                              nchc@compulink.gr
Secretariat
Ms            Perraud        Nelly          Chambre de Commerce et           23, rue Wilson,              F         33-5-53 35 80 56   33-5-53 08 01 66
                                            d’Industrie de Périgueux         24000 Périgueux                                           n.perraud@perigueux.cci.fr




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1.1.2   B. Supplying of retailers
Mr/Ms         Name               Forename    Organisation                Address                           Country   Telephone             Fax/e-mail
Mr            Bjorkman           Tapio       Kesko Ltd                   P.O. Box 135-136                  FIN       358-1053 22866        358-1053 23440
                                                                         00161, Helsinki                                                   tapio.bjorkman@kesko.fi
Mr            Carrière           Rémi        Codes S.A.                  1240, route de Nîmes              F         33-4-67 87 46 28      33-4-67 87 46 29
                                                                         34920 Le Crès
Mr            Gonzalez Cabello   Rafael      Gonzalez Cabello S.A.       CTRA. Puente Genil – Casariche,   E         34-9-57-60 71 28      34-9-57-60 22 55
                                                                         KM. 12,                                                           admigc@globalnet.es
                                                                         14500 Puente Genil (Cordoba)
Mr            Maisonnial         Jean-Paul   UCCIMAC                     Parc Technologique La Pardieu,    F         33-4-73 28 53 28      33-4-73 28 53 20
                                                                         2, Avenue Léonard de Vinci,                                       uccimac@nat.fr
                                                                         63063 Clermont-Ferrand Cedex 1
Ms            Nunes              Sonia       Manuel Nunes & Fernandes,   Rua Major Joan Luis de Moura,     P         35-11-47 88 460       35-11-47 88 499
                                             Lda                         Famoes,                                                           luisreis.santos@ip.pt
                                                                         1675 Lisboa
Ms            Rieger-Genennig    Kathrin     Forschungs-GmbH ZAROF,      Phillip-Rosenthal Strasse, 21     D         49-341-961 35 78 or   49-341-961 35 80
                                             Zentrum für Arbeits- und    04103 Leipzig                               49-342-912 12 25      ZAROF@t-online.de
                                             Organisationsforschung
Secretariat
Mr            Vona               Roberto     CIS spa                     Via Vincenzo Arangio, 83          I         39-081-7616 279       39-081-7616 279
                                                                         80035 Napoli                                                      robvona@tin.it




                                                                                                                                                                     8
1.1.3   C. Cooperation among retailers
Mr/Ms         Name        Forename    Organisation                     Address                       Country   Telephone           Fax/e-mail
Ms            Caldwell    Betsan      Welsh Development Agency         South West Wales Division     UK        44-1792-222 474     44-1792-222 498
                                                                       Llys y Ddraig                                               Betsan.Caldwell@wda.co.uk
                                                                       Penllergaer
                                                                       Swansea SA4 1HL
                                                                       Wales
Mr            Cauquil     Jean-Luc    Chambre de Commerce et           La Corderie Royale, BP 129,   F         33-546-84-11-84     33-5 46 93 02 33
                                      d'Industrie de Rochefort et de   17306 Rochefort                                             jl.cauquil@rochefort.cci.fr
                                      Saintonge
Dr            Cozzio      Enrico      Federazione Trentina delle       Via Segantini, 10             I         39-046-18 98 320    39-046-19 85 431
                                      cooperative Scrl                 38100 Trento                                                enrico.cozzio@ftcoop.it
Mr            Jarnesjö    Jan-Olof    ICA Handlarnas AB                Vallgatan 7 -                 S         46-8-585 50 236     46-8-585 50 660
                                                                       17085 Solna                                                 janolof.jarnesjo@ica.se
Mr            Konsolas    Antonios    National Confederation of        42, Mitropoleos str.,         EL        30-1-323 88 62      30-1-323 88 42
                                      Hellenic Commerce                10563 Athens                                                nchc@compulink.gr
Ms            Martinez    Guadalupe   Cámara Oficial de Comercio e     Amantes, 11, 3                E         34-978-60 15 03     34-978-60 96 08
                                      Industria de Teruel              44001 Teruel
Mr            Rossetti    Sergio      VéGé Italia Soc.Coop. a.r.l.     Via Lomellina 10              I         39-02-75296317      39-02-75296500
                                                                       20133 Milano                                                srossetti@vegesite.euromadis.
                                                                                                                                   com
Secretariat
Mr            Habichler   Juergen     Ooe Datenhighway                 4, Hauptstrasse,              A         43-732-712 010 21   43-732-712 010 12
                                      Entwicklungs-GmbH (ODE)          4040 Linz,                                                  habichler@ode.at
                                                                                                                                   http://www.ode.at
                                                                                                                                   http://www.wecan-eu.org




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1.1.4   D. Modernisation support for retailers
Mr/Ms         Name             Forename    Organisation                     Address                            Country   Telephone          Fax/e-mail
Ms            Bernard          Michèle     Chambre Régionale de             BP 25,                             F         33-4-73 60 46 52   33-4-73 90 89 22
                                           Commerce et d’Industrie          63510 Aulnat                                                    crciacce@nat.fr
                                           d’Auvergne (CRCIA)
Mr            Carus Gonzalez   Jose Luis   Consejeria de Economia           Servicio de Comercio, Plaza de     E         34-98-510 66 68    34-98-510 66 72
                                           Principado de Asturias           España, 5, 4a planta,                                           sercom@princast.es
                                                                            33007 Oviedo
Mr            Imperadori       Luciano     Federazione Trentina delle       Via Segantini, 10,                 I         39-46 18 98 111    39-46 18 98 699
                                           cooperative Scrl                 38100 Trento                                                    luciano.imperadori@ftcoop.it
Mr            Kojan            Werner      Wirtschaftskammer Österreich,    Wiedner Haupstrasse 63, Postfach   A         43-1-50105 3058    43-1-50206 3719
                                           Wirtschaftsförderungsinstitut,   Nummer 131                                                      kojanw@wk.wifi.at
                                           Gruppe Beratungsdienste          1045 Wien
Mr            Larsson          Leif        FLF                              Box 1311,                          S         46-8-441 91 90     46-8 441 91 99
                                                                            1183 Stockholm                                                  flf@algonet.se
Mr            Urbanski         Dieter      B&S Unternehmensberatung         Leipziger Straße 81,               D         49-341-44 62 730   49-341-44 62 739
                                           und Schulung für den             04430 Böhlitz-Ehrenberg                                         bsleipzig@aol.com
                                           ländlichen Raum GmbH
Secretariat
Ms            Ohrgaard         Anne        Indvandrerprojekter              Nørregade, 36,                     DK        45-33 93 12 36     45-33 93 12 76
                                                                            1165 København K.                                               inpro@online.pol.dk




                                                                                                                                                                   10
1.1.5   E. Business and rural development
Mr/Ms         Name       Forename    Organisation                   Address                          Country   Telephone          Fax/e-mail
Mr            Boyer      Didier      Conseil Général du Gard –      Hôtel du Département, rue        F         33-4-66 76 76 98   33-4-66 76 52 24
                                     DDEAT, Service du              Guillemette,                                                  bernon&c@cg30.fr
                                     Développement local            30044 Nîmes
Mr            Candon     Enda        Western Rural Development      Ballina Road,                    IRL       353-71-85 012      353-71-852 39
                                     Co. Enda Candon                Tubbercurry, Co. Sligo                                        enda@ncf.ie
Ms            Eyers      Lucy                                       Bridge View Cottage, Church      UK        44-1362 860797     44-1362 860 797
                                                                    Lane, Gressenhall Dereham                                     leyers@talk21.com
                                                                    UK-NR19 2QQ NORFOLK

Ms            Jäger      Helga       Vertertung des Landes Hessen   Hessisches Ministerium für       D         49-611-815 23 49   49-611-815 22 29
                                     bei der Europäischen Union     Wirtschaft, Verkehr und
                                                                    Landesentwicklung
                                                                    Kaiser-Friedrich Ring 5
                                                                    D – 65185 Wiesbaden
Ms            Kern       Mechthild   Ministerium für Wirtschaft,    Stiftsstrasse, 9,                D         49-61-31 162 525   49-61-31 162 207
                                     Verkehr, Landwirtschaft und    55116 Mainz                                                   mechthild.kern@mwvlw.rpl.de
                                     Weinbau
                                     Rheinland-Pfalz
Mr            Legarrea   Javier      Cámara Navarra de Comercio e   Yanguas Y Miranda, 27-28,        E         34-948-29 02 01    34-948-23 19 75
                                     Industria                      31003 Pamplona                                                ccinavarra@camerdata.es
Ms            Lejeune    Danièle     ACFCI                          45, Avenue d'Iéna                F         33-1-40 69 37 00   33-1-47 20 61 28
                                                                    75769 Paris Cedex 6                                           d.lejeune@acfci.cci.fr
Mr            Muir       Robert      Highlands&Islands Enterprise   Skye and Lochalsh Enterprise     UK        44-1478 612 841    44-1478 612 164
                                                                    Kings House, The Green                                        SALE@hient.co.uk
                                                                    UK – IV51 9BS Portree, Isle of
                                                                    Skye
Secretariat
Mr            Bianchet   Bruno       Chambre de Commerce et         2, Esplanade de l’Europe,        B         32-4-343 92 92     32-4-343 92 67
                                     d’Industrie de Liège           4000 Liège                                                    bbianchet@ccilg.be




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1.1.6    Co-ordination:

European Commission
200 rue de la Loi
B – 1049 Brussels

DG XXIII: Enterprise Policy, Distributive Trades, Tourism and Social Economy
Commerce Unit
Patrick Fourguette
Tel.: (+32-2)296.10.37      Fax: (+32-2)295.89.84        E-mail: Stefano.Missir-di-lusignano@cec.eu.int

JICS: Joint Interpreting and Conference Service
Christine Cordie
Tel.: (+32-2)295.09.28        Fax: (+32-2)295.37.36         E-mail: Christine.Cordie@scic.cec.be




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                                 2 - Best practice
The best practice set out below covers the five main topics identified by the survey (cf. & 1-3):

- business formats
- supplying of retailers
- training and advice for shop-keepers
- public projects on the modernisation of commercial enterprises
- local development

They were selected by the discussion group experts on the basis of their own experience and their
belief that these measures could be transposed to other countries.

Although this document is based entirely on actual experience which can be verified in practice, so
that it is certainly realistic, the European Commission cannot be held liable for it.




                                                                                                    13
                                Business formats
In areas with a low population density, it is sometimes hard for commercial enterprises to achieve
viability. The European Commission considers that it is not desirable to subsidise the running of
businesses but rather that it should encourage the use of the business formats best suited to the
actual situation.

These formats include in particular extending the range of services offered to customers and
organising mobile shops and markets.




                                                                                               14
2.1.1     Local partnership in creating a multi-service shop

2.1.1.1 Context

In France the establishment or revival of a business in a rural village depends mainly on the local
community’s willpower to get things moving and devise a project.

As part of the “1000 French villages” project, the French Ministry responsible for commerce and
craft industries produced a standard feasibility pack which enables local councils to submit
applications to the Ministry for financial aid, but it is difficult to answer all the questions,
particularly the most technical ones, concerning market research and a feasibility study.

The local authority may call in private consultants, particularly for market research,           the
departmental technical agency to estimate its investments in fixed assets, and the services of   the
sub-regional council to estimate the basis on which subsidies might be available, but it is      the
organisations representing business interests (chambers of commerce and/or trade) which are      the
real technical partners.

2.1.1.2   Best practice

  Initial personal contact
The municipal authority may contact the prefectoral authority or an organisation representing
business interests in order to obtain information on the procedures and steps to be taken.

  Initial site visit
An initial site meeting is necessary to gain a better idea of the local context.

   Information meeting with the Municipal Council
A meeting is then suggested by the body representing business interests to explain the project issues
to the municipal council members:
    - definition of the objectives
    - description of the project
    - local context
    - procedures
    - financial aid which may be applied for at all levels.

The action programme is then proposed, discussed and subsequently adopted with the councillors.
The foundations are laid for the partnership.

   Survey of the local population
As part of the cooperative programme, a preliminary survey is proposed before the project goes any
farther, in order to learn more about the population’s shopping patterns, which are vital to the
success of the project.

Local residents and possibly those in neighbouring villages are sent a questionnaire.
Its purpose is two-fold:
- to inform residents of the project and the partnership which has been established with the
     representative body
- to encourage a sense of citizenship




                                                                                                  15
-   to prompt possible candidates to come forward
-   to measure the potential involvement of the local population, if only by simply evaluating the
    questionnaires returned
-   to obtain an initial estimate of the local market and competing locations
-   to define the range of goods and services for the future store according to the needs expressed.

Analysis of the questionnaires returned focuses on the following aspects:
- questionnaire return rate, indicating the residents’ interest in the proposed shop
- frequency of potential purchases and weekly amounts
- reasons for using the shop (price, proximity, friendly ambience, range, quality, freshness,
   opening hours, etc.)
- proportion of the range of products and services according to the needs expressed
- qualities which the people want to see in the future operator.

  Presentation of the survey conclusions to the municipal council
The representative organisation officially hands over the survey results at a municipal council
meeting, which may decide that this meeting should be public. It is then possible to consider going
ahead with the project.

   Feasibility study
Next, a feasibility study is conducted by the CCI [chamber of commerce and industry] (location and
presentation of the project, market estimate, draft lay-out for the shop) on the basis of the survey
results.

  Preparation of the financing plan
The financing plan is prepared jointly with the municipal authority:
- evaluation of the investment on the basis of estimates supplied by the town hall
- estimate of available subsidies
- calculation of necessary borrowings and the rent based on the amount of the repayments.

    Financial feasibility study
-    working out the viability threshold
-    comparison with the potential theoretical market and survey results.

    Setting up the investigation
-    assistance with preparing the subsidy application
-    provision of supplementary surveys
-    following up applications made to the various financial partners
-    interface with the various authorities, including the regional trade and crafts delegation.

    Selection of the future operator
-    drafting the profile of the future operator
-    taking in applications
-    preliminary selection
-    initial telephone contact with candidates
-    arranging interviews attended by town hall representatives
-    selecting the candidate.




                                                                                                   16
    Back-up for the operator to help him become established
-    The CCI notifies the future operator
-    It provides him with training
-    It researches possible sources of finance
-    It advises the operator and conducts the feasibility study for him.

    Monitoring the operator
-   Agencies representing business interests may offer to monitor the enterprise for the first three
    years on the basis of a contract

  Finance
Such agencies normally provide support free of charge for a municipal project.

Support for the shop-keeper is generally also free of charge for the person undertaking the venture.
However, funding for this 3-year support project forms part of a local programme of aid for new
businesses, concerning any type of business established or taken over in rural areas in Objective 5B
regions using ERDF finance (40%); the organisation representing business interests is also involved.

2.1.1.3 Conditions of application and transferability

This type of back-up can easily be transposed to other European countries once the representative
bodies have expressed their willingness to take action and a methodology has been agreed among
the various partners, including the State and local authorities. (The work done by Planco Consulting
with the Federal German Government is a first step towards the definition of a standard method for
the creation of a multi-service shop).

An organisation which acts as the contracting authority must take charge of the financial resources.

2.1.1.4 Contact:

Michèle Bernard (see page 10).
Jean-Luc Cauquil (see page 9).
Jean-Paul Maisonnial (see page 8).
Nelly Perraud (see page 7).




                                                                                                   17
2.1.2    “1000 French villages” project: procedure for setting up a multi-service
        shop

2.1.2.1 Context

When the last shops close, that is one of the main symptoms of the decline of villages and small
towns in France. It often goes hand in hand with the economic decline and diminishing population
seen in almost 40% of the 31 251 districts classed as rural. Half of them have a population of under
350 (for over 1000 the figure is less than 50). The majority of them lack basic facilities.

There is often a wide range of situations which local councils may encounter as regards the
commercial life of their village, such as businesses being forced to move because of road traffic,
restructuring of the centre, the exodus of traders; but in the main there are four typical situations
which arise:

-   “There have been no shops here for a long time”
-   “We have to modernise the last remaining shop”
-   “We need to expand the range of goods and services”
-   “The last remaining shop-keeper is going to retire”.

2.1.2.2 Best practice

The local council may then adopt the idea of setting up a multi-service store or converting the last
remaining shop to this form.

In France, the “1000 French villages project” aims to encourage businesses and craft activity in rural
areas.

  Objective:
To put new life into French villages with a population of less than 2 000
- by maintaining or restoring business and craft activities
- by encouraging the provision of basic public and private services at focal points
- by reviving social contact and cultural activity by the creation of a central focus.

   Activities concerned
All commercial activities other than hotels. Cafés, bars and restaurants are included if they are
complementary to a food activity. The contracting authority may be public (local council) or private
(independent agency).

    The partners

 Local councils
The local council is often the contracting authority.




                                                                                                   18
   Regional commissions for business and craft trades
The Regional Commission for Business and Craft Trades (DRCA) is the decentralised service of the
State Secretariat for small and medium-sized enterprises, commerce and craft trades.
It is an official authority responsible for organising, co-ordinating and encouraging State action on
the authority of the regional prefect in regional matters and the departmental prefects in
departmental matters. It is the operating agency which acts as the contact and develops proposals
aimed at traders and craft workers in the region, its institutions and trade associations and the
elected regional, departmental and local representatives.

In this context, the DRCA forms the link between two complementary spheres of State action in
favour of the sector which represents almost a quarter of the active population: economic
development and raising business standards. For these two spheres, measures are implemented in
the form of direct ministry procedures and the State/Regional Planning Contract or inter-ministerial
procedures, or on the basis of the zoned intervention of the European structural funds.

As regards economic development, the DRCA performs the role of a technical service for:

-   developing business and craft activities by categories (lines of business, wholesaling, itinerant
    trading, building, etc.)
-   taking business and craft activities into account in urban policies relating to the restructuring of
    town centres or urban districts
-   rural development of non-agricultural enterprises: projects for the restructuring of business and
    craft activities (ORAC), grants for new rural businesses (DJR), “1000 villages” project.

The DRCA is one of the main contacts for the local council.

  Organisations representing the interests of traders
The chambers of commerce and industry examine a large proportion of cases (according to an
outline method described in case study 2.1.2). Their function is to provide support and guidance for
enterprises, in particular local commercial enterprises. They have set up specific support services for
businesses, responsible for providing training, information and advice for commercial enterprises or
service providers in their area. These services are also responsible for examining any public issue
coming under the various ministries concerned with the activity of the business. In the case of a
project based on a craft activity as the primary occupation, the chamber of trade will examine the
matter jointly with the chamber of commerce and industry.

  The regional council and the general council
Local council technical assistance and support units have been set up in the regions and
departments. They are the obvious contacts when it comes to devising a project for a multi-service
shop.

   Examination of the application
The ministry responsible for commerce has produced a specific document enabling local councils to
submit detailed applications. This document is obtainable from the prefectoral authorities and
chambers of commerce or trade. A “practical guide” has been published in parallel with this
document. It sets out:

 Conditions of eligibility (type of investment financed, necessary public financial participation,
minimum level of investment)




                                                                                                     19
   Keys to success (economic viability of the project, profile of the shop-keeper, legal set-up and
existing public aid)

 Investment expenditure qualifying for subsidies
-  intangible investment (market survey, start-up aid in the form of rent rebates for the first 3 years,
   purchase of the “Multi-Service Shop” sign)
- tangible investment: the property acquired for the purpose, the construction and fitting out of the
   accommodation for the business or craft activity and, if appropriate, the facilities intended for
   the sale of drinks for consumption on the premises or for serving light meals, if the floor area is
   less than that of the principal activity, the purchase of major items of professional equipment,
   delivery vehicles.

  Expenditure not qualifying for subsidies
-  expenditure on the acquisition, maintenance and normal replacement of small items of
   equipment
- expenditure on roads or urban improvements not exclusively connected with the project,
   expenditure relating to residential accommodation for operators.

   Information on the examination of the application
This application must be accompanied by a decision by the municipal council, the latest operating
accounts of the shop being taken over (if applicable), bank details or postal particulars, a copy of the
plans and estimates, and a provisional project timetable.

    Finance

   The Intervention Fund for the Preservation of Craft Trades and Commerce (FISAC), set up
in 1992, is funded by part of the revenue from a tax paid by superstores and administered by the
national authority. It offers aid of up to 20% of the amount invested, excluding tax, subject to a
maximum of around EUR 30 000 (fixed assets) and a contribution of up to 50% for surveys and rent
rebates.

  Other finance
The regional council, the general council, the European funds, national funds and other partners
may be approached. The total amount of aid granted must not exceed 80% of the cost of the project
excluding tax.

2.1.2.3 Conditions of application and transferability

In other countries, such projects are set up by:

-   decision of the national intervention fund based on the same financing principles and/or the
    possibility of generating other financial aid to reduce the burden on local authorities;
-   establishment of a network of officers with functions equivalent to those of the DRCA;
-   creation of a partnership with the chambers of trade and industry or another network capable of
    providing project support.




                                                                                                     20
2.1.2.4 Contact:

Michèle Bernard (see page 10).
Jean-Luc Cauquil (see page 9).
Roland Gerhart (see page 7).
Jean-Maurice Lathière (see page 7).
Jean-Paul Maisonnial (see page 8).
Nelly Perraud (see page 7).




                                      21
2.1.3    Examples of multi-service stores in rural areas (France)

2.1.3.1 Context

In France, some villages with a population of under 1 000, remote from competition and relatively
isolated, no longer have a shop at all. The ageing population is supplied by weekly grocer’s rounds.
The local council wants to re-establish a basic service complemented by other services for the
population.

However, the circumstances vary from one village to another, and the business created has to be
adapted according to these differences:

   The village is not really in a tourist region and the catchment area includes neighbouring hamlets.
   The area is not really a tourist region and the catchment area comprises a scattered population
around a small village centre.
   This is a tourist region but with no focal attraction.
   This is a tourist region and the village has a focal attraction (lake, prehistoric site, castle, etc.).

2.1.3.2 Best practice

The actual situations observed in a number of countries lead to the establishment of sales outlets
with the following common characteristics:

-   a sales area of 60 to 300 m2 organised as a mini-supermarket
-   margin: 17 to 20%
-   a range of around 2 000 items
-   a large percentage of fresh products (42 to 45% of sales) including the sale of fresh bread, meat,
    cheese and frozen food
-   residents are offered a range of additional services: local newspapers, tobacco, lotteries, delivery
    service, dry cleaning and photo development agency, etc.
-   the shop is supplied by wholesalers or distribution chains with which the shop-keeper has signed
    an agreement
-   the shop-keeper is independent or a franchisee
-   the municipal authority has a share in setting up the business; in some cases it owns the
    building.

The initial investment is small and the rent is about EUR 300 a month. If the municipal authority
owns the building, it receives State aid, particularly under the “1000 villages” project. This
contracting authority arrangement makes it easier to set up a multi-service store.

According to the circumstances described above, best practice comprises the following variants:

    Turnover of around EUR 170 000
    Sales area of 100 m²
    Operator and his spouse.

    Turnover of around EUR 240 000
    Sales area of 100 m²
    Operator and his spouse




                                                                                                       22
   Acquisition of a van
   Twice-weekly sales rounds

  Turnover of around EUR 170 000
  Sales area of 50 m² for groceries and 100 m² for restaurant/bar
  Operator and his spouse
  Two complementary activities: grocer and bar/restaurant
  Village centre and parking nearby

  Turnover of around EUR 450 000
  Sales area of 300 m²
  One operator and one paid employee + two employees in the summer season
  Premises belonging to the local council, converted and rented to the operator

2.1.3.3 Conditions of application and transferability

The establishment of such a project in other European countries entails:
- genuine involvement of the municipal authority (or groups of authorities) in establishing a
   multi-service store
- the decision of the government authorities on the creation of the national intervention fund on
   the same financing principles and/or the possibility of generating other funding
- the possibility of generating other funding to reduce the burden on the local authorities
- the establishment of a network of officers with functions equivalent to those of the DRCA
- creation of a partnership with the chambers of trade and industry or another network capable of
   providing project support
- the shop-keeper’s ability to adapt continuously to what his customers want.

2.1.3.4 Contact:

Michèle Bernard (see page 10).
Jean-Luc Cauquil (see page 9).
Jean-Maurice Lathière (see page 7).
Jean-Paul Maisonnal (see page 8).
Nelly Perraud (see page 7).




                                                                                              23
2.1.4    Examples of multi-service shops in Germany

2.1.4.1 Context

In many German villages, shop-keepers who retire without finding someone to take over from them
deprive the local population not only of provisions but also of a meeting place. This situation is
liable to discourage people from moving into the area.

Elderly people with no means of transport (they do not have a vehicle and public transport services
are non-existent or impractical) no longer have any means of obtaining their supplies locally and
have to rely on the help of neighbours.

2.1.4.2 Best practice

The Federal German government commissioned a study from PLANCO Consulting to research the
adaptation of 12 multi-service shops, i.e. their usual range of groceries was supplemented by postal
services, lottery games, dry cleaning, shoe repair and photo development services, mail order, fax
and photo-copying services.

These 12 stores with an average sales area of between 80 and 360 m2 (except for one 20 m2 shop)
were situated in 12 villages with a population ranging from 400 to 1 000 (8 in West Germany and 4
in East Germany). Of the 12 projects, 11 were viable on conclusion of the experiment, revealing the
following results:
4 models of multi-service shop are viable:
  Model A      The independent trader with a local shop
  Model B      The shop is an integral part of the retailer’s home
  Model C      The independent trader with more than one shop
  Model D      The local shop run by a consumers’ cooperative

Whatever the model, the shop has the following characteristics:
  self-service presentation, but offering social contact between the shop-keeper and consumers
  displays are attractive and structured
  fresh products are available
   product presentation is designed to encourage purchases while respecting rules on display
according to mark-ups (it must be very easy for consumers to find what they are looking for) and
with circulation organised from right to left
  the sales area is clearly laid out and dark corners are avoided
  the distance between displays is 70 cm
  promotions are organised.

Finally, the personality of the shop-keeper is very important to the success of the store.

The catchment area comprises 500 to 700 residents.

State financial aid may help to pay for part of the investment in order to reduce the initial cost of
setting up in business and the level of borrowing.




                                                                                                  24
Key figures
The study revealed some key figures as a guide for people thinking of setting up a business in a rural
area.

These figures concern model A: i.e., the independent trader with a single shop and a sales area of
120 m2 (20 to 30 m2 is necessary for storage and office accommodation). Turnover and job creation
opportunities vary according to the catchment area.

                    Pop. 300        Pop. 500                Pop. 700           Pop. 1000
Sales area          120 m²          120 m²                  120 m²             120 m²
Workers             The shop-keeper The shop-keeper,        The shop-keeper,   The shop-keeper,
                                    his spouse, or a        his spouse, or a   and 2 full-time
                                    part-time               full-time          employees (one
                                    employee                employee           possibly    being
                                                                               his spouse)
Turnover            EUR 140 000         EUR 230 000         EUR 320 000        EUR 460 000


A carefully thought-out range
The range carried by the store must be carefully tailored to the consumers and their needs. That
requires information on the catchment area.

As a rule, the basic goods sold are:
  dry groceries (flour, sugar, coffee, tea, sweets, etc.)
  frozen food and ice cream
  bread, cakes and pastries
  soft drinks and alcoholic beverages
  dairy produce, fruit and vegetables
  cleaning and non-food products.

The average margin is 17 %.

Operating practices studied:
  Goods are delivered by a wholesaler.
  The distance from competitors is about 8 km.
  The shop has to open mornings and afternoons, but not necessarily for 8 hours a day (33 hours a
week is sufficient). However, independent traders may work 50 hours if they like.
  The additional services offered fit easily into the working hours.
  The investment in initial fittings and equipment represents about EUR 35 000 and stock
EUR 20 000.




                                                                                                   25
2.1.4.3 Conditions of application and transferability

-   Conduct of a preliminary study
-   Partnership with administrative authorities.

2.1.4.4 Contact:

Dr. Enrico Cozzio (see page 9).
Dieter Kallmeyer (see page 7).
Stefanos Kotzagiorgis (see page 7).
Kathrin Rieger-Genennig (see page 8).




                                                        26
2.1.5    Diversification of a multi-service shop (Finland)

2.1.5.1 Context

A Finnish village with a population of less than 1500, with no urban structure and very scattered
housing, had a roadside grocery.

This village is in a tourist region and has a lake as a focal attraction. The catchment area includes
neighbouring hamlets. Communication routes are well-maintained.

The population is ageing and decidedly agricultural. KESKO analysed the scope for diversifying the
services.

2.1.5.2 Best practice

Kesko developed the basic grocery store:
- self-service sales area of 200 m2 offering dry groceries and drinks, bakery products and a small
   range of fresh products and basic cleaning products
- the post office is located in the shop
- national lottery tickets are available.

Outside is an area estimated at 400 m2 including a car park and offering:
- fuel
- sale and repair of vehicles and farm machinery
- sale and hire of snow vehicles
- sale of spare parts
- sale of fishing and hunting equipment
- recycling containers for refuse.

The building is arranged to facilitate the loading and unloading of equipment and stocks (delivery
dock). Stock management is computerised.

The operator works with his family (wife and son) and employs 2 other people, making a total of 5.
He has given up doing van rounds, because they had ceased to be really profitable, in view of the
cost of replacing the van, but he still arranges deliveries.

He adapts his range of goods to local needs, but also to the requirements of tourists. He offers a full
range of goods for tourists, enabling him to develop and diversify his business.

His turnover is currently EUR 1 450 000, with services accounting for 64%. Groceries therefore
represent only 36% of the business activity.




                                                                                                    27
2.1.5.3 Conditions of application and transferability

-   Partnership with a chain permitting the expansion of activity
-   Stock organisation and management
-   Go-ahead manager
-   Constant adaptation to the needs of consumers
-   Initiative and good cooperation between chain and franchisee.

2.1.5.4 Contact:

Jarmo Laukkanen (see page 7)




                                                                    28
2.1.6    Modernisation of a cooperative by transforming sales points into multi-
        service shops

2.1.6.1 Context

At present rural areas, especially in eastern Germany, are suffering the effects of the collapse of
agriculture, horticulture and the processing industries. Here we have the highest level of
unemployment (between 20% and 25%) in the whole of the Federal Republic of Germany (result:
very low purchasing power).

The population density is about 50 inhabitants per square kilometre. Compared with the average for
the Federal Republic ( 222 inh. per sq. km.) this density is very low.
The strictly business-oriented strategies practised by service enterprises such as the postal service,
Lotto and the football pools, railways and so on will result in their disappearance from rural regions.
In the last five years most post offices and Lotto-shops in rural areas have closed down. Government
administration and public services will be increasingly concentrated in urban areas and government
offices in small villages are therefore in the process of closing.
To solve this problem, ways have to be found of integrating the services customers need into the
shops.
In recent years, a lot of small shops in villages with fewer than 1 500 inhabitants have closed.
The consumer cooperatives PUG VARIO KAUF eG run 32 small shops and the Seehausen co-op
runs 28 shops in villages with fewer than 1 500 inhabitants in this typical region, the Altmark, in
Saxony-Anhalt.
In 1996 ZAROF, an independent institute, developed the concept of multi-service shops for these
two co-ops.

2.1.6.2 Best practice

By developing shops into multi-service shops, the aim is to offer customers not only a sufficient, but
also an attractive, supply of complex services at acceptable prices near the places of residence.

The main features of such shops/markets are:
• sales areas of less than 400 sq. m.
• co-op-owned shop/franchise
• food, service and some non-food-articles
• catchment area of 500-1 500 inhabitants.

• good purchasing conditions between wholesaler and retailer
      * organise centralised purchasing for a lot of small shops
      * optimise purchasing prices and reduce transport costs

• a wide range of goods
      * min. 1 600 food products (a "full range")
      * fresh products such as bakery products, meat products, fresh-fruits and dairy products
      * products from regional agricultural and horticultural producers
      * good quality at a good price (no more than 10%-15% higher than in a supermarket)




                                                                                                    29
       * small packages for single people
       * some convenience goods.
       * a lot of non-food articles such as household articles, textiles, newspapers and magazines

• include some regional and local agricultural and horticultural products

• a lot of services - development of multi-service shops
       * postal service, Lotto and football pools, etc.
       * basic banking services
       * home-delivery, especially for sick or elderly customers
       * integration of public services in cooperation with the regional authorities
       * development of the shops into a rural communication centre
       * support of regional tourism (information service, maps, bike-maps, etc.)

• marketing
     * the same logo for all shops in rural areas
     * same advertising activities, weekly, monthly, etc.
     * same sales prices in all small shops
     * the same choice of articles on the basis of the wholesaler's order-list

• interaction between the co-op and the members/customers
       * permanently analyse customers' needs (supplied by an independent institute)
       * organise "round table talks" with managers of the co-ops and customers
       (with an independent moderator)
       * organise meetings with all members yearly

• advantages for customers
      * customers may be members/owners of the co-op by acquiring shares (minimum one share
      50 DM (25 ), maximum ten shares )
      * members/customers have a yield of 8% (of total turnover) of the co-op
      * they receive vouchers and presents, e.g. for birthday

• interaction between the co-op and representatives of the regional authorities
       * involve the activities of the co-op in regional development programmes
       * organise common activities; markets, regional events and festivities
       (this aspect includes the question of lobbying in the region)
       * involve the renovation of co-op-owned shop buildings in the "village renovation
         programme" (source of finance)

• personnel aspects
      *professional training in merchandising, products, management and new technologies
      * develop multi-service thinking, change from specialists to generalists
      * labour flexibility, flexible working hours.




                                                                                                     30
2.1.6.3 Conditions of application and transferability

• regional conditions:
      * a minimum of 500 inhabitants/catchment area
      * distance to next shop/supermarket at least 5 km
      * a central position in the village

• shop area
      * sales area min. 100 sq. m.
      * stocking area not more than 20 sq. m.
      * modern shop equipment and a service and information point

• some economic reference figures
     * turnover about 25 000 monthly
     * personnel costs/turnover no more than 10% (3%-5% is typical for a discounter)
     * about 150 customers a day

• turnover per customer's purchase about 8.

2.1.6.4 Contact :

Dieter Kallmeyer (see page 7).
Christa Nuding (see page 7).
Kathrin Rieger-Genennig (see page 8).




                                                                                       31
2.1.7     Market survey in situ: transferable multi-service shop

2.1.7.1 Context

In a tourist village with a population of 300, with no food shop, relatively close to potential
competitors: 5 km and 15 km from the nearest supermarkets, the local authority planned to set up a
grocery store.

The ageing population is served by several grocers doing van rounds, but only on a weekly basis.

The local council wants to restore a basic source of food supplies for residents but has insufficient
funds and wishes to test the creation of the project.

2.1.7.2 Best practice

The local authority wants to have a “transferable shop” installed.

  Objective
To test the viability of establishing a rural multiple shop in a small village.

   Operation
The premises offered to local authorities by the Agen Chamber of Commerce and Industry comprise
a fully equipped building in 3 demountable modules with a total area of 92 m2 (65 m2 of indoor
sales area, 13 m2 canopy and 14 m2 storage).

The CCI concludes a precarious tenure agreement with the operator for a minimum of 2 years. The
monthly rent is EUR 240. An intermediate association which owns the CCI’s facilities and
buildings takes charge of maintaining the premises.

The cost of transferring the shop from one location to another is estimated at EUR 6 000. The firm
which built the shop comes to take it down, transport it and reassemble it. This operation involves 3
to 4 days’ work and the use of two articulated lorries. The local authority where the shop is set up
bears 50% of the cost of this operation, the balance being subsidised. The CCI has to apply for a
building licence for each location.

The municipal authority provides the site for setting up the shop and the operator has to supply the
stock.

After 2 years, the decision on whether to set up a permanent shop is made on the basis of the
estimated turnover, and the shop is transferred to another district.

    Partnership
-    the premises were constructed by a carpentry firm
-    the CCI owns the premises
-    a specialist private firm organised the establishment of the shop.




                                                                                                   32
  Finance
  The total cost of the investment comes to EUR 50 000: EUR 37 000 for the premises and
EUR 13 000 for the fixtures and fittings.
This was paid for as follows:

-   State and local authorities: 60%
-   Chamber of Commerce and Industry: 40%
-   The local council provided the site.

2.1.7.3 Conditions of application and transferability

-   Local council is keen to test the viability of a shop
-   Find an agency which will own the premises
-   Organise a partnership
-   Find public finance to facilitate low rent and project launch
-   Select and monitor the manager
-   Deal with all legal aspects
-   Organise a steering committee made up of all the partners to supervise the progress of the
    business.

2.1.7.4 Contact:

Michèle Bernard (see page 10).
Jean-Luc Cauquil (see page 9).
Nelly Perraud (see page 7).

Guy Morilhat, Chambre de commerce et d’industrie du Lot et Garonne, 52, Cours Gambetta BP 279
47007B AGEN Cedex – Tel. 33 5 53 77 10 31 – Fax – 33 5 53 77 10 76 ; cci@lot-et-
garonne.cci.fr




                                                                                            33
2.1.8    National label for multi-service shops: “Villages de France”

2.1.8.1 Context

Over the past twenty years, almost 3000 villages in France have received State financial aid for
setting up a multi-service shop.

However, these shops did not form a network, and so they could not be listed in a directory with the
aim of highlighting the importance and quality of the service which they provided.

2.1.8.2 Best practice

        a) Objective

To promote multi-service shops in rural areas by developing the range of services provided for the
population and the quality of presentation and service.

        b) Method

On the initiative of the ministry responsible for commerce and craft trades, a national association
entitled “Villages de France Commerces Multi-Services” [Villages of France Multi-Service Shops]
was set up in 1995 to promote the (State-owned) label and village shops. This association contacts
local councils, shop-keepers, chambers of trade and industry and the partner enterprises.

This label serves to identify a common concept, to construct and promote a national network, and to
contribute to a policy of planning and rural development in partnership.

        c) Partnership

A partnership was arranged with the chambers of commerce and industry, mainly in connection with
the monitoring and training of shop-keepers.

A number of agreements initiated by the State were concluded with:
- Butagaz (butane and propane gas)
- Total (petrol)
- Europe Epargne
- Confederation of tobacconists
- France Télécom
- Futura France Singer
- Crédit Agricole
- Crédit Local de France
- Crédit-Mutuel
- The Post Office
- NMPP (press)
- 3 Suisses (mail order)




                                                                                                 34
       d) Membership conditions

A shop-keeper may join the association by paying his subscription of EUR 25 per annum. For a
local authority the subscription is EUR 75.

The association provides sign boards (2 signs for the entrance to the village and 1 shop sign) for a
sum of EUR 150.

The main objective of this is to inform the consumer that there is a shop in the village.

2.1.8.3 Conditions of application and transferability

-   Establishment of a national association supported by the State
-   Networking of shops
-   Creation of a logo or adoption of the existing logo and addition of “Europe”
-   Adoption or creation of a quality charter
-   Negotiation with public or private partners offering all kinds of goods and services.

2.1.8.4 Contact:

Jean-Maurice Lathière (see page 7).
Nelly Perraud (see page 7).

Ms Nathalie Havet – Villages de France-Commerces Multi-Services – 25, rue de la République –
24510 SAINTE ALVERE – Tel. 33 5 53 22 60 30 – Fax 33 5 53 22 60 37 – commerces.multi-
services@wanadoo.fr




                                                                                                 35
2.1.9    Regional network of multi-service shops = MSO network (multi-service
        outlets)

2.1.9.1 Context

Experiment conducted in Auvergne (France) by the Conseil Interconsulaire Auvergne (Regional
Chamber of Commerce and Industry, Regional Chamber of Trade and Regional Chamber of
Agriculture): establishment of a network of multi-service outlets to back up existing rural
shops (70 in 1998).
The “Multi-Service Outlets” (MSO) system is based on detection upstream of existing shops in
villages with a population of less than 2 000 (shop selling mainly food and/or café-restaurant) and
operates consistently with the “Villages de France - Commerces Multi-Services” Association, a
platform for exchanging experiences at national level (see preceding case study).

2.1.9.2 Best practice

This concept takes the form of membership of a regional network with the following features:

   • common identity with installation of furnished premises, a fax machine, telecommunications
     terminal, photocopying machine and card reader at each location, plus the provision of a range
     of complementary services to provide the rural population with local facilities (cash point,
     instant lottery point, multi-media area, etc.)

   • an agreement between the town council, the operator and the Interconsulaire Auvergne setting
     out the respective obligations of each party relating to the proper running of the “MSO”.

   • identification of the regional network and continuous exchange between business owners,
     providing communication and information tools (posters, leaflets, liaison bulletin).

   • regional co-ordination and network monitoring conducted by the officer from the Conseil
     Interconsular Auvergne in close collaboration with the local chambers of trade, industry and
     agriculture

   • a structured partnership with public and private bodies: France Telecom, La Française des
     Jeux, Les 3 Suisses, Crédit Agricole, SNCF, social security organisations and Singer Futura
     France

   • arrangement of discussion meetings and training sessions.

This network organisation forms the basis for an exchange of information among the 70 MSOs,
enabling them to take collective advantage of successful experiments. The network encourages
these small establishments to “think big”, to break out of the isolation of the operators and residents
of the villages concerned, to take part in a local development and planning drive and in a strategy of
new ideas and a project which encourages activity.

Membership of the network does not only promote the clear identification of this new form of
business, a sharing of communication resources and an exchange of know-how which optimises
everyone’s potential, it also enables shop-keepers to adapt and modernise.




                                                                                                    36
Access by the MSO network to the New Information and Communication Techniques
[NICTs]represents entry into a new dynamic development process for these shops. It helps to put
local customers and tourists on an equal footing, as they can benefit from widespread access to the
NICTs, whatever their geographical location. This project’s original feature is that it uses multi-
media as a means of stimulating and strengthening social links in rural areas.

Cost of a regional network of at least 70 MSOs:

  • Investment in establishing a new location: around EUR 5 000, comprising computer
    equipment, furnished premises and all equipment financed 50% by the shop-keeper and 50%
    by the General Council (public authority).

  • Communication and regional promotion: about EUR 100 000 financed by the Conseil
    Interconsulaire Auvergne, European funds (ERDF) and State funds.

2.1.9.3 Conditions of application and transferability

• Encourage regional co-ordination of the MSO system
• Revitalise shops by expanding the range of local services
• Maintain territorial links between MSOs: exchange of information and experiences
• Facilitate the organisation of group schemes generating economies of scale
• Enable MSO operators to benefit from the progress represented by innovation (development of
  NICTs) and communication (pooling resources in terms of reconnaissance and promotion of the
  concept)
• Promote specific training for MSO operators.

2.1.9.4 Contact:

Michèle Bernard (see page 10).




                                                                                                 37
2.1.10 Modernisation of mobile shops

2.1.10.1 Context

Shops with permanent premises can operate van rounds to complement their business and thus
increase its profitability.

However, some itinerant traders do not have a permanent sales outlet.

2.1.10.2 Best practice

Financial aid may be applied for, notably in France, to finance the acquisition of a vehicle fitted out
for doing rounds.

Subject to certain conditions, the Intervention Fund for the Preservation of Craft Trades and
Commerce (FISAC) provides assistance with the acquisition or replacement of this type of
equipment. The subsidy may be up to 20% of the amount of the investment in question, excluding
tax.

This aid may be supplemented by other funding provided both by the State and by local or regional
authorities.

2.1.10.3 Conditions of application and transferability

Establishment of a similar system under an economic plan.

2.1.10.4 Contact:

Roland Gerhart (see page 7).
Jean-Maurice Lathière (see page 7).
Jean-Paul Maisonnial (see page 8).

André Esselink, Secretary General
Rolf Koops, Secretariat
Union Européenne du Commerce Ambulant (UECA)
P.O. Box 90703
NL – 2509 LS Den Haag
Tel.: 31-70-3385605
E-mail: r.koops@hbd.nl

Charline Brassens
Secrétaire Générale
Fédération Nationale des Syndicats
des Commerçants Non Sédentaires (FNSCNS)
14, Rue de Bretagne
F – 75003 Paris
Tel.: 33-148874380




                                                                                                     38
2.1.11 Making markets comply with standards

2.1.11.1 Context

Traders gather at markets usually run by the municipal authorities which lay down the rules.

These municipal authorities are responsible for the accommodation provided for stall-holders. This
may take the form of a covered (indoor) market or an open-air market.

Modernising the markets helps to revive a town centre and revitalise the area. This modernisation is
necessary because of the entry into force of European standards of hygiene and safety.

The imposition of standards entails relatively high expenditure as regards the provision of water and
electricity for traders selling foodstuffs.

2.1.11.2 Best practice

       a) Objective

   In France an agreement was signed in 1994 between a trade association, the national federation
of stall-holders, and an organisation of elected representatives, the French town councils
association, under the aegis of the State.

The aim of this agreement is to establish a partnership between the municipal authorities and the
associations of stall-holders in order to ensure the preservation of markets, which are an essential
feature of the national economic and cultural heritage.

   The Ministry responsible for commerce and craft trades has also drawn the attention of town
councils to the need to bring their markets up to standard and has encouraged them to modernise the
accommodation for stall-holders while urging them to exercise some restraint as regards increasing
market fees.

To encourage town councils to consider this type of investment, the Ministry finances part of the
expenditure out of the Intervention Fund for the Preservation of Craft Trades and Commerce
(FISAC).

       b) Conditions of eligibility

-   The project must aim to strengthen the commercial activity concerned - both itinerant and fixed
    by the facilities to be upgraded.
-   Investment support is the priority.




                                                                                                  39
       c) Subject of the aid

In the case of indoor markets in particular, the priority concern of State aid is with facilities directly
concerned with trading activity, such as the creation of units, facilities for internal movement,
electrical and refrigeration equipment, running water and toilets for traders, excluding structural
work affecting the fabric of the building.

       d) Amount of the aid

The subsidy granted is a maximum of 20% of the expenditure eligible for assessing the subsidy and
totalling around EUR 380 000 or less and 10% above that threshold, with the proviso that the total
amount of the aid cannot exceed around EUR 230 000.

The application submitted must comprise the following information:

-   the objective, nature and description of the proposed project, and the reasons for it
-   market administration arrangements and procedures
-   detailed cost of the work: in the case of indoor markets, in particular, it must show expenditure
    relating to the fabric of the building and that relating to facilities directly connected with the
    trading activity
-   financial plan, with repayment schedule if appropriate, showing in particular the proportion of
    self-financing and the amount of the subsidy requested.

       e) Other finance

Other possible sources of finance are:
- the department
- the region
- the municipal authority
- Europe

       f) Technical partners

-   Chambers of commerce and industry,
-   Chambers of trade
-   Technical development agencies
-   Architects

2.1.11.3 Conditions of application and transferability

-   Set up a similar aid scheme
-   Set up a partnership.




                                                                                                       40
2.1.11.4 Contact:

Roland Gerhart (voir page 7).
Jean-Maurice Lathière (voir page 7).
Nelly Perraud (see page 7).

André Esselink, Secrétaire Général
Rolf Koops, Secrétariat
Union Européenne du Commerce Ambulant (UECA)
P.O. Box 90703
NL – 2509 LS Den Haag
Tél.: 31-70-3385605
E-mail: r.koops@hbd.nl

Charline Brassens
Secrétaire Générale
Fédération Nationale des Syndicats
des Commerçants Non Sédentaires (FNSCNS)
14, Rue de Bretagne
F – 75003 Paris
Tél.: 33-148874380




                                               41
2.1.12 Market regulations

2.1.12.1 Context

In France there are 6 000 towns and villages nationwide which have at least one market a week.
There are 80 000 itinerant traders with a single activity, 25 000 with two activities, 25 000 itinerant
farm workers and 135 000 registered traders with the same number of spouses and children,
employing 70 000 workers, or over 500 000 people making a living out of itinerant trade.

Food accounts for 71% of the commercial activities (fruit and vegetables, meat and fish). Most of
the rest concerns personal requisites, flowers and knick-knacks.

Markets - even if they are small - are set up on public sites owned by the local authority and run by
the municipal council.

Regulations need to be introduced, but they must of course be capable of being adapted to each
particular situation, and therefore be discussed and amended by the municipal council in the
presence of the representative of the itinerant traders' association.

2.1.12.2 Best practice

       a) Objective

Each market must have regulations drawn up and passed by the municipal council following
consultation with the trade associations concerned. These regulations must be respected in that area
both by residents and by persons from outside, and by the mayor and municipal councillors (and the
clerk in charge of letting the pitches).

       b) Method

  A text structured and discussed by the municipal council: this text will become a municipal order
mentioning the following points:

-   The objective
-   Market day or days
-   Squares and streets where regular and special markets are held
-   Details of each person’s responsibilities
-   Method of allocating pitches
-   Pitch application procedure
-   Traders’ insurance obligations
-   Non-assignment of pitches
-   Special rules on pitches and the assignment of pitches
-   Conditions for changing pitches in the event of force majeure
-   Conditions for the last-minute allocation of pitches
-   Ban on engaging in any activity other than the one specified
-   Advertising of vacant pitches and allocation in order of seniority
-   Definition of the role of the market clerk in charge of letting pitches
-   Ban on vehicle traffic
-   General arrangements for market access




                                                                                                      42
-   Supervision
-   Regulations in relation to permanent traders
-   Sales regulations (ban on auction sales)
-   Parking ban
-   Safety and hygiene measures
-   Miscellaneous rules and penalties.

2.1.12.3 Conditions of application and transferability

-   Local laws and/or regulations.

2.1.12.4 Contact:

Nelly Perraud (see page 7).

André Esselink, Secrétaire Général
Rolf Koops, Secrétariat
Union Européenne du Commerce Ambulant (UECA)
P.O. Box 90703
NL – 2509 LS Den Haag
Tél.: 31-70-3385605
E-mail: r.koops@hbd.nl




                                                         43
2.1.13 Market manager

2.1.13.1 Context

Markets are an important means of encouraging and promoting economic activity and are essential
to the revitalisation of towns and the countryside.
These markets should be properly organised.

2.1.13.2 Best practice

In the Netherlands, a special unit has been established at the Retail Trade Office (an agency
comprising representatives of the Ministry, employers and employees). As a rule, the local authority
is responsible for managing the markets. Towns which have a major market employ a market
manager who works closely with the special unit at the Retail Trade Office and takes part in
publicity programmes.

The market manager collaborates with business people and government representatives for the
purpose of setting up publicity programmes and implementing schemes to improve the operation of
markets.

The market manager is responsible for:

-   enforcing the market regulations
-   allocating places
-   registering those present
-   organising tenders and avoiding rivalry problems
-   supervising traffic and acting as intermediary between traders and the municipal authority
-   ensuring that the market is kept clean and tidy by enforcing the sorting of refuse.

2.1.13.3 Conditions of application and transferability

-   develop some existing posts (market clerks) by extending their duties
-   create equivalent posts on the responsibility of the municipal authorities or associations of
    municipalities
-   establish a partnership with an agency equivalent to the Retail Trade Office.




                                                                                                 44
2.1.13.4 Contact:

André Esselink, Secrétaire Général
Rolf Koops, Secrétariat
Union Européenne du Commerce Ambulant (UECA)
P.O. Box 90703
NL – 2509 LS Den Haag
Tél.: 31-70-3385605
E-mail: r.koops@hbd.nl

Charline Brassens
Secrétaire Générale
Fédération Nationale des Syndicats
des Commerçants Non Sédentaires (FNSCNS)
14, Rue de Bretagne
F – 75003 Paris
Tél.: 33-148874380




                                               45
2.1.14 Signs advertising markets

2.1.14.1 Context

Markets are often not turned to proper account, and sometimes are not even advertised. Town
councils are often helpless to deal with unauthorised trading which is contrary to existing
legislation.

2.1.14.2 Best practice

    A concept

The French national association of itinerant traders has produced a special “Marché de France”
[French market] sign stating the name of the town and the dates when markets are held.

    A booklet for councillors

A booklet has been produced jointly with the chambers of commerce and industry. It concerns
itinerant traders and is sent to town councils and any interested persons. This booklet entitled
“Knowing more about markets” presents some national and departmental statistics, the rules on the
management of public places and the role of the market clerk, a standard set of market regulations,
the text of the agreement on itinerant trading, specimen applications for pitches and documentation
concerning itinerant traders, and finally some useful addresses.

    A booklet on “fairs and markets”

The chambers of commerce and industry conduct censuses and publish manuals on “fairs and
markets” in their area, indicating where and when markets are held, the number of traders and
special fairs and markets. As a rule, these booklets are sent to new itinerant traders.

    Specific studies

Municipal authorities wishing to establish or revive their market often request the chambers of
commerce and industry to conduct a survey among traders and consumers to provide confirmation
for their project. Each study is prepared jointly with the municipal team and the traders’
representatives.

    Dissemination of information

Chambers of commerce, trade and industry are often chosen as the natural route for passing on
information about commerce and itinerant trading.

Departmental prefectures also have a certain amount of information and organise a consultation
meeting at least once a year, attended by councillors, business people and government
representatives.

2.1.14.3 Conditions of application and transferability

-   Adaptation to local regulations.




                                                                                                46
2.1.14.4 Contact:

Jean-Maurice Lathière (see page 7).
Jean-Paul Maisonnial (see page 8).
Nelly Perraud (see page 7).

André Esselink, Secrétaire Général
Rolf Koops, Secrétariat
Union Européenne du Commerce Ambulant (UECA)
P.O. Box 90703
NL – 2509 LS Den Haag
Tél.: 31-70-3385605
E-mail: r.koops@hbd.nl

Charline Brassens
Secrétaire Générale
Fédération Nationale des Syndicats
des Commerçants Non Sédentaires (FNSCNS)
14, Rue de Bretagne
F – 75003 Paris
Tél.: 33-148874380




                                               47
2.1.15 Commercial restructuring of a town centre in a rural area

2.1.15.1 Context

In a small historic, tourist town with a population of 10 000 (which expands to 60 000 in the
summer season) a large market is held every Saturday.

However, the town centre which has 200 traders is suffering from the large-scale development of
superstores on the edge of town, which is tempting away customers from all directions and having a
serious impact on traditional trade.

It was necessary to revitalise the town centre as a whole.

2.1.15.2 Best practice

The solution entails producing an overall programme in constant liaison with the traders, both
permanent and itinerant.

The market comprises over a hundred traders with stalls radiating out from the town hall square,
creating very lively activity taking over all the local streets.

Regional produce is well represented, and the shops benefit from this attraction which pulls in over
5 000 visitors on Saturday mornings.

The programme is supplemented by an ambitious project: the creation of an indoor market by
renovating an old, disused church.

The idea is to link culture and the market in this building. Stalls in the central nave are intended for
traditional market trading and selling regional produce, and are equipped to European standards.

These are good quality stalls, with a high standard of finish. A system of wheels makes them
movable and very easy to arrange, so on the occasion of tourist events such as the theatre festival,
one or more aisles can be created by arranging the stalls in groups.

Art and craft exhibitions will be organised at the second level in the church.

Recessed lighting and the sign equipment necessary for the market will be incorporated, together
with infra-red heating.

Finally, a lift provides access to the bell tower for a panoramic view.

This conversion forms part of a town centre and urban development revitalisation programme
involving other capital expenditure, such as the provision of car parks, renovation of the town gates
and main roads and the installation of new road signs, household refuse containers, and street
furniture (at a total cost of EUR 60 000).

The new indoor market located at the heart of the open-air market is a real asset for both permanent
and itinerant traders, especially during the tourist season.




                                                                                                     48
This project led to the preparation of a subsidy application which secured State finance covering
20% of the cost. Regional, departmental and European subsidies were also provided.

Finance
This project, carried out with State support via a “Coeur de Pays” [Heart of the Country] project
represents investment expenditure in excess of EUR 1 million (EUR 100 000 on research,
EUR 900 000 on renovation and EUR 70 000 on equipment). The State, the region, the department
and Europe paid for almost 80% of the project, while the chambers of commerce, industry and trade
took charge of the logistics.

2.1.15.3 Conditions of application and transferability

-   the location concerned must be in a tourist area
-   the building for the creation of the indoor market must be central and close to the open-air
    market
-   the partnership including local authorities, chambers of commerce, chambers of trade and local
    producers etc. must be strong and durable
-   the links between permanent and itinerant traders must be reliable
-   the action programmes cover a 3-year period
-   the support of public funds is essential and is very effective in mobilising resources.

2.1.15.4 Contact:

Michèle Bernard (see page 10).
Jean-Luc Cauquil (see page 9).
Jean-Maurice Lathière (see page 7).
Jean-Paul Maisonnial (see page 8).
Nelly Perraud (see page 7).

André Esselink, Secrétaire Général
Rolf Koops, Secrétariat
Union Européenne du Commerce Ambulant (UECA)
P.O. Box 90703
NL – 2509 LS Den Haag
Tél.: 31-70-3385605
E-mail: r.koops@hbd.nl




                                                                                               49
                                Supplying retailers
Small businesses in rural areas are often accused of charging high prices compared with those
offered by superstores, This price difference often affects the level of custom, profitability and
hence the very existence of small businesses.

One reason for this price difference concerns the conditions of supply: negotiating deals, of course,
but also logistical supply aspects. It is in fact necessary to achieve a size effect and pool all local
capacity in order to cut costs.

Best practice often corresponds to the application of various forms of cooperation.




                                                                                                      50
2.1.16 Central location of wholesaling activities (non-grocery sector)

2.1.16.1 Context

The purchasing process for retailers in the non-grocery sector is very complex. For small activities
in particular it is very difficult to make the right assortment decision in terms of individual items
and quantities. These difficulties create big problems for small shop-owners, who cannot usually
find suppliers with a marketing solution that is more attractive for a specific market without
increasing stocks and reducing the shop's overall performance.

2.1.16.2 Best Practice

If the distributive structure is still based on small, traditional non-food retailers and wholesalers are
still strong in terms both of the number of outlets and their market share, an efficient and effective
solution can be found by stimulating a process of spatial polarisation of wholesale activities in the
same location. If small retailers are given the possibility of composing their own assortment,
selecting items from a wide variety of “ready-to-deliver” goods and comparing prices in the same
location, this is an important way of supporting small retailing activities in less-favoured areas,
reducing the amount of research and providing “best” marketing proposals and price
competitiveness. Wholesalers operating in the centre are constantly "obliged" to review pricing
policies, because of the pressure of the market. Every retailer that goes to the centre to buy can, in
fact, easily compare the different proposals and prices on that market, thus creating competition
among potential suppliers and deciding to buy where conditions (prices and terms of payment) are
more suitable. Finally, retailers can use facilities like free parking, the post office, restaurants and
bars, banks, security, etc. In addition, management in wholesaling activities in contexts such as that
described above can benefit from substantial economies of scale as regards the building and
management of co-ownership expenses (security, energy, cleaning, maintenance, etc.), which
provide concrete possibilities for improving competitiveness in terms of price policy, thus
increasing the benefit for retailers.
In this respect, it is very interesting to look at the experience of CIS, a network of wholesalers
located in the same district, near Naples in southern Italy. In this district, 320 independent
wholesalers operate in almost 70 different specialised non-food sectors (in almost 500 000 square
meters of covered surface and with total sales of about 4 billion). It is a kind of association and
was promoted by a group of wholesalers originally located in Naples. There were many problems
for this kind of intensive activity in Naples itself (space availability, traffic congestion, accessibility
of wholesalers’ shops, etc.). The idea of creating a new wholesale centre outside the city of Naples
was the wholesalers' union's answer to a process of environmental change. It is important to
underline that in this initiative one man (Cav. Lav. Gianni Punzo), the owner of a wholesale firm in
the textile sector, played a very important role. He was the first promoter of the idea and became
the Chairman of the association when the project first got under way (1976). Using his strong
personality and “charisma”, he convinced first a group of leading wholesalers that there was no
more business either for them or for wholesalers in general if they continued to operate in the city
centre and did not experiment with new management techniques. He convinced them and many
other wholesalers in the next few years (the first part of CIS was built and opened in 1986 by a
union of almost 200 independent wholesalers), that there was no future without an association and
that the best and most concrete thing to do was to join the project. Obviously it was impossible to
create the CIS without a certain number of associates, but it was also clear (and everyone agrees
with this) that without Gianni Punzo’s leadership it would have been impossible to carry out the




                                                                                                        51
project given the situation in Naples. The wholesalers' mentality was substantially unfavourable to
business initiatives promoted by any kind of association and the local public authorities initially
considered the project too ambitious and unfeasible in practice. Building began in the early eighties
(partially funded by central government). In January 1986, CIS was handed over to the wholesalers
and during the year almost 200 independent firms began to operate. It was immediately a great
success. No space was available in the centre for other wholesalers. For this reason the CIS Council
decided to build new space (almost 200 000 square meters of covered surface). In the early nineties
the “CIS enlargement” building operation was started and completed, so that new space could be
assigned to another 120 independent firms that became associates and immediately began to
operate.

2.1.16.3 Conditions of application and transferability

This particular model of networking could be transferable even if it requires some specific technical
skills and experience (managerial, financial, legal, etc.), which are important if the teething
problems of CIS are to be avoided. The main problem, however, is to find a leader with the capacity
to bring together, “around the same table”, independent entrepreneurs who do not usually have the
right mentality to concretely and actively participate in cooperative initiatives. The most important
thing to do in order to develop this model in European countries is to raise the awareness of
wholesaler entrepreneurs and the public authorities to this type of economic activity. Wholesalers,
especially those of the non-grocery sector, have to convince themselves that operating in the same
location can improve their own performance and those of their customers. In this process it could be
useful to promote meetings with wholesalers that operate in contexts such as that described above.
The other important thing to do is to encourage the respective governments to examine in depth this
kind of business development in the distributive trades, in order to evaluate the opportunities to
finance it. It could also be very useful to show the competent authorities actual situations where this
model is working successfully, giving both wholesalers and retailers the possibility to survive,
especially in less-favoured rural areas where the services offered by small outlets are very important
for consumers.

2.1.16.4 Contact :

Roberto Vona (see page 8).




                                                                                                    52
2.1.17 Reduction of delivery costs by coordinated merchandise delivery

2.1.17.1 Context

Sweden is one of Europe's largest countries in terms of area. Russia is clearly the largest, with
Sweden coming in fourth place, just behind France and Spain. If we imagined tipping Sweden down
over Europe, allowing the southern tip to remain stationary, the northern end of Sweden would land
in Venice, Italy.
The geographic distance of the country - north to south - is great, but the country is sparsely
populated. There are 19 inhabitants per square kilometre. The long distances and the large expanse
of land constituting the region of Norrland, with its few inhabitants, create notable problems in the
distribution of goods. Periodic harsh weather conditions add to the problem. Meter-deep snow is
common during the winter months in this region.
The costs for transportation of goods for wholesale traders are considerable. Many suppliers have
begun charging for delivery to the stores they supply. Some have begun imposing minimum orders
for the amount of goods to be delivered, otherwise refusing to deliver goods at all. Such suppliers
include the major bakeries, dairies, meat products suppliers, among others. This is a large problem
for rural shops, and forces them to raise consumer prices for these products. Consumers, in turn,
read supermarket advertisements in newspapers and compare the prices of the stores in cities with
their own local shop. This unfavourable comparison often make local customers travel to larger
towns or cities to do their shopping, even at the expense of time and transport costs.

2.1.17.2 Best practice

Positive experiences of co-ordinated deliveries to the rural areas in Sweden.

During the past two years in the region of Västerbotten, suppliers and wholesalers have cooperated
in the delivery of goods to outlying areas. This began as a project initiated by the Swedish
Consumer Agency. The goal of the project was to devise a system which would reduce
transportation costs and avoid charges for delivery to stores in outlying areas.

The project started by hiring a consultant with experience in national distribution. Together with the
suppliers and wholesalers who distributed their goods, a committee was formed to direct the project.
A study was made of the needs of shops and suppliers for delivery and distribution, frequency of
delivery, the amount of goods per delivery and methods of transport. The study also included school
cafeterias, care facilities and kiosks in order to maximise efficiency and hold down costs for
delivery to outlying districts. A plan was made for delivering three times a week to each shop. In
some cases the shops were forced to accept fewer dairy deliveries than they had previously.

For deliveries to the mountain villages in western Västerbotten, goods are transported a distance of
250 kilometres from the city of Umeå in the east up to the city of Lycksele. No stops are made on
this route. In Lycksele the transport vehicle is also loaded with fresh bread from bakeries in the city
of Östersund and the transport continues up to the major towns in the rural districts of Doroteas,
Vilhelmina and Storuman where local distributors take over the delivery. From Umeå delivery of
goods is coordinated.




                                                                                                    53
For practical reasons the dairy products distributor (Nordmejerier) has the role of coordinator
because of the frequency of deliveries of its products. An expansion of Nordmejeriers facilities in
Lycksele has made it possible to store refrigerated goods more effectively.

The Swedish Consumer Agency is no longer involved in the 1997 / 98 project. An official report
relating experiences and data was compiled.

2.1.17.3 Conditions of application and transferability

Some experiences from the project are:
Distribution costs for the products involved in the project were reduced by half.

Overall delivery and frequency of delivery to outlying stores was improved, with the exception of
reduced deliveries of dairy products to some stores.

Products from smaller wholesalers can also be transported to outlying stores together with larger
deliveries in a coordinated distribution system.

Stores in even the most outlying areas can now be assured of reliable delivery.

To achieve success in coordinated distribution it is necessary for all involved parties to benefit
economically.

The model for this system can be adapted to other geographic areas.

During 1998 the project in Västerbotten has been implemented on a regular basis. Norrmejerier is
the coordinator and administrator. A new project for coordinated distribution with EU area 6
funding is to be started in the region of Jämtland. Two other regions are preparing to study the
possibilities of similar projects.

2.1.17.4 Contact :

Dr. Enrico Cozzio (see page 9).
Leif Larsson (see page 10).




                                                                                                54
2.1.18 Centralised purchasing for cooperatives

2.1.18.1 Context

In rural areas it is difficult for retailers and co-ops to find a wholesaler able to supply small shops.
Long distances and small delivery orders increase transport costs and wholesale prices. The results
are low margins for retailers and wholesalers and high sales prices. In fact, some wholesalers are not
interested in supplying small retailers and small shops run by co-ops.

2.1.18.2 Best practice

In recent years, the federation of five different independent co-ops (PUG VARIO KAUF eG., Co-op
Seehausen/Altmark, Co-op Burg-Genthin, Co-op Haldensleben and Co-op Magdeburg)1, in close
cooperation with the co-ops and the wholesaler EDEKA, drew up a plan for centralised purchasing
for all the various co-ops.

The co-op federation organises a centralised purchase, supported by a modern information and
communication system, with the wholesaler EDEKA. The independent shops/co-op shops order the
goods directly on the basis of the actual order-list of EDEKA.

The actual tasks of the federation are:
• compiling the purchase volume of all the shops of the 5 independent co-ops
• negotiating with 50 different suppliers and 6 federation-owned factories (bakers, butchers)
• compiling the actual order-lists (a choice of 1 600 different articles) for the shops in close
  cooperation with the wholesaler
• recommending the retail trade prices for the different co-ops
• developing marketing concepts, organising action
• producing advertisements for all shops (leaflets for the shops, weekly announcements in regional
  newspapers etc.).

In 1995 a new, completely automated logistics centre for EDEKA opened in this region for
optimising the logistic conditions.

2.1.18.3 Conditions of application and transferability

The main results of this best practice are:
• the supply of the smallest shops is ensured, the transport costs could be reduced from 8% to 1%
  of the wholesale price,
• the purchase conditions are optimised by combining the purchase volume of more than 130
  shops,
• the sales prices in the small village shops are no more than 10%-15% higher than supermarkets
  (sales area more than 400 sq. m.),
• the small shops are able to offer a wide range, known as a "full range" (minimum of about 1 600
  different food articles including fresh goods) of good quality,
• the wholesaler supplies,
• small shops have fresh goods two/three times per week.

1
  The federation and five co-ops are situated in the rural area in Saxony-Anhalt. They run more than 130 small shops in villages with
fewer than 1 500 inhabitants.




                                                                                                                                   55
• the federation-owned baker and butcher supplies the shops every day
• the shops offer a good non-food range with household-articles, toys, textiles, newspapers and
  magazines, stationery and gifts.

With the help of this system the 130 shops of the 5 co-ops in the Saxony-Anhalt region could be
stabilised and competitiveness could be increased. In comparison with other regions in Germany
we could develop the closest network of small shops in rural areas.

For a successful transfer of this centralised purchasing system, the following conditions are
necessary:
• a high level of readiness and competence for a spirit of cooperation between retailers/co-ops
   (horizontal cooperation) and between retailers/co-ops and wholesalers (vertical cooperation)
   must be developed,
• all members of this system must be able to find a common compromise,
• a clear economic advantage for retailers (good wholesale prices) and wholesalers (a guaranteed
   large volume of orders) must exist
• an independent organisation (for example, a federation) with the task of organising centralised
   purchasing must exist.

2.1.18.4 Contact :

Dr. Enrico Cozzio (see page 9).
Kathrin Rieger-Genennig (see page 8).




                                                                                              56
2.1.19 Voluntary chain

2.1.19.1 Context

Small stores have lost market share and have declined in number for many reasons:
• turnover too low to offer wide choice of products, especially in fresh products
• poor quality of fresh products
• price differential between small stores and hypermarkets too big
• customers do only supplementary shopping because of the above-mentioned reasons - difficult
  to improve the business
• inadequate professional skills of the retailer/personnel
• the stores and the sales equipment in need of modernisation
• the retailers are ageing, the level of profitability does not appeal to younger entrepreneurs

2.1.19.2 Best practice

In Finland with Kesko even small retailers can improve their business by belonging to an organised
chain of retailers. This kind of cooperation is operated with the help of the wholesaler. The retailers
are organised through boards of retailers at both regional and national levels. The national board of
retailers make all major decisions concerning the chain’s operations, the wholesaler makes the
decision proposals:
• Agreement between retailers and the wholesaler describing the level of cooperation and the
   obligations of both sides. The agreement is the basis of chain operations, the balance between the
   parties must be fair. The main objective is improved profitability for both parties (see example
   §2.2.5.).
• Joint assortment planning and purchasing. Based on wholesaler’s expertise (consumer trends,
   product information, sales data etc.), the decision of the basic assortment of the chain (around
   1 000 articles, the total amount of articles in an average rural store can be up to 3 000 depending
   on location and competition) is made three times in a year. The wholesaler gathers all the
   necessary data and the board of retailers makes the final decision about the basic assortment. The
   retailers add local and their own special products to their assortment. Through joint purchasing
   small retailers can get competitive prices especially in fresh food and reduce the price differential
   to hypermarkets. In K-group small retailers started to do national cooperation in purchasing in
   1995. When estimating the benefits of joint purchasing as a whole (the price of goods, marketing
   subsidies from suppliers), the results have been very good, for example statistics show that
   marketing subsidies from suppliers have more than doubled. The basic assortment and joint
   purchasing is also a benefit to suppliers, who get better coverage and sales of their products
   through the chain.
• Joint marketing. Marketing decisions are made on a monthly basis. The main media, together
   with the store itself, is a marketing leaflet (180 000 leaflets weekly) in which national and local
   needs are considered. The objective of marketing is to show a reasonable price level in well-
   known products and give customers an alternative near them instead of hypermarkets far away.
   As in basic assortment and joint purchasing, the retailers make the decisions. They choose the
   products from the basic assortment to be advertised in the marketing leaflet and also set the retail
   prices. Along with well-known national and international brands, K-retailers can offer a wide
   range of private label products. These products are very important for small retailers, they create
   a good and steady price image and their profitability is very good. The wholesalers organise the
   production of the leaflet and other marketing material. With this model it is possible to cut




                                                                                                     57
  advertising costs substantially compared to the situation in which every retailer advertises on
  their own.
• Efficient logistics. This is most important both for the wholesaler’s and the retailers’
  profitability. Finland is very sparsely populated. The average population density is only 17 per
  square kilometre. The geographic length of the country is 1 160 kilometres, with a width of 540
  km. and total surface area of 338.145 square kilometres. A large part of the country also suffers
  harsh weather conditions during the winter. In these conditions, the logistic system has to be
  very efficient. The foodstuffs division of Kesko Ltd offer logistic services to over 1 400 stores.
  Combining deliveries results in cost savings in distribution and storage (a study on logistical
  costs as a whole showed: warehousing 15%, transportation 15%, storage 60%). Kesko’s logistics
  system consists of the central warehouse and distribution centre of the Helsinki region and four
  distribution centres (Turku, Tampere, Kuopio and Oulu). Warehouse deliveries from the central
  warehouse consist of 8 300 ambient items, 1 400 chilled items, 1 000 frozen items and 6 400
  home goods. Warehouse deliveries from the distribution centres (Turku, Tampere, Kuopio, Oulu)
  consist of 600-800 ambient items, 200-300 chilled items and 100 frozen items. Both in the
  central warehouse and in the distribution centres terminal cross-docking is made. This means
  combining the deliveries coming directly from the suppliers with the warehouse deliveries. In the
  distribution centres the truck deliveries coming from the central warehouse are also combined
  with warehouse deliveries (of the distribution centre). The transportation equipment includes 150
  temperature-controlled delivery trucks and 50 other trucks. The deliveries in 1997 in total were:
  32 million order lines, 69 million shop units, 590 000 tonnes and 1.7 million cubic metres. With
  a logistic system in which the volume of the wholesaler as a whole is combined, it is possible to
  keep the logistical costs at a reasonable level even for small retailers. To the retailer the costs
  depend on the distance to the nearest distribution centre and the volume delivered; it is possible
  to keep the costs under 1% of the retailer’s sales per year. It is obvious that small retailers benefit
  in this kind of system; if they were operating only with their own volume, the costs would be
  substantially higher and the service level (delivery frequency, minimum orders etc.) much lower.
• Consulting and training. Kesko offers consulting services in management,
  marketing/merchandising, IT, store renewal, etc. In Kesko’s regional organisation there are
  consultants who are specialised in different fields of retailing. These consultants organise
  meetings with groups of retailers (10-15 retailers in a group). In these groups, retailers can
  exchange experiences on various topics. The idea is to inform everyone about ”best practices”,
  to give ideas how to improve one’s business. These get-to-togethers are, of course, voluntary and
  free of charge to the retailers. The consultants also offer individual services based on the
  retailer’s needs. These services have to be separated from the basic business (not included in the
  price of goods) and have a reasonable fee. Kesko also has a training institute which offers a wide
  range of professional training to retailers and their personnel. The problem is that most of the
  small retailers and their personnel need advice and training but they are not willing and/or able to
  pay for it. Some kind of financial support in this field would be very useful to keep small
  retailers’ businesses more competitive. The support should be controlled and administered by
  national or local authorities.

2.1.19.3 Conditions of application and transferability

Retailers have to be willing and able to commit themselves to an organised chain. This means some
considerations on the level of sales, assortment as a whole and the ability to invest in their business.
The best way to motivate retailers is money. The profitability of the retailers in a chain is better than
that of ”outsiders’”. Some kind of financial support is, however, needed for retailers to invest in




                                                                                                      58
consulting services and training themselves and their personnel. The support should be controlled
and administered by national or local authorities.

For the wholesaler too, the business has to be profitable. Building up organised cooperation with
retailers costs money and not all the costs can be included in the price of the goods. If it were, the
price differential compared to bigger stores would be too big. If cooperation is not profitable for
both sides it creates difficulties for small retailers, the prices go up and it is difficult to get the
logistics working at a reasonable price. One way of compensating for the logistical costs is to
subsidise home deliveries (for handicapped or elderly persons who are unable to do their own
shopping). As for consultation and training, the subsidies should be administered by the authorities.

2.1.19.4 Contact :

Tapio Bjorkman (see page 8).
Dr. Enrico Cozzio (see page 9).




                                                                                                    59
2.1.20 Wholesaler/retailer partnership: Progress Charter

2.1.20.1 Context

In 1996 the Union of Chambers of Commerce and Industry of the Massif Central (UCCIMAC)
conducted a study on supplies for rural retailers, with the support of the Directorate of Domestic
Commerce (DCI) funded by FISAC and the Massif Central Planning and Economic Development
Board (DATAR Massif Central) funded by FNADT.
This preliminary study revealed that in France, and especially in the Massif Central (this region,
70% of which is mountainous, covers 17% of France and contains only 6.5% of the national
population), the problems connected with supplying local food shops in the most disadvantaged
rural areas are due to the following factors:
• declining, ageing population with low purchasing power
• low density of population: average of 47 per km2 in the Massif Central and fewer in some
   departments (e.g. Lozère = 14, Creuse = 24, Cantal = 26, Aveyron = 31)
• constantly increasing share of major food stores (around 80% of food sales), greater competition
   and concentration among major store operators.

The current consequences are:
• small local food shops are closing down (another 1 205 small retailers, or 29% of shops with a
  floor area of less than 120 m2, disappeared between 1987 and 1997 in the Massif Central),
• small regional wholesalers are closing down (46% decline in the Massif Central over the past 10
  years).

Except for Cash & Carry stores, only 5 small “multi-line” wholesalers still exist today. They supply
a wide selection of goods: groceries, soft drinks, wines and spirits, cleaning materials, perfumes,
cosmetics and toiletries, fresh products, cheese and frozen food, and some of them supply fruit and
vegetables.
French mass marketing organisations are not interested in supplying small independent retailers,
mainly because of low profitability, high delivery costs and the risk of bad debts.
Small regional wholesalers are the natural and best link between manufacturers and retailers. Unlike
Cash & Carry stores, they deliver goods to each shop, allow time to pay and offer advice for
retailers.
Most of the wholesalers have thus disappeared, and the remaining ones continue to lose retailers
while their logistical costs are rising steadily.
Finally, the constant, rapid decline in the number of sources of supply has two major consequences:
• an independent retailer, even one running a viable business, is at risk of becoming unable to
   obtain proper supplies in the near future,
• owing to the lack of competition between sources of supply, there is a risk of abuse of dominant
   positions. At the same time, to permit wholesalers to achieve economies of scale and thus cut
   their logistical costs, retailers should concentrate their purchases on a single supplier.

Local retailers in rural areas perform a “public service” role, as do the wholesalers who supply
them. Both now face the same problem of profitability and survival.




                                                                                                 60
2.1.20.2 Best practice: Wholesaler/Retailer “Progress Charter”

Three of the 5 “multi-line” wholesalers were involved. They have the logistical facilities to supply
around 1 200 retailers in 8 departments of the Massif Central.
Twenty four independent retailers, future “pilot shops”, belonging to the wholesalers’ networks
were then selected by the local CCIs and UCCIMAC at the suggestion of the wholesalers on the
basis of a number of criteria:
• willing, well-motivated independent retailers
• shops located in rural areas
• shop sales area of between 70 m2 and 120 m2
• shops located in 8 departments of the Massif Central.

Wholesalers and retailers must voluntarily agree to meet the growing and changing needs of
consumers.
Relations between wholesalers and independent retailers must be provided with a legal framework
in the form of balanced contracts, reflecting a partnership based on solidarity and offering future
prospects beyond just the supply contracts.
The objectives are:
• To meet consumer demand (choice, quality, services, prices within 15% of supermarket prices)
• To restore the motivation of the whole supply chain
• To create a balance between the commitments on both sides
• To establish a genuine partnership and solidarity
• To lay the foundation for setting up future “pilot shops”
• To reassure retailers who are suspicious of wholesalers
• To encourage retailers to make changes
• To set progress targets for both parties
• To allow the retailer some freedom
• To establish the basis for a network approach
• To provide a guarantee in the case of public aid.

The attached charter was offered individually to each of the parties by UCCIMAC and signed by all
wholesalers and their retailers in 1998 at meetings arranged at each of the 3 CCIs to which the
wholesalers belong.
The whole project was extended to 2 other wholesalers and their retailers.

2.1.20.3 Conditions of application and transferability

• Awareness of a common problem on both sides
• A common desire to make progress and create solidarity between players in the supply chain
• Existence of an independent body to guarantee impartiality and play a unifying role
• Action taken throughout the sector (wholesalers and retailers simultaneously)
• Critical size and inter-regional approach
• Wholesalers and retailers with inadequate financial resources to cope with investment in training
  and essential equipment
• Need for strong back-up by public authorities.




                                                                                                 61
2.1.20.4 Contact:

Jean-Paul Maisonnial (see page 8).




                                     62
                                                  ANNEX: PROGRESS CHARTER


                                                           PROGRESS CHARTER



The undersigned

The firm of ................., ...........................................................................................................
..................................................................................................................................................
represented by .......................................................

hereinafter “THE WHOLESALER” of the one part

and

Mr and/or Ms .................................., ..................................................................................
..................................................................................................................................................
hereinafter “THE RETAILER” of the other part


Have agreed as follows


I – Undertakings given by the wholesaler:

1-1) Training for the retailer:

• Devise an initial training scheme in partnership with his Chamber of Commerce and Industry and
  UCCIMAC, and afterwards to ensure regular monitoring of his retailer
• Find a good professional to act as a “mentor” for the new retailer. The “general information
  packs” and the “special information packs” produced by UCCIMAC will provide reference
  information for the mentors and can be used to provide the retailer with basic training.
• Train his retailer in commercial management and merchandising techniques.


1-2) Professionalism of the wholesaler:

•   Maintain an efficient logistical set-up,
•   Develop new product ranges (fruit and vegetables, fresh products, frozen food),
•   Develop own-brand goods in all ranges,
•   Ensure that his range is constantly adapted:
        - to new consumer expectations,
        - to meet the specific needs of the retailer’s customers,
        - by carrying regional products and giving his retailer the freedom to buy these goods direct
          if need be.




                                                                                                                                                     63
• Repackage certain products in order to enable the retailer to extend his range while improving his
  stock rotation and hence his cash flow
• Keep an eye on technology, especially developments in information technology
• Train his staff, especially those responsible for monitoring the retailer. The commercial services
  of wholesalers must develop into advisory functions, particularly on merchandising. They can
  obtain support from the “information packs” produced by UCCIMAC.

1-3) Quality of service:

• Provide efficient technical assistance:
       - administrative assistance (what lines to stock, frequency of reordering, sign-posting, etc.),
       - assistance with operating the outlet
       - assistance with accounting and financial analysis
       - advice and continuous monitoring of retailers (merchandising, pricing policy, etc.),
       - information on market trends, types of product
• Create an efficient system for taking orders (MSI, remote operator, etc.)
• Plan deliveries in partnership with the retailer, taking account of the constraints on both sides
• Offer and keep to short delivery times
• Be committed to a high standard of service by reducing the percentage of goods out of stock
• Draw up and guarantee a date contract for each category of products, particularly fresh and
  chilled products. This will make it possible to move towards a “just-in-time” restocking system,
  reducing stock levels and hence costs
• Maintain the cold chain (delivery of refrigerated and deep-frozen products)
• Keep his retailer regularly informed of price changes, giving him enough time to adapt his sales
  policy
• Keep his retailer regularly informed of changes to the range (lines dropped or added)
• Ultimately, promote electronic data interchange (EDI) which will facilitate:
       - the transmission of prices, orders, delivery notes and recommended prices
       - the monitoring of stock rotation and of the development of new products.

1-4) Dynamic marketing:

• Construct a permanent and promotional pricing system which is dynamic, in order to reduce the
  differential in relation to supermarket prices, to win back customers and “territory”. The aim is to
  achieve a maximum differential of 15%
• Define an attractive shop style (inside and out)
• Provide the retailer with the essential equipment for efficient communication:
   - shop sign
   - house style, logo
   - promotion leaflets
   - point-of-sale advertising
   - etc.
• Offer relevant promotions: sales drives linked to particular events or topics, etc.
• Create a genuine network which will link his retailer partners




                                                                                                   64
• Arrange marketing meetings with his network of retailers to enable them:
      - to create a spirit of partnership
      - to exchange relevant information and opinions of all kinds
      - to play an active part in defining the policy on publicising and promoting the group insignia
      - to know about changes made to the range.


II – Undertakings given by the retailer:

2-1) Initial and further training:

To play an active part in the training scheme devised with and by his wholesaler:
       - regular attendance at the initial training set up by his Chamber of Commerce and Industry
       - following the advice of his “mentor”, particularly with the support of the “general
         information packs” and the “special information packs”
       - attending meetings arranged by his wholesaler.

2-2) Professionalism of the retailer:

• Give customers a friendly welcome
• Always be ready to listen to customers
• Offer consumers good quality products and comply with health standards
• Present a range in which, where possible, each sub-category contains the three essentials: a
  national brand, an own-brand and a cheap product
• Offer his customers regional or even local products
• Provide his shop with electronic equipment, particularly for placing orders
• Settle his invoices regularly.

2-3) Quality of service:

•   Obtain at least 80% of his supplies from his wholesaler
•   Stock the group insignia brand as the only distributor’s brand
•   Adhere to the procedures for placing orders, especially deadlines
•   Look after the advertising material provided for him
•   Look after trolleys, palettes and containers
•   Ensure practical access to store-rooms (for example, a lock-up would make it possible to take
    deliveries out of opening hours), which will help to cut logistical costs.

2-4) Dynamic marketing:

• Adhere to the marketing policy of the group insignia (join in promotions, hand out leaflets, set up
  point-of-sale advertising, etc.)
• Pass on the wholesaler’s permanent and promotional offers to consumers in order to win back
  customers and respect the “price differential agreement”
• Keep his shop clean and tidy, for the sake of his customers and in order to present consumers
  with an image consistent with his network
• Play an active part in information meetings organised by his wholesaler




                                                                                                  65
• Pass on information from the field and particularly statistical data to his wholesaler, to enhance
  their mutual knowledge of consumers’ needs.



Done at .........................., date ....................

In one copy for each party




THE RETAILER                                                             THE WHOLESALER




                                                                                                 66
2.1.21 Wholesaler/retailer partnership: financing sales drives

2.1.21.1 Context

Owing to socio-economic factors, retailers are unable to put together large volume orders sufficient
to purchase goods at prices competitive with those in supermarkets. Their financial resources are
normally limited, so that their purchasing power is fairly limited too. The wholesaler is able to
concentrate his purchases so that he can buy at competitive prices, but the retailer, lacking financial
resources, cannot buy at the right time and in the quantities necessary for good management. Above
all, this problem arises in the purchase of seasonal goods such as insect repellent, make-up or sun-
tan products in the toiletries and cosmetics sector, or Christmas lines in the food sector, and when
heavy investment is needed to maintain the stocks and prices necessary to offer a good range in the
shops.

2.1.21.2 Best practice

To solve this problem and help the retailer faced with the sales season to offer a full range of
specific services as stated and increase his purchasing power, the wholesaler González Cabello S.A.
carries out what we shall call special offer campaigns.
These special campaigns consist in making the offer available to the retailer in advance so that he
has the whole range necessary at competitive prices, the wholesaler financing the purchase until the
retailer’s sales drive ends.
This ensures that the retailer has the whole product range necessary, on sale at competitive prices
without having to obtain any additional finance, transferring the moment of payment to the moment
of sale.
In general, the special offer campaign financing policy entails a very considerable economic and
financial effort by the wholesaler for the benefit of the retailer.
It illustrates one of the services provided by the wholesaler (or the agency performing that function)
for small retail businesses where access to credit is concerned.

2.1.21.3 Conditions of transfer

To transfer this commercial practice, all that is needed is a wholesaler prepared to finance the
products for a sufficient period of time until their subsequent sale. This requires the wholesaler to
find additional finance, and that must not be reflected in the price of the goods involved in these
special offer campaigns.

2.1.21.4 Contact:

Rafael Gonzalez Cabello (see page 8).




                                                                                                    67
             Training and advice for shop-keepers
The new conditions for operating a business demand the acquisition of new expertise, in order to
play an active part in a bulk-buying organisation, to prepare promotion campaigns, and to make
maximum use of the new management tools, especially modern information technology.

Similarly, the establishment, development and transfer stages of a business are phases during which
the business strategy must be analysed in detail.

In rural areas where, more than before, it is necessary to struggle against the negative impact of the
shop-keeper’s isolation, it is worth adapting personalised training and advice to the specific
situation.




                                                                                                   68
2.1.22 Specific training in the operation of a multi-service shop for job-seekers

2.1.22.1 Context

To succeed, the multi-service shop must offer a wider range of services commonly lacking in rural
areas.
The success of a multi-service shop is based on three fundamental elements:
    -  the outlet and how it is fitted out
    -  supplies: find the right supplier - “he must be a partner for the business”
    -  the operator: competence, enthusiasm, experience and training.
Running a multi-service shop is in fact a full-time occupation. The success and survival of this type
of shop depend on the capability and expertise of the owner.
On the basis of the results of various studies, the CCI of Rochefort and Saintonge (France) found
that:
    -  Operators of multi-service shops often have not received any initial training in the trade and
       their subsequent activity confirms the shortcomings observed in various areas (stock
       management, display, etc.).
    -  The operator’s lack of competence is the primary cause of the failure of this type of shop.

2.1.22.2 Best practice

Creation by the CCI of Rochefort and Saintonge of a “training scheme for the multi-service store
operator” in partnership with COOP ATLANTIQUE (regional food distribution company).

Training on the ground: theory/practical training: 2 months / business management course: 2 months
   -   Objectives: • to prepare potential operators of multi-service food shops and support them
       in their efforts to set up or take over this type of shop
                        • to form a reservoir of potential shop-keepers.
   -   People: Job-seekers wanting local work, planning to work in the grocery trade
   -   Teaching content: Commercial techniques (stock management, range, hygiene, etc.)
       Accounting and management. Support for setting up or taking over a multi-service shop.
       Local service. Information technology. General knowledge (of the business, the market, etc.)
   -   Selection: based on application followed by interview with a selection panel.

2.1.22.3 Conditions of application and transferability

       Have an intermediate CCI type of agency to run the project
       Have a private sector partner (food distribution company, professional trader/sales outlet
       operator
       Adapt the teaching content to the economic, social and cultural context of the country.

2.1.22.4 Contact:

Jean-Luc Cauquil (see page 9).




                                                                                                  69
2.1.23 Reference documents for the initial and continuing training of retailers,
      wholesalers and CCI officers.

2.1.23.1 Context

In order to respond better to the growing demand from consumers and curb the exodus to major
centres, even a small shop has to offer:
• a wide selection of products
• quality products
• competitive prices in relation to those charged by supermarkets
• services which will help secure customer loyalty.

A small independent shopkeeper owns the business and often works by himself. He has to perform
the roles of merchandiser, salesman and manager and it takes great professionalism to master all
these skills.

Nowadays, many retailers have come from other sectors of activity (they were often previously
unemployed) and therefore do not know the basics of the business, or the special characteristics of
the wide range of products which they must now offer consumers.

Small independent retailers do not have access to facilities for initial and continuing training such as
those which mass marketing organisations make available to their employees or franchisees.

Small wholesalers work on narrow margins which do not give them the scope to devise and
implement training programmes for their retailers. The sales staff of wholesalers spend almost all
their time selling and cannot be lavish with their advice.

CCI officers are generalists and therefore do not have detailed knowledge of the special
characteristics of a local shop in a rural area.

2.1.23.2 Best practice

The whole experimental project was piloted by UCCIMAC in 1997/1998 in collaboration with the
member CCIs.

Reference documents were drafted jointly by a specialist consultant and UCCIMAC. The cost of
production and publication came to EUR 55 000.

The objectives are:
• To establish a basic set of documentation on all the areas of professional knowledge essential for
the proper accounting and commercial management of a local shop.
• To adapt the training tools used by mass marketing organisations to shops with an area of
between 100 and 300 m2.
• To prepare initial and continuing training aids to be used by:
- CCI officers (as a basis for their work of providing training and advice)
- wholesalers’ sales staff (they will become advisers and not just salesmen)
- small independent retailers already in business (as a means of training themselves).




                                                                                                     70
Nine documents were produced in 1997:
I - The 3 general information packs:
1 - Market research (what one must know before deciding to set up or buy a shop)
2 - The shop and its layout (standards, fitting out)
3 - Managing the accounts (basic accounting documents which a retailer must keep)
II - The 6 special information packs (the main families of products which a local shop should offer
its customers):
4 - Fruits and vegetables
5 - Self-service chilled foods and pre-packaged cheese
6 - Cheese counter
7 - Deep-frozen food
8 - Groceries
9 - Drinks.
The subjects covered are:
product knowledge, potential household spending, product classification, seasonal products, ranges,
fitting out, regulations, sales drives and promotions, etc.

The documents were circulated with comments by UCCIMAC to all parties involved during the
training stage described in the next case study:
• Commercial Officers of the CCIs belonging to UCCIMAC
• Wholesalers’ sales staff
• 24 independent retailer volunteers selected as future “pilot shops”, following the training
    experiment described in the next case study.
These documents are also available for all CCIs in France on request.

In 1999 they will be supplemented by 3 new information packs (cleaning
products/cosmetics/toiletries, self-service delicatessen, commercial management of the sales outlet)
during the second stage of the experiment (jointly financed by ERDF, UCCIMAC and wholesalers).

2.1.23.3 Conditions of application and transferability

•   Existence of an independent body to guarantee that the information is objective
•   Achieve economies of scale by wide circulation
•   Need to find specialists in the many areas involved in managing a shop
•   Draw up documents suited to the types of shop and easy for retailers to use
•   Financial support by public authorities is necessary to produce the initial document and facilitate
    wide circulation
•   Provision must be made for necessary up-dating, which must therefore be financed
•   Have links on the ground (CCI and wholesalers) to implement the training
•   Willingness of the players to undergo training.

2.1.23.4 Contact:

Dr. Enrico Cozzio (see page 9).
Jean-Paul Maisonnial (see page 8).




                                                                                                    71
2.1.24 Continuing training for retailers and wholesalers’ sales staff

2.1.24.1 Context

A small independent retailer owns the business and often works by himself. He has to perform the
roles of buyer, merchandiser, salesman and manager.
To satisfy the growing and changing needs of consumers he must:
• offer a wide range of quality products at prices competitive with those charged by supermarkets
• present his sales range in a shop which is conveniently laid out for shoppers used to the
    environment offered by supermarkets
• know and apply modern merchandising techniques
• review his operation at frequent intervals and compare his range with what his competitors offer
• be able to negotiate with his suppliers
• know exactly how his outlet is performing in order to be able to adapt his sales policy.

The long working hours necessary to serve the customers, isolation, and fear of change are all
practical and psychological barriers to training.
New retailers are increasingly coming from other sectors of activity (often previously unemployed)
and therefore do not know the basics of a trade which is in fact becoming more complex.

Traditional group training is often theory-based and provided away from the working environment.
Retailers consider it ill-suited to their daily life and therefore not really applicable.
Passing on “best practice” from one shop-keeper to another, rather than from adviser to shop-
keeper, is often more effective because retailers have greater faith in it.

Small wholesalers work on limited margins which do not give them scope to implement training
schemes. Retailers often suspect the sales staff of offering advice which is not really objective.

2.1.24.2 Best practice

The experiment was piloted by UCCIMAC in 1997/1998 in collaboration with the member CCIs.

The training was designed by a Training Expert and by UCCIMAC and provided by the expert at
each outlet for 24 volunteer retailers selected as future “pilot shops”, for a total cost of EUR 40 000.

The objectives are:
• To produce a training scheme which combines theory with practice
• To restore the motivation of independent retailers
• To make directly applicable recommendations
• To encourage retailers to want to augment their expertise.
• To organise the basis for transferring know-how between volunteer retailers, future “pilot
   shops” and other retailers, to train future “mentors” for new retailers (transfer between
   generations)
• To facilitate constructive (positive) negotiation between retailers and their wholesalers
• To offer tools which retailers can use to train themselves, and to measure and monitor their
   business (initiation in business management).




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The training programme was based on the practical use of the 9 reference documents described in
the previous case study. The training lasted three days for each retailer.

- Programme for the first two days:
   • Optimise the shop lay-out to increase turnover, margins and hence profitability,
   • Basic range and changes to meet consumers’ requirements (seasonal, new and regional
     products),
   • Know the catchment area and then identify and study the competition,
   • Completely revamp a display with a high margin and strong brand image (e.g. fresh products).
     Other displays will be revamped with the help of the wholesaler’s sales staff,
   • Explain the tools which retailers can use to train themselves and to measure business activity
     (initiation in business management and offering more flexible selling prices).

- Programme for the third day (2 to 3 months later):
   • Check whether recommendations have been implemented,
   • Review problems arising and suggest remedies,
   • Check the progress of the partnership between retailer and wholesaler and offer the “Progress
   Charter” (§2.2.5).

An individual report (findings, recommendations) was produced in both training stages and
forwarded to the retailer, the commercial officer of his local CCI and his wholesaler.

While the training was in progress, the CCI’s commercial officers listed prices in rival shops in
order to encourage retailers to review their sales policy or even negotiate better prices with their
wholesalers.
Where necessary, wholesalers provided assistance (help with total or partial revamping of shops,
promotions or more flexible selling prices).

This stage of the project ended in June 1998 and produced very good results:
• at the end of the training programme, the majority of the retailers were very satisfied and were
   applying the new techniques in managing their shops (10 retailers had revamped their shops, 15
   were expanding their range, 10 had increased their sales by more than 50%, especially in fresh
   products)
• all the retailers have since signed the Wholesaler/Retailer “Progress Charter”.

The second stage of the project will take place in 1999 (jointly funded by ERDF, UCCIMAC and
wholesalers); it will provide the opportunity to try out specific training for retailers in the
commercial management of their outlets and provide them with information technology, linked to
the wholesalers’ computer systems.

2.1.24.3 Conditions of application and transferability

•   Existence of an independent association guaranteeing that the information given to retailers is
    objective
•   Action involving all parties (wholesalers, retailers and CCI)
•   Retailers’ willingness to train and ultimately become mentors, pilot shops
•   The shop must have a minimum level of turnover (profitability) and floor area (around 100 m2)
    in order to implement the merchandising and pricing policy recommendations




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•   Need for good partnership with the wholesaler (training, monitoring, selling prices to the
    retailer)
•   Three days’ training is not enough and other training will be necessary, notably in business
    management
•   Individual training is more effective but costs much more than traditional group training and
    requires substantial public authority aid
•   For efficient business management, shops must have computerised equipment and this
    equipment must be connected with the wholesaler’s systems
•   Since retailers lack financial resources (for shop fitting and computer equipment) they need
    government aid to finance the facilities.

2.1.24.4 Contact:

Jean-Paul Maisonnial (see page 8).




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2.1.25 Training adapted to itinerant traders

2.1.25.1 Context

The activity of itinerant traders tends to take up a great deal of time and many work as a family. All
the workers have to be present every day.

In principle, therefore, they are unable to acquire training, whereas training is essential for the good
management of the business.
Knowing how to keep up with technical innovation is also particularly important as regards new
information technologies.

2.1.25.2 Best practice

a) Objective

Train itinerant traders free of charge at their place of work.

b) Means

   In the Netherlands, itinerant traders receive free training funded by the State when they register at
the Retail Trade Office.

   An agreement is concluded with a training agency which sends an adviser out for 2 hours
to train 2 or 3 traders at a time.

2.1.25.3 Conditions of application and transferability

This provision can be adapted according to the training rules in each country. The principle of on-
the-spot training is becoming widespread.

2.1.25.4 Contact:

André Esselink, Secrétaire Général
Rolf Koops, Secrétariat
Union Européenne du Commerce Ambulant (UECA)
P.O. Box 90703
NL – 2509 LS Den Haag
Tél.: 31-70-3385605
E-mail: r.koops@hbd.nl




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2.1.26 The mentor - an adviser for self-help

2.1.26.1 Context

Country shops in rural areas are often small and have few employees. The shop is usually run by a
man and wife, or by a whole family. Because the shops are small the owners are required to have
many different skills. The owner is manager, accountant, marketing analyst, buyer, public relations
man, office clerk, maintenance man and errand boy. He is responsible for decisions regarding
overall policy, small details and daily routines.
The shop owner is tied down to his shop. His workday is at least the length of the stores' business
day and often longer as he is responsible for preparing for opening the store next day. Demand for
profitability requires that the owner does much of the routine work that an employee would
ordinarily perform. Employees cost money and money is not over abundant in these shops. Routine
work often takes time away from administration and planning and the owner often finds himself in a
vicious circle.

The country shop owner becomes isolated due to his workload. Support from fellow owners in
merchants associations has also been deficient. If an association organises symposia, the owner is
often unable to take time off to attend. These shop owners have gradually fallen behind in terms of
knowledge, training and contact with their colleagues.

The vastness of Sweden's geography and extensive areas with sparse population have led the
national government to take measures in support of commercial services in sparsely populated
districts. Support has come in the form of investment subsidies from regional government or as
direct financial aid, if and when the economic situation has been acute. Such aid has been used to
avert economic crisis within a business. Projects aimed at avoiding such crises have also been
started. Since 1994, education programmes for country shop merchants, initiated by the Swedish
Consumer Agency, have been in action under the direction of the Association of the Furtherance of
Countryside Food retailers (FLF). This programme has attracted more than 1 000 participants. The
education focuses on practical aspects of business economy and marketing techniques as well as
training in the proper handling of fresh foods. The programme contributes to bringing the shop
owners out of their isolation and leads to spontaneous "networks" being formed among merchants.

With the help of consultants, in-depth analyses have been made of market trends and the problems
and possibilities for country shops. Shop owners are encouraged to discuss solutions and
alternatives. This project has shown that there are solutions and measures which can be taken to
improve the situation for country shops. One remaining problem is the implementation of new
methods, as the shop owner often lacks experience in such matters. As an extension of the project, a
mentor system has been initiated by FLF.

2.1.26.2 Best practice

Mentors have been recruited among former merchants. A mentor has to have an interest in people
and the interest and ability to engage himself in the problems facing country shop owners. He
should have knowledge of the branch and community organisations. He must be mentally alert and
intelligent. A willingness to help others is obviously required. The economic compensation is very
modest. A mentor is motivated by his desire to help the shop owners.




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Under FLF direction, four mentors have been chosen. Each is active in his respective county:
Värmland, Närke, Västra Götaland and Västerbotten. Financing has been arranged in different ways.
In Värmland and Närke the mentors are employed by FLF in a project which is financed by the
county government. In Västra Götaland and Västerbotten the project is partially financed by EU area
5b and 6 funding.

 A mentor's responsibility is to create a network among the shop owners and to ensure that the
network leads to positive activities. The mentor is also available as a resource for individual
merchants who request help. In Värmland and Närke the mentor's role has been partially steered by
the County Administrative Board. The County Board has chosen certain shops as priorities due to
their problems and their special significance to their communities. These shops have received extra
attention from the mentors. The mentor's knowledge and experience is also useful to the politicians
and civil servants with whom he has contact.

2.1.26.3 Conditions of application and transferability

The mentor programme has produced good results. In Värmland and Närke, where the programme
has been active the longest time, the network among merchants has led to combined advertising.
The shops coordinate advertisements or campaigns sponsored by their wholesalers. The mentors
have organised this advertising and have contacted wholesalers, regarding which products should be
highlighted. Mentors have accompanied shop owners during negotiations with the banks, resulting
in lower interest rates on their loans with substantial savings for the merchants.

It is important that the role of the mentor is clearly defined. The mentor should be a trustworthy
advisor and a resource to the merchant. He must be a good listener and be sensitive to the needs and
wishes of the merchant. Operation of the store is solely the owner's responsibility. The mentor may
never take over that task. The mentor should however, give encouragement to the owner's good
ideas and support their implementation. The mentor's approach to the merchant is that of a colleague
offering help. The mentor's advice differs from that of the wholesaler's representative, who is often
perceived by the merchant as having the wholesaler's best interest at heart.

Our experiences of the mentor program are very positive and we are hopeful that funding can be
made available as soon as possible for increasing the number of mentors and spreading the activity
over all of Sweden.

2.1.26.4 Contact :

Leif Larsson (see page 10).




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2.1.27 Network training in cooperatives

2.1.27.1 Context

Market conditions in rural areas have changed drastically during the last few years. Consumer
mobility, changes in demographic structure and the increasing number of superstores have seriously
affected the old-fashioned corner shop.
The traditional ways of doing business have changed greatly and often the shop owners or their staff
are culturally unprepared to face the new situation. They are unable to face new market conditions
that require a drastic streamlining of costs and the forever-changing demands of their customers.
The modernisation of a retail business is not limited to technological or commercial innovation, but
it is primarily a cultural question.
In the past, a shop owner felt important, with a very well-defined role in the community. Today,
he/she has often lost his/her social identity, feels marginalised, and has difficulty in understanding
market developments and consumer needs.

In order to be successful, small shop owners need to become aware of the potential developments,
the required changes currently taking place and the need to join together in order to be able
to tackle the market challenges.
Training then becomes an essential instrument to:
       • motivate people
       • improve management results
       • encourage associations and cooperation
       • respond to customer needs, even in marginal areas.

According to a survey carried out by the Italian Chamber of Commerce of Trento in respect of the
“retail sale of indispensable goods in peripheral areas,” 24.37% of retailers are unhappy about the
sale developments over the last three years, and only 49.5% of them consider the overall trend of
their business adequate.

2.1.27.2 Best practice

Training is a positive tool to assist the development of the distributive trade in less-favoured rural
areas.
While deciding upon the training format to be offered to people working in this area, special
attention must be given to the main task of restoring the confidence of the small retailers, trying to
raise them out of their feelings of isolation and solitude, so that they can find a distinctive social
role and a satisfying professional motivation.
In training we speak about vocational skills to be re-created or to be developed among those
employed in small retail shops.
A recent survey by the European Centre for the Development of Vocational Training (CEDEFOP)
on “Work organisation and qualifications in the retail sector - the case of the micro-enterprise
(1997)” points out that the key to success is always customer orientation, and that vocational
abilities have to be found in the fields of:
       •   initiation and management of the modernisation process
       •   changes in the organisation of labour
       •   customer orientation and market positioning as a constant task
       •   connecting qualifications.




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It is necessary to develop the ability to find partners outside one’s business capable of adequately
supporting the modernisation process through consultation and services networks (associations,
cooperatives, trade chains, etc.).
It is therefore indispensable to build networks that may take the form of either cooperatives
(retailers or consumers) or professional associations.

This has been done successfully by the Federazione Trentina delle Cooperative (Via Segantini 10,
Trento - Italy) that has been associating, among other things, 143 small and medium-sized
consumers cooperatives for more than 100 years. These cooperatives are spread all over the
Province of Trento (Italy), mainly in villages of a few hundred inhabitants in mountain areas.
In this way, consumers assume responsibility for keeping the service locally through their
purchases.
The Sezione Scuola e Formazione della Federazione organises several training courses which deal
above all with:

       •   work quality and customer service
       •   management control with special attention to stock control
       •   the use of new information technologies
       •   the transfer by inheritance of businesses
       •   short training course to update staff on matters pertaining to taxation and employment
           regulations.

In order to plan tailor-made training courses suitable for every situation, surveys are carried out
both among consumers (to assess their degree of satisfaction and collect suggestions) and
employees (to assess the degree of job satisfaction). More than 7 000 surveys directed at consumers
and more than 500 directed at the employees of cooperatives have been analysed.
Training courses are decided upon by the Sezione Scuola e Formazione della Federazione Trentina
delle Cooperative according to the training needs of the relevant bodies. The Federazione is also in
charge of finding the funds that are needed to carry out the training projects.
Funds can originate from:

       a. the European Social Funds (ob. 4 and ob. 5b), for employees
       b. the Autonomous Region of Trentino Alto Adige, for the training of Board members and
           auditors.
       c. Promocoop (a company that promotes the concept of cooperation) financed by all the
           Trentino cooperatives, which pay 3% of their yearly profit to Promocoop.

The Sezione Scuola e Formazione della Federazione Trentina delle Cooperative uses the training
lab of SAIT for role-playing activities for shop-related tasks, for staff employed as cashiers, shop
assistants, butchers, etc.
Moreover, training is not an isolated effort, but it is an integral part of much larger projects that deal
with the merger of neighbouring cooperatives and the evaluation of local products through pro-
active approaches that involve local authorities and individuals.




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2.1.27.3 Conditions for application and transferability

The methods applied in these courses have to be as interactive as possible, starting from the
participants’ real experiences through role-playing. Most of the people who attend courses have the
chance to train only after normal working hours when they are already tired, so that a conventional
school approach may be too heavy and not appropriate.
In order for staff training to be effective, it should begin at the top, with owners and management,
to make the subsequent training of staff easier, above all as far as overall quality is concerned.
It should be pointed out that more and more often training is linked to services provided by
consultants and it thus becomes a customised service, oriented towards solving specific problems
and learning how to organise.
The consultant, animator and regional trainer is becoming an increasingly important figure in the
successful operation of a small local business.
To conclude, it can be said that training is a valid instrument in the revitalisation of the trade of
rural shops. This is especially true when such training involves other regional entities in integrated
projects, from consumers, to public officials, chambers of commerce, trade associations, etc. and the
people who actually manage and benefit from this business maintaining good interpersonal relations
with the whole of the local community.
This is the true meaning of “social cohesion” which is one of the fundamental objectives of the
European Union.

2.1.27.4 Contact :

Dr. Enrico Cozzio (see page 9).




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2.1.28 Funding of advisory services for retailers

2.1.28.1 Context

Owing to a large number of subjective factors (e.g. lack of entrepreneurial competence and practical
experience shop management) and objective conditions (e.g. unfavourable local infrastructure,
siting) shop owners need individual advisers, in particular in the first few years after starting up the
shop. Professional advisers help shop-owners solve problems regarding:
-    the necessary specifications or corrections to the business plan
-    measures to protect or to improve the market position
-    measures to safeguard liquidity
-    changes in customer behaviour and customer needs
-    decisions on expansion or cooperation
-    modifications concerning the division of work within the business.

Most of the shops are micro-/family enterprises. The shop-owner is also the most important worker.
From this double function results an enormous pressure that leads to a lack of time available for
safeguarding the entirety of managerial functions. On the other hand small shops in particular are
faced with great pressure to innovate and react to market changes.

To avoid the additional financial burden, shop-owners tend to refer to professional consultants too
late. In view of the tight financial position of shops, assistance for long-term supportive consultancy
services is needed to make it easier for shop-owners to use an advisory service offering "help for
self-help" at the right time.

2.1.28.2 Best practice

In Germany persons establishing a shop may use a certain proportion of their credit to pay for the
consultancy services during the start-up phase. Unemployed persons can have free coaching/support
consultancy after starting up a shop (for a maximum of 6 months).

Under a number of programmes and measures designed to safeguard the survival of small and
medium-sized enterprises, national and regional authorities and trade associations provide financial
aid for the pro-rata financing of the use of long-term supportive consultancy services. In general, the
shop-owner's share amounts to 50 % of the adviser's remuneration and travel and accommodation
costs.

In order to support SMEs the Federal Ministry of Economic Affairs subsidises several types of
consultancy services. Depending on the type of consultancy 40% - 50 % of the costs are subsidised
up to a maximum of 1 700.

The shop-owner chooses a trusted consultancy firm, enters into a contract with them and settles up
with the sponsor (as regards content and finances).

Long-term supportive consultancy allows the transition from a consultancy service concerned
mainly with analysing the actual situation to one which mainly analyses the process of change. As a
result of systematic success monitoring, potential trouble spots can be identified so that measures
for overcoming them can be initiated in time.




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Synergistic effects appear particularly when the consultant monitors the performance of the
recommendations made. The consultant serves as a coach for the shop-owner.

2.1.28.3 Conditions of application and transferability

-   Rules and regulations safeguarding the survival of small and medium-sized enterprises - these
    are necessary for the allocation of funds.
-   An up-to-date survey of public and private consultancy institutes specialised in small rural
    shops.
-   Good cooperation between all authorities, institutions, associations and interest groups involved
    in trade.

2.1.28.4 Contact :

Dieter Urbanski (see page 10).




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2.1.29 Support - advice - continuing training of retailers

2.1.29.1 Context

Small shops are characterised by a number of features requiring the support of third persons.
In general, such shops are micro-/family enterprises, whose owners are also the most important
worker. As a result, shop-owners are rarely able to attend regular training.
Owing to the permanent overload caused by several subjective and objective factors, shop-owners
are unable to fully carry out the main tasks (e.g. work on business objectives, work-sharing/team
work, planning, performance evaluation, remuneration and stimulation, training, image, customer
care, modern selling techniques, marketing profile, etc.). To find a solution, tailor-made help to self-
help is needed from outside the business.
Inadequate data-processing equipment, the absence of a proper network and prepared data for
retailers, along with the fear of competition or a lack of communicative abilities restrict the
possibilities for self-organisation.
Many shop-owners are conscious of their lack of leadership skills, without being able to name them
exactly or find a solution. On the one hand this results from a lack of entrepreneurial competence in
administrative, commercial, legal and similar fields. On the other, the ability to recognise and react
to changes in the behaviour and needs of customers becomes more important than ever.
From the financial point of view, shop-owners need a solution that allows a compromise between
the recognised need for training and their limited time and financial resources.

2.1.29.2 Best practice

Several sponsoring models exist in Germany under which low-cost consultancy services are offered
to small-sized enterprises, combined with training. The shop-owner's financial contribution amounts
to 15 %-50 % of the total sum.

The chief characteristic of this measure is that the concrete need for training, demonstrated in long-
term support consultancy, is directly translated into special training subjects and events.

In the shop-owners' opinion, the combination of traditional consultancy services and training
provided by a single source has a lot of beneficial effects.
For instance, a detailed analysis of the shop's position (a component of consultancy) enables the
training subjects to be determined and their effectiveness to be evaluated for each particular working
place. There is no problem making some of the training very specific, if necessary.
The consultant is also the trainer/coach (most subjects). This means that the trainees trust the
trainer, since they are aware of his technical competence from their own experience. The identity of
the consultant and trainer strengthens the participants' motivation and their identification with the
training. The double function also ensures a high transfer rate of the training material.
The technical and organisational expenditure is relatively low, because the main part of the training/
coaching takes place in the shop. If necessary, all details are directly agreed between the consultant
and the shop-owner.
Events concerning more general subjects (for example "presentation of goods") take place together
with other shops. In that way costs can be reduced and there is a good opportunity for the exchange
of experiences.
The combination of consultancy and training helps to avoid an unnecessary doubling of activities
and contributes to cost containment.




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2.1.29.3 Conditions of application and transferability

The shop-owner must have a positive attitude towards the training. He must be aware of the
possibilities of the training and its limitations.
To perform their double function, consultants must have an excellent knowledge of both retailing
and training (technical competence), a complete command of the methods of imparting knowledge
and skills (methods competence) and suitable pedagogic and psychological abilities (social
competence).
Rules and regulations allowing funding of combined consultancy and training.

2.1.29.4 Contact :

Dieter Urbanski (see page 10).




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2.1.30 Joint Training for Retailers

2.1.30.1 Context

Following the opening of a supermarket, which was part of a large national chain, on the outskirts of
the market town of Aberteifi in West Wales, local retailers became concerned about the effect on
their trade. This was compounded by the fact that the supermarket had an in-store bakery, a
newsagent and a petrol station, with a pharmacy planned for the future.

As a result retailers formed a collaborative alliance to overcome the percieved challenges, which in
turn acted as a catalyst to a number of follow-on activities to reverse the decline in the town centre.

Objectives of Project:

     Improving the competitiveness of town centre retailers.
     Improving the general appeal of the shopping area.
     Attracting more local shopping.
     Lessening the leakage of money outside the area.
     Developing a sustainable partnership between the public and private sectors

2.1.30.2 Best Practice

The project was initiated by Menter a Busnes, a local economic development company, who
commissioned research amongst 750 of the local population to determine local shopping habits and
to analyse the leakage of spending from the town. Having seen the results of the survey, retailers
agreed that there were major weaknesses within their sector, and it was decided to implement a joint
training programme with 10 businesses to focus on

a)      Shop Planning and Design
b)      Customer Care
c)      Marketing

A collaborative alliance was formed to fund the training including the retailers, the local Training
and Enterprise Council (TEC) and Menter a Busnes, with some match funding from Europe.
External trainers were brought in, who had experience of working with Pizza Hut, Marks and
Spencer and other high street multiples.

At the time of the project, there were no other initiatives in the area, but this project acted as a
catalyst to the setting-up of a larger Town Centre Action Group, involving consumers, together with
representatives from the private, public and voluntary sectors. A successful bid was made to the
Development Board for Rural Wales (the statutory development agency) for funding under their
‘Market Town’ initiative, which led to the appointment of a full-time Town Centre project manager,
whose role encompassed commercial and tourism development.

This in turn led to Aberteifi becoming part of the ‘Historic Town’ initiative, and benefiting from
Wales Tourist Board funding, as well as Local Authority schemes to improve parking, install street
furniture and make pavement improvements. There was therefore good synergy between the local
development bodies, the Local Authroity, the Tourist Board, the Town Council and local
Community Groups, including the Chamber of Commerce.




                                                                                                       85
The town continues to develop its ideas for improving the trading environment, and has been
exploring the introduction of a loyalty card which can be used at all of the town centre shops.

2.1.30.3 Conditions of Application and Transferability

   The use of an external catalyst (Menter a Busnes in this case) who has good local knowledge,
   but is removed from the local politics of the town.
   Undertaking market research as a basis for sustainable action.
   Concentrating on a small group of the most motivated retailers initially – others will join in
   when they perceive the benefits!
   Getting the retailers to contribute financially to the programme, which gives it greater value.
   Using high quality trainers who are experts in their field.
   Creating a partnership of the public and private sector
   Ensuring follow-on action to harness retailers’ motivation and momentum.
   Appointing a Town Centre manager to co-ordinate initiatives.

2.1.30.4 Contacts:

Betsan Caldwell (see page 9).

Gareth Davies
c/o Menter a Busnes
Uned 3 Parc Gwyddoniaeth
Aberystwyth
Ceredigion SY23 3AH
Cymru / Wales
UK




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2.1.31 Distance learning

2.1.31.1 Context

Shops and service businesses need specific types of training. Very practical forms of training are
best for these people, who are not very training-conscious, not really familiar with “traditional”
types of training and not always readily available.

The real needs of customers, new rules of competition, and the development of new partnerships
mean that small shops and service businesses increasingly need skills in management, purchasing,
administrative control and even in the management and definition of a strategy to be adopted.

It is important to improve access to training for these small businesses and, to that end, it is essential
to offer “tailor-made” training systems taking account of the following constraints
    - the business manager has little time to attend a training centre
    - there is a need for techniques which can be applied to the business immediately (practical use of
      the techniques presented).

2.1.31.2 Best practice

Experiment conducted by the CCIs of the Auvergne region (France): creation of a distance learning
concept specifically geared to small businesses:

The proposed concept is simple. It is based on:
- alternating days of group attendance at a training centre with periods of distance learning pursued
  by each trainee in his own business according to the time he can spare
- a teaching aid designed specially on the basis of the clearly identified needs of shop-keepers.
  This offers real guidance and is handed out progressively to trainees throughout the course. The
  teaching content of this aid is brought out by practical, well-organised, attractive and amusing
  presentation,
- personal monitoring for shop-keepers, provided by training experts. This entails exercises which
  are corrected and returned during the distance learning periods. Some of the exercises offered are
  based on the trainee’s own business and are corrected on a personal basis.

Using this concept the CCIs of the Auvergne region designed 2 distance learning programmes for
shop-keepers.

Since 1994 the “Seven Sales Measures” method has provided a folder and video cassettes which
give a dramatised presentation of best practice to be adopted in selling. The objective of this training
is to master the art of selling by acquiring self-knowledge and gaining better knowledge of
customers and sales techniques.

More recently (early 1998) the “Better Business Management” method was developed with financial
aid from the ESF (Objective 4), which paid EUR 42 000 out of a total cost of EUR 125 000. This
method enables business managers to acquire the management concepts and techniques which they
need to set up genuine aids to decision-making and negotiation. The training is arranged in the form
of 3 group training days and 80 days of distance learning. 8 sequences are offered, with continuous
support by telephone and exercises. The teaching manual, produced in the form of a scenario,
presents a virtual shop “Gift Island”. During this course the shop-keeper will learn:




                                                                                                       87
  - to read and interpret accounting documents
  - to make a financial diagnosis of his business
  - to establish a proper set of instruments for taking good management decisions.

Each course is offered to business managers at a price of EUR 750; in the majority of cases, this
will be refunded in full out of their training insurance fund.

2.1.31.3 Conditions of application and transferability

• Alternate group sessions and distance learning.

• Personalise the training by allowing the business to take the techniques explained and apply them
  immediately to its own case.

• Provide support for the trainee during distance learning (telephone help-line).

• Plan for a small financial contribution from the shop-keeper once the agencies financing the
  training have paid up.

• Produce attractive teaching aids which enable shop-keepers to “act out” situations.

2.1.31.4 Contact:

Michèle Bernard (see page 10).
Dr. Enrico Cozzio (voir page 9).




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2.1.32 Training support for people setting up in business

2.1.32.1 Context

Setting up a business is often seen as the solution to employment problems. This idea, encouraged
by politicians among others, is shared by many who plan to go into business and, having no precise
idea of what they will do, are looking for information, advice and methods.

To set up and run a business requires certain technical skills, but those who do so must also adopt a
specific, coherent approach (especially when setting up a business for the first time) in order to
evaluate the project and gain a better idea of the shop-keeper’s trade (particularly management and
sales techniques).

It must be said that, all too often, a large percentage of new businesses will disappear within the first
few years, even though they were successful in the start-up phase.

To provide better information and guidance for would-be entrepreneurs, and to improve their
success and survival rate, it seems essential to take action with regard to those who intend to set up
or take over a business. That is why it is vital to establish awareness, training, subsequent
monitoring and support programmes.

2.1.32.2 Best practice

Awareness: business start-up awareness campaigns run by the French CCIs

The CCIs offer a 3-stage scheme for which the State provides finance of 59.91 per trainee and the
European Social Fund provides 67.53 per trainee. It aims to enable prospective entrepreneurs to
“develop an idea”, “produce a detailed plan” and finally “take good decisions by choosing the right
approach”.

Stage 1: free group information sessions lasting half a day are arranged at frequent intervals so that
prospective entrepreneurs can obtain all the information they need to ask themselves “the right
questions in order to succeed”. The teaching approach used consists in encouraging the potential
entrepreneur to ask himself questions about his project (is it realistic, profitable, etc.)

Stage 2: a 3-day training course which aims to examine in greater depth the main techniques
necessary for implementing a project. This should give people the essential professional skills for
the shop-keeper’s trade by encouraging them to follow other more specific training courses where
necessary.
The main topics tackled are: the market, commercial positioning, and managing and organising the
business.

Stage 3: during 3 hours of individual consultation, a CCI adviser helps the future shop-owner to
complete a diagnostic guide - “The right questions in order to succeed” and carries out a provisional
study based on a viability threshold.

So it is a matter of frequent, short sessions used for listing the essential questions which will make it
possible to take good decisions and minimise the failure rate: market, competition, finance, legal
forms, social and tax regulations, etc.




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Next it is necessary to offer to carry out a complete feasibility study on the project for the would-be
shop-keeper. This study should enable him to specify the details of his project, make adjustments
and even in some cases abandon it, but in full knowledge of the facts.

Training: training programme set up in Auvergne

Lengthy training courses (240 hours) are offered to would-be entrepreneurs who have attended a
business start-up awareness session and have produced a detailed project. These training courses,
“Making a Success of your Business in Auvergne”, financed by the Regional Council (6.10 per
trainee per hour) and run by the CCIs in the region are individually tailored by adapting the content
to each project on the following subjects:
   - market research
   - sales techniques and commercial strategies
   - management, financial analysis, accounting
   - communication
   - legal aspects
   - administrative formalities.

The training sessions are supplemented by a module for finding out about the business
environment, during which trainees establish contact with suppliers, bankers, etc. By the end of the
course the trainees have acquired “business know-how” and the projects can be put into practice.

Support

To ensure the survival of a business, it is essential to provide support during the first few years of
operation.

Experiments in monitoring businesses

The French CCIs have set up a scheme for monitoring new businesses as part of the “Enterprise in
France” network which consists of chambers of commerce, industry and trade, bankers, accountants,
mutual insurance societies, etc.

The purpose of this network is to ensure the survival of new businesses by facilitating access to
advice, finance, etc.

The Auvergne CCIs have also taken action to set up a monitoring system which consists in regularly
checking the key figures of each business. A computer spread-sheet will reveal the progress of the
business and, through the help of a technical adviser who will give him guidance, the business
manager can learn to make independent management decisions.

This scheme exists in other regions (CCI in Périgueux, Aquitaine) in the form of a Local Business
Start-Up Plan (PLAI).




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2.1.32.3 Conditions of application and transferability

Awareness

• Have an adequate pool of potential entrepreneurs
• Offer flexibility
• Provide frequent sessions
• Make these sessions more or less free for people setting up or taking over a business.

Starting up

• Address people with real projects (sector and location)
• Offer personally tailored training so that each trainee can apply the various techniques to his own
  project
• Offer training for no more than 10 to 15 people at a time
• Limit the duration of the courses to 300 hours at the most so that people can fit the course into
  their business planning stage
• Provide financial aid to cover the teaching costs incurred by training agencies
• Give an allowance to trainees not receiving any other pay.

Monitoring and support after the launch

• Obtain a commitment from the business owner
• Structure a partnership between business advisers
• Produce simple, practical monitoring aids
• Provide support with the establishment of monitoring tools by information sessions
• Use the help of technical advisers with both general skills and specialist management skills.

2.1.32.4 Contact:

Michèle Bernard (see page 10).
Jean-Luc Cauquil (see page 9).
Dr. Enrico Cozzio (voir page 9).
Nelly Perraud (see page 7).




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2.1.33 New technologies : Awareness-raising of sector application

2.1.33.1 Context

The Dyfed* Electronic Trading Network (DELTRAN) project was set up in south-west Wales
because there was an increasing recognition amongst public sector business support agencies that
there was a low uptake of ICT amongst local retailers, and that there was a general fear of new
technology at all levels.

*This local authority area has since changed as part of the reorganisation of local government in
Wales, although the project name has remained unchanged, to avoid client confusion.

Objectives of Project

   To improve the competitiveness of retailers.
   To raise awareness of the benefits of using ICT amongst retailers.
   To encourage a higher uptake of ICT amongst micro-businesses in rural areas.
   To provide retailers with expert advice and support in this area.
   To assist companies to access grants or soft loans to invest in technology.
   To create jobs

2.1.33.2 Best Practice

The project was established by the Electronic Commerce Centre of the Welsh Development Agency
(WDA), together with 2 local Enterprise Agencies (Antur Teifi and Pembrokeshire Business
Initiative) and the local authority, and aimed to promote the use of Electronic Commerce (E-Comm)
and Electronic Data Interchange (EDI) amongst micro-businesses in this rural area. Following local
government reorganisation in Wales, there are now three local authorities involved, namely
Carmarthenshire, Pembrokeshire and Ceredigion.

The project has been funded by European funds (ERDF Obj. 5b and Obj. 2) with match funding
coming from the WDA and its sister agency The Development Board for Rural Wales, who
contributed to the cost of a project officer.

Services included SME audits, drawing up individual Action Plans, assistance with implementation
including part-funding, telephone help-lines and on-going strategic support. A network of advisers
was recruited to enable site visits to the businesses. It was hoped that this programme would help
to counter the lack of innovation in products and services, the lack of new business opportunities,
and inefficient and ineffective business processes e.g. poor management information and stock
control.

2.1.33.3 Conditions of Application and Transferability

   Providing local access to impartial ICT advice, preferably with on-site visits to retailers’
   premises.
   Developing Centres of Expertise and Advice.
   Running Roadshows and marketing campaigns.




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   Providing a range of case studies, since businesses learn best from each other.
   Developing a simple ICT ‘toolkit’ for micro-businesses
   Assisting businesses to access soft loans and grants to enable businesses to purchase the right IT
   equipment.

2.1.33.4 Contact :

Betsan Caldwell (see page 9).
Dr. Enrico Cozzio (see page 9).

Morton Davies
DELTRAN
Carmarthenshire Enterprises
12 Queen Street
Carmarthen
Carmarthenshire SA31 1JT
Wales, UK
Tel: +44 (0)1267 236576
Fax: +44 (0)1267 238507




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2.1.34 Training retailers in new information technologies

2.1.34.1 Context

Nowadays, commercial enterprises - including small businesses - have to adopt the new information
technologies. Rural shop-keepers, with their low profitability and nervousness of new processes,
delay their investment and hence their access to new opportunities.

2.1.34.2 Best practice

Setting up a service to train, inform and assist those running small businesses in adapting to the
New Information and Communication Techniques [NICTs]. This experiment is being conducted by
the TERUEL chamber of commerce (Spain) where shop-keepers are shown the latest technology
suited to businesses and receive advice and training.

Aims:
• help shop-keepers to use NICTs
• give advice on the technologies best suited to the business (by an independent technical assistant
   specialising in business)
• demonstrate the possibilities offered by NICTs for obtaining information and products in a more
   cost-effective way
• expand the scope for finding new customers and increasing turnover
• provide access to data banks
• provide continuing training, specific to the sector and the size of business.

2.1.34.3 Conditions of application and transferability

•   Set up services to provide independent assistance, information and training for shop-keepers
•   Set up a local service, possibly mobile
•   Set up personalised advice
•   Individual support and a help-line are necessary to obtain the best results, solve problems and
    generate confidence
•   Continuous up-dating to take account of the latest innovations in telematics
•   Helping employees to adjust to new technologies.

2.1.34.4 Contact:

Dr. Enrico Cozzio (see page 9).
Guadalupe Martinez (see page 9).




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2.1.35 Consultation of Centres of Expertise
2.1.35.1 Context

Echangeur is the world's largest training centre and think-tank on new technologies for trade in
goods and services.

In a 2000 m2 centre in downtown Paris, Echangeur presents more than 300 constantly updated
demonstrations related to the latest e-commerce innovations. They are displayed on 6 thematic
platforms. The demonstrations, which include products from over 200 technology partners, bring
significant added value to Echangeur's training seminars and conferences.

ECHANGEUR was set up under a European-funded ESPRIT project by a consortium including
well-established retailers such as Carrefour, el Corte ingles, etc. because there was an increasing
recognition amongst retailers that there was a low uptake of ICT within the retailing sector, and that
there was a general fear of new technology at all levels.

The virtual Echangeur can be visited and contacted at: http://www.echangeur.fr

Objectives of project

   To improve the competitiveness of retailers
   To raise awareness of the benefits of using ICT amongst retailers
   To encourage a higher uptake of ICT amongst retailers
   To provide retailers with expert advice and support in this area
   To provide a showcase for a real touch-and-feel of new technologies

2.1.35.2 Best Practice

Echangeur is the reference point for all European retail players. It is also the laboratory, meeting
place and training location for understanding the future stakes of commerce. Its seminar and
conference areas welcome representatives of all types of commerce (from distribution to
convenience stores), along with representatives of the service industry, tourism, the credit and
industry sectors and their trade organisations.

Echangeur, through a variety of tools, enables European retail players to build strategies suited to all
types of trade in goods and services which have been affected by technological developments.

Further services include, for instance, seminars, newsletters, conference facilities, workshops, study
trips and a virtual guided tour.




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2.1.35.3 Conditions of application and transferability

•   Providing local showcases on a local basis, either fixed or mobile, for small and rural retailers
•   Offering Walk-in-Centres and Touch-and-feel sites for the managers of small and rural retailers
•   Developing a Centre of Expertise and Advice in the field of ICT (Information and
    Communication Technologies)
•   Providing a range of case studies, since businesses learn best from each other
•   Developing a simple ICT ‘toolkit’ for Retailers.

2.1.35.4 Contact :

Jürgen Habichler (see page 9).




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          Group projects for the modernisation of
                 commercial enterprises
Owing to the low density of population, businesses are generally small in size and therefore unable
individually to make the tangible and intangible investments necessary to remain competitive.

This is where group projects may permit economies of scale. In these cases, trade associations and
intermediaries such as shop-keepers' associations, chambers of commerce or development agencies
have to be able to play a full role.




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2.1.36 Support for groups of businesses

2.1.36.1 Context

Nowadays, cooperation between retailers is essential to the future of a business by making it more
competitive. However, forming groups and setting up networks of specialist businesses requires
logistical resources.

2.1.36.2 Best practice

The aid is provided in the region of Auvergne (France), financed by the State and the Region.
-   Recipients: limited companies, craft cooperatives or other forms of economic grouping
    (applications examined case by case on their economic merits)
-   Nature of the action: Two types of aid are available for setting up or developing these forms of
    group:
-   operating aid may be provided, declining over 3 years
-   investment aid
    The action programmes of these groups must in particular enhance the productivity of the
    businesses, devise a common commercial policy and, more generally, improve the various
    economic functions of each member business.

-   Financial aid:
-   operating aid: eligible expenditure is that directly connected with the programme and concerning
    administrative, commercial or advertising costs in particular.

                                        maximum %            Maximum subsidy
                                        subsidy              (EUR)
                    Year 1              60 %                 45 000 approx.
                    Year 2              40 %                 30 000 approx.
                    Year 3              20 %                 15 000 approx.

-   investment aid: the basis for assessing the subsidy comprises the whole of the investment
    programme minus expenditure on intangible items (goodwill, lease, etc.)
-   the aid must not exceed 25% of the cost of the investment excluding tax, subject to a maximum
    of EUR 45 000.

2.1.36.3 Conditions of application and transferability

Implementation by the local or regional authorities or government departments concerned.

2.1.36.4 Contact:

Michèle Bernard (see page 10).
Dr. Enrico Cozzio (see page 9).
Jean-Maurice Lathière (see page 7).




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2.1.37 The Commercial, Craft and Local Interest Grouping
2.1.37.1 Context

There are many federations of shop-keepers and craft workers whose activity is often in the
doldrums and does not always correspond to the needs of their members. These federations lack the
resources and medium or long-term vision to take consistent action which will promote local
activity.

Usually set up as a non-profit organisation, trade federations aim to:

• protect the material and legal interests of their members,
• encourage commercial activity and conduct promotion programmes for their particular business,
• represent their members in dealings with public authorities and government departments.

The number of trade federations registered in France is around 6000, with 3500 actually operating,
of which only a few hundred are particularly active.

As a rule, their material and financial resources are modest, and come mainly from subscriptions.

In addition to these subscriptions, there is the indirect revenue generated by occasional events or
business promotions.

Sometimes, contributions from municipal authorities, chambers of commerce or trade, and the
département boost their resources, but in most cases they are not enough to permit continuous,
large-scale campaigns to promote and protect local shops.

In this connection, while trade federations quite often have links with the municipal authority, the
relationship is generally limited to occasional consultation on questions of town planning, safety,
rents, liquidation, markets, local events or surveys.

Also, trade federations rarely have permanent staff.

The activity of the trade federation is very dependent on the time which its chairman and the few
active members working with him can willingly devote to the measures planned.

It is often difficult to convince shop-keepers and craft workers pursuing very diverse activities of the
benefits of taking joint action to promote businesses as such and develop the particular sector in
which they operate.

In general, trade federations do not think about the future of business and it is unusual for them to
have any overall plans for promoting local shops.




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2.1.37.2 Best practice

Observation of the weaknesses of traditional trade federations, the fact that, for a great many years,
there has been no new legislation in favour of groups of traders, and the urgent need to implement
more suitable tools designed for local shops, with greater resources and concessions enabling them
to play a part in their own development, have led to the creation of a new institution: the
“Commercial and Local Interest Grouping” [GICAC].

With the support of chambers of commerce and trade, the GICAC aims to organise a partnership
between the municipal authority and shop-keepers, craft workers and professional people, and to
promote and reinforce group action or measures in the general interest within an area defined
according to a cohesive focus of activity.

The partnership with the municipal authority takes the form of a cooperation charter, participation
by town councillors or the group’s management board, payment of an operating subsidy, and
consultation of the group on all matters concerning business, craft trades or services in the area in
question.

The aims of the GICAC

The GICAC aims to encourage the maintenance and development of the economic fabric of town
centres, urban districts, village centres etc. by:
• forming a group of economic players in the area defined: shop-keepers, craft workers and
   professionals
• a partnership arranged with the support of the organisations representing the interests of traders
   (chamber of commerce and industry and chamber of trade) between business people in the area
   defined and the municipality for the purpose of managing business areas as part of urban
   planning
• undertaking joint action, setting up common services for its members and taking part in creating
   facilities or amenities which will reinforce and promote businesses and services in the defined
   commercial area
• improving the range of products and services available
• thinking about the future of the area concerned.

Other objectives:
•   Propose a marketing strategy in favour of an action programme to revitalise the town or village
    centre.
•   Win support for such a project
•   Attract customers to town centre shops and retain their loyalty.




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The GICAC…
•   is an extension of the association of traders
•   runs a programme every three years
•   is an organisation
•   mobilises cofinancing
•   provides an operating method.

An operating method:
•   A permanent organiser: a paid officer who will be the link between the various partners,
    organise the various committees and ensure that all members respect the guidelines and rules
    adopted by the group
•   Specific training provided by the CCI: Window displays. Ambience. Quality drive, etc.
•   Permanent committees: Commercial town planning. Promotion. Communication. Commerce
    and the environment.

An organisation:
• A legal federation run by:
        • representatives of shop-keepers, craft workers and service providers
        • representatives of the local authority
        • one or more representatives of the CCIs and chamber of trade.

An agreement on partnership and objectives between:
• the town
• the chambers of commerce and trade
• the GICAC




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Example:


                GICC, GICAC, GROUP OF SHOP-KEEPERS AND CRAFT WORKERS
               AREA COVERED BY THE CCI OF ROCHEFORT-SAINTONGE (FRANCE)
                                 SITUATION AS AT 23/03/99



                          Date          Number of         Annual budget        Officer
                    of establishment     members            (francs)

SAINTES GICC        October 1996             170                   1 000 000      1

ST JEAN             May 1997                 55                     700 000       1
D’ANGELY GICC

ROYAN GICC          January 1998              200                  1 000 000      1
                                       (of whom 120 are
                                             CNS)

ROCHEFORT           November 1998            110                    800 000       1
GICC

SAINTONGE           April 1997                150                   600 000      ½
TRIANGLE                                (of whom 5 are
                                             CNS)

PONS GICC           July 1998                 72                    500 000      ½
                                        (of whom 5 are
                                             CNS)

MARENNES            July 1997                50                     400 000      ½
GICAC



2.1.37.3 Conditions of application and transferability

Success depends primarily on:

• The will-power of local players
• Establishment of a close partnership (by signing an agreement)
• A significant budget

2.1.37.4 Contact:

Jean-Luc Cauquil (see page 9).




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2.1.38 Voluntary chain: technical assistance agency

2.1.38.1 Context

The isolation suffered nowadays by retailers in rural areas, as regards management techniques,
methods of working, new trends in sales and purchasing, marketing, etc.

Combined with the lack of time to spend on learning and the lack of modernisation, this has led to a
degree of demotivation among shop-keepers, putting retailers at a competitive disadvantage in
relation to other much more modern, innovative and aggressive formats with greater technical and
human resources

2.1.38.2 Best practice

In Andalucia, as this problem concerns different aspects of performance, an inter-disciplinary
technical assistance agency has been set up, headed by the wholesale firm of González Cabello S.A.,
which aims to use experts in the various subjects to deal with all the problems arising. This
technical assistance agency has representatives from the following areas:

              -    logistics
              -    information technology
              -    marketing
              -    administration
              -    tax
              -    shop fitting.

This commercial best practice is being developed in the cleaning materials, toiletries, cosmetics and
food sector, but once the model has been developed the intention is to apply it to other sectors with
the sponsorship of the Andalucian Trade Promotion Institute.

Where logistics are concerned, it offers answers to all the problems arising in connection with the
provisioning of retailers, the possible rearrangement of merchandise in the shop, advice for retailers
on any subject relating to shop logistics and the inter-connection with the logistics of the
wholesaler/supplier.

As regards IT, a total management system has been developed for the sales outlet, capable of being
used for the overall management of the shop. The aim of this is to help the retailer to innovate and
adapt to the new methods of shop management. It also gives him a system of communication via the
Internet which cuts down on the work of up-dating and management, forming an integrated and
free-standing system of communication with the supplier, capable of meeting the current needs of
any shop, incorporating new management tools and creating sufficient interest to encourage the
exchange of ideas which the sector currently needs as regards the use of information systems.
In order to adopt this approach it is necessary to arrange co-ordination between the IT officer of the
technical assistance agency and the retailer in order to decide at what stage to begin and what level
of training is necessary for correct use of the technology.

As regards marketing, it is necessary to use the technical tools described above to define a change of
strategy which will make better use of the display space, the sales drive and the financial resources,
and finally make the range of goods better suited to what such a retailer is likely to be asked for.




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As regards administration and tax matters, the retailer is trained in modern management methods,
and given advice, support and training on everything necessary in order to adapt more effectively.
As far as possible the aim is also to channel the assistance available from the various local and
regional authorities.

As regards shop fitting, the aim is not only that all the changes required to meet modern standards of
shop design, attractiveness, etc. should be resolved in theory, but that the solutions should be put
into practice with the support of this team of people who take on the job of carrying out the
necessary work in collaboration with the retailer to remodel the physical appearance of the shop.

For the purpose of implementing this approach, a practical working method was created and
defined, applicable to any retailer requiring it, in a form which guarantees co-ordination between the
various members of the technical assistance agency and the retailer. Basically, the methodology
used is as follows:
               -   A working group is set up between the retailer and the assistance agency
                   identifying the various areas to be tackled and clearly specifying who is to carry
                   out the changes.
               -   This working party analyses the retailer’s current position and plans the various
                   possible alternatives and solutions, bearing in mind that all the proposals must be
                   practical and feasible.
               -   An action timetable is drawn up, taking account of three factors: implementation
                   of systems, investment and training.
               -   The proposed solution(s) is/are put into effect with both technical support and
                   training on site.
               -   The execution of the project is supervised until final completion.

This summarised method of working has created an up-dating model which gives priority to training
for action: as a result, not only does the retailer acquire the tools he needs to renovate his shop, but
he is also given advice and a practical start on all the improvements necessary to be able to compete
in the modern world.
For the purpose of implementing this approach, a non-profit economic interest grouping has been
established whose members are interested retailers and wholesalers in the sector; it has been very
well received by the members, who are reaping the benefits.




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2.1.38.3 Conditions of application and transferability.

To apply this commercial practice it is necessary to have somebody with sufficient financial and
human resources to act as project leader, capable of transferring know-how to the various retailers
who require it and have sufficient team spirit to set up the technical assistance agency.
It is also necessary to set up an association of the various commercial players concerned, both
wholesalers and retailers.

2.1.38.4 Contact:

Jose Luis Carus Gonzalez (see page 10).




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2.1.39 Voluntary chain: integrated management project

2.1.39.1 Context

Manuel Nunes & Fernandes was established as a wholesaler 22 years ago and was the pioneer of the
cash & carry system in Portugal. It sells mainly grocery, non-food products, beverages and fresh
products. Today it has six cash & carry outlets and employs 240 people. In 1997, Manuel Nunes
Cash & Carry achieved a sales figure of nearly ECU 70 million, which put the company in fourth
position in Portuguese wholesaling. The company’s main client is the traditional retail sector, which
represents 39% of sales (a percentage which has been decreasing in recent years, being offset by a
large increase in restaurants). Since the traditional retailer is the main client of MN&F, the company
decided to set up the GI - Gestao integrada - (Integrated Management) project (an EU pilot project).

2.1.39.2 Best practice

The GI Project supports the modernisation of traditional retailers - clients of the company - located
in the centre and south of Portugal, within a reasonable distance from the company’s outlets. The
ultimate objective of the company is to increase clients’ loyalty. It involves a variety of rural and
urban local stores, in markets with a wide range of population density (usually more than 5 000
inhabitants). The most relevant areas of action in the GI Project are:

•   use of a computer system;
•   store improvement;
•   management support;
•   development of marketing activities;
•   training;
•   financial support;
•   logistics (deliveries to the shops).

The members' obligations are in terms of image, assortment, management rules, contracts and of
course, loyalty. Their payback, apart from the overall support in the modernisation process, may be
summarised in terms of: improved purchasing conditions, exclusive promotion, marketing activities,
training and financial support. All the members of this project maintain their identity and
independence. Although they adopt the group’s insignia, they keep the store’s own name. Given the
Portuguese culture, in which most stores have a long tradition and the same name for years, this is
an important aspect in increasing retailers' motivation.

The GI Project has a department of information technology, responsible for the installation of
information system equipment, training and assistance; an architecture department, responsible for
monitoring the redesigning of stores; and a management department, responsible for general
training, the development of marketing activities, and training.

All the members may apply for financial support within the PROCOM Programme (funded by the
ERDF), which aims to help the modernisation of Portugal’s traditional commerce. The PROCOM
programme has many types of different support, which include, for a given period, interest rate
subsidies and, in some cases, the financing of part of the total investment (including IS, store
equipment, marketing activities, etc.).




                                                                                                  106
The GI staff is also responsible for drawing up the application itself, and monitoring the whole
process.

In terms of results, the GI project, which started operating at the end of 1995, already has 100 GI
stores and 20 Super GI stores and numbers increase every month. In terms of results, and as far as
members are concerned, we can say that in 95% of the stores this modernisation process has been a
success, with increased sales, more clients and improved service.

In terms of loyalty, as regards MN&F, members have concentrated their purchasing on the company
to an extent of over 60%, with some members reaching even a higher level of loyalty (around 70%
to 80%). As for GI members, the loyalty of their clients has also improved.

2.1.39.3 Conditions of application and transferability

- Must be in the context of a voluntary chain.
- Existence of a commerce modernisation scheme comparable to PROCOM.

2.1.39.4 Contact :

Sonia Nunes (see page 8).




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2.1.40 Modernisation of wholesalers: an intelligent approach and investment in
      logistical tools

2.1.40.1 Context

The future of rural shops depends on the professionalism of retailers, but the upstream supply
situation is also a factor.
Retailers must be able to obtain supplies on terms which enable them to offer consumers:
• a wider, higher quality range
• competitive prices no more than 15% higher than those charged by supermarkets
and still earn a decent living.

Wholesalers are the natural link between manufacturers and retailers: they supply the goods to the
retailers, give them time to pay and provide them with advice (product range, merchandising,
business management, etc.).

In France, as a direct consequence of the disappearance of local shops and the growing power of the
mass marketing organisations, many wholesalers have gone out of business (there are only five left
in the whole of the Massif Central).

Wholesalers are subject to many constraints:
• to increase their turnover and margins and secure the loyalty of their retailers, they have to offer
  a wide range. So they need to diversify, become “multi-line” wholesalers (groceries, drinks,
  cleaning products, cosmetics and toiletries, fresh products, frozen food, fruit and vegetables,
  etc.) and invest in suitable and increasingly sophisticated logistical facilities.
• their operating costs are high because of the logistical constraints imposed by delivering to small
  outlets in rural areas (low density of shops, small orders from retailers, vast range of goods,
  difficult access)
• wholesalers supply goods almost exclusively to small shops and cannot buy from manufacturers
  on the most competitive terms
• purely as a marketing strategy, manufacturers are constantly launching new products and
  creating consumer demand; wholesalers need to keep their range under constant review
• manufacturers sell in units which are not suited to the stock rotation of small shops; wholesalers
  have to repackage many products
• as small retailers do not have IT facilities, wholesalers need to have salesmen to take orders.
  This means that their sales staff cannot simultaneously act as advisers to retailers
• wholesalers have to contend with many bad debts.

Wholesalers therefore now face the same problems of profitability and survival as local shops in
rural areas.
The danger that all wholesalers could disappear will ultimately threaten the survival of outlets in
rural areas and also create the problem of a lack of competition between sources of supply.




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2.1.40.2 Best practice

A specific wholesaler modernisation drive has been conducted.
The aims are:
• in increase the motivation of wholesalers
• to modernise the logistics to provide a local quality service
• to offer a wide range in units suited to the stock rotation of retail shops
• to arrange optimum, profitable deliveries in order to cut costs
• to supply quality products at competitive prices
• to give retailers a better service
• to help ensure the survival of the source of supply which provides the best service for retailers in
   rural areas.

In the course of a study conducted in 1996, UCCIMAC and the commercial assistants of the CCIs to
which the wholesalers belong together arranged:
• round-table meetings of retailers and wholesalers so that all parties could explain their needs and
   constraints.
• working parties on the problems of supply, involving the wholesaler and an expert adviser on
   logistics.

Two wholesalers decided to go for investment (the financial arrangements were drawn up with the
help of UCCIMAC and the local CCIs):
• One built a new warehouse which became operational in January 1998. This is an appropriate,
   efficient logistical tool (cold rooms for fresh and frozen products, workshop for repackaging
   manufacturers’ sales units, etc.) which enables him to extend his range and improve the quality
   of his products and services while reducing stock levels. The total investment was
   EUR 1 100 000, with a 39% subsidy.
• The other is currently engaged in surveys to optimise his delivery rounds and thus cut the cost of
   this service, and to modernise his IT systems (order taking) to improve communication with his
   retailers. The Regional Counselling Aid Funds will pay 50% of the cost of the specialist
   consultants.

2.1.40.3 Conditions of application and transferability

•   Action involving all the operators in the supply chain (wholesalers and retailers)
•   Existence of an independent association with links in the field (CCI)
•   Wholesaler’s willingness to provide a quality service for small independent retailers
•   Wholesaler’s commitment to passing on logistical savings to small independent retailers




                                                                                                  109
• Financial aid is essential for research, training and investment
• Intense competition among mass marketing groups, particularly on selling prices, makes it
  difficult to achieve the target of a maximum 15% price differential for local shops.

2.1.40.4 Contact:

Dr. Enrico Cozzio (see page 9).
Jean-Paul Maisonnial (see page 8).




                                                                                        110
2.1.41 Wholesalers' grouping : common service for financing aid

2.1.41.1 Context

It is widely known that small businesses have great difficulty obtaining financial resources from the
market. These difficulties are even more marked in distribution. Clearly this situation creates many
problems for firms that have decided to develop and improve management processes and
distribution systems, since these decisions can only be put into practice by making investments. To
finance this process of modernisation, financial means are required that may be found on the capital
markets or on the money markets. However, only large companies can afford to obtain funding from
the capital market. Moreover, the financial institutions (banks, leasing companies, etc.) are not used
- especially in Europe - to supporting firms that are not able to give adequate property guarantees,
like small distributors.

2.1.41.2 Best practice

The creation of a special network of distributors can help small firms obtain access to the financial
markets. Clearly an aggregation of firms can be seen as an interesting potential market for financial
investors. Furthermore, aggregations create the conditions for increasing their contractual power by
negotiating special facilities regarding rates and grants and special initiatives with the banking
system. The network can function as a sort of commercial agent with the financial institutions,
making selections on the potential market (network associates) and suggesting businesses and
investments. Sometimes, the network can also give special guarantees to the banking system, thus
further increasing the above-mentioned negotiating power. In this case, the experience of CIS can
be a useful example. In fact, thanks to the possibility of centralised property guarantees and with the
negotiating power of more than 300 associated wholesalers, the network has, together with the
banking system, promoted many innovative financial products useful and convenient for the
associates, which they could not have obtained individually (see annex).

2.1.41.3 Conditions of application and transferability

This proposal requires some management and financial skills in order to implement the right
structure for the local markets. The advantages of the network could be so great for small
distributors that a demonstration of other successfully working activities should be sufficient to
promote aggregations. Regarding the specific benefits obtainable by the associates, it should be
necessary to analyse the financial and entrepreneurial position in the different situations.
Sometimes, in fact, it could be easier to create the network (in those countries culturally more
inclined to “mutualistic” and social systems), while in other cases it could be easier to make
arrangements with the banking system (Anglo-Saxon countries). In all circumstances the role of the
public institutions is very important, because it is clear that with their financial support these
initiatives could develop easily and also because they can provide a valuable contribution to the
local disseminating process.

2.1.41.4 Contact:

Roberto Vona (see page 8).




                                                                                                   111
ANNEX
LA CITTA
DELL'INGROSSO

                                                           Nola, 12      October 1998
                                                           To the proprietors of our MEMBER COMPANIES

SUBJECT: Agreements on the grant of finance to the members of C.I.S. S.p.A.

        We are able to inform you that the agreements made with Monte dei Paschi di Siena and with
the Banca di Roma are operational and C.I.S. has cleared all matters of procedure and documentation
with those institutions for activation of the operations.
        May we remind you that, under these agreements, C.I.S. members have access (within the
combined ceiling of 60 billion Lire provided by Banca di Roma and Monte dei Paschi) to finance on the
following terms:
Maximum amount allowable: up to 500 000 Lire per m2 of floor space, but no more than 800 000 000
Lire per member company.
Purpose: no specified use.
Term: 4 years (3+1 pre-depreciation). Use: as a single sum.
Interest: accruing and payable by quarters in arrears (at 31/3, 30/6, 30/9 and 31/12).
Rate: REBOR three-month bill + 1.25 percentage points.
Repayment: by equal quarterly instalments of capital in arrears starting from the second year.
Guarantee: pledge on title incorporating the lease contract or extension of any earlier pledge.
Late-payment interest: contractual rate plus 4 percentage points.
Undertakings by Bank: obligation not to ask members to apply for assurance of further guarantees
other than the surety given by C.I.S., at 50% of the finance.
Tax and expenses: withheld as a single sum from the capital when delivered, at 0.50%.
           This finance – which is in addition to any ordinary lines of credit already granted to members
– may be sought from Banca di Roma or from Monte dei Paschi di Siena through C.I.S., which is to
handle routing of applications and is to render assistance to members at all stages of the operations.
          Finance is to be granted at the sole discretion of the Banks, which have also undertaken to
notify the outcome of inquiries to C.I.S., subject to authorisation from the member for such notification.
          In order to proceed rapidly with these operations, we must ask members interested in the
scheme to send the attached application form to the offices of the C.I.S., duly initialled by their legal
representative and identifying the Bank through which they prefer the finance application to be
channelled. It will be for the C.I.S. to lodge applications and supporting documentation with the Bank,
which the C.I.S. reserves the right to choose at its sole discretion having regard to the funds available as
the operations progress.

Yours faithfully,

The Management

CIS (Centro Ingrosso Sviluppo Campania "Gianni Nappi” S.p.A.) -Tel. 0813 134 000 PBX Fax 0815 108 165 - Capital L. 49 302 792 000 fully
paid up - CCIAA 3051
 Trib. Na 797177 - Part. IVA 01316130630 - Registered Offices: Piazza N. Amore, 10, 80138 Napoli; Correspondence/Administrative Offices:
80035 Nola
                                                        www.cisnet.it - E-mail: info@cisnet.it




                                                                                                                                   112
                                                                   To
                                                                   C.I.S (Centro Ingrosso Sviluppo
                                                                   Campania "Gianni Nappi" S.p.A.)
                                                                   Administrative Offices
                                                                   80035 - NOLA (NA)

APPLICATION FOR FINANCE
under the agreements between C.I.S. S.p.A. / Banca di Roma / Monte dei Paschi di Siena

The company:
Company name:
Company capital:
Registered office:
Tax Number:
Companies Register:
party to lease contract No.: ..... ..................... for a unit of............. square metres
in the person of its legal representative
Having noted the Agreements with Banca di Roma S.p.A. and with Monte dei Paschi di Siena S.p.A. to
provide finance to the members of C.I.S. S.p.A., entirely accepting the content of those Agreements

APPLIES

for finance in the sum of Lire ...................... million subject to the terms of the agreements made by C.I.S.
S.p.A. with Banca di Roma and with Monte dei Paschi di Siena.
For this purpose declaring:

-   he is aware of the terms, details and conditions governing the finance available under those agreements;
-   he gives consent for all information regarding the finance arrangement to be notified by the Bank
    through C.I.S. S.p.A.;
-   that he authorises C.I.S. S.p.A. (if the Bank’s inquiries are successful), at the same time as the finance is
    granted, to take a pledge on the title incorporated in the lease contract.

He further requests that, subject to the funds available within the ceiling provided by each Institution, the
present application for finance be by preference lodged with the Bank (state Bank chosen):

Banca di Roma;
Monte dei Paschi di Siena

He also states that he is/is not already the subject of bank sureties to:
- Banca di Roma;
- Monte dei Paschi di Siena;
(mark with X, or state absence of sureties).




                                                                                                               113
He attaches the documentation following:
- Memorandum of association
- Articles
- Last three balance sheets and annexes (supplementary note, directors’ report, auditors’ report, minute of
   approval by meeting)
- Copy of Form 750n60 for the last three financial years
- Copy of VAT declarations for the last three financial years
- Single certificate of registration with Chamber of Commerce
- Copy of document of acknowledgement and tax number for directors
- Copy of document of acknowledgement and tax number for partners (only for s.n.c. partnerships)
- Detail of bank sureties (without showing use)
- Short-term (within year) financial and economic situation to recent date.

                                       Signature of legal representative




                                                                                                       114
2.1.42 Wholesalers' grouping : joint marketing support service

2.1.42.1 Context

Most of the main management problems regarding retailing and, consequently, wholesaling
businesses, are concentrated in marketing activities. Competition between the large-scale
distributors (specially in the grocery sector) is focused on pricing policy and promotion activities.
Consequently small retailers can not succeed in competing with a price differential too high to be
justified by consumers, even in less-favoured rural areas where service and proximity are of special
value.

2.1.42.2 Best practice

Wholesale networking can also give the associates the possibility of studying special promotions for
their customers, sometimes with the financial support of industrial suppliers, in order to offer price
advantages to support retailing activities. These initiatives have to be stable during the year and
focus on different kinds of goods. In this way, retailers know that in buying from the network it is
also possible to receive this important competitive support. The association can also produce a
general product catalogue (paper and “virtual” catalogue), selecting a special assortment, which is
properly marketed in order to develop distance-selling in less-favoured areas. Finally, networking
can provide great opportunities for implementing marketing research activities (generally too
expensive for single operators) for better monitoring of the retailers' needs and for matching
assortment, price and promotion policies to market trends. In these circumstances it is also possible
to refer to the best practices encountered by the CIS network. Each of them, in fact, has been
promoted and carried out over the years to the great satisfaction of the member wholesalers and
their customers. Promotions, in particular, in their different forms, are the preferred kind of
marketing investment of CIS wholesalers at the moment. And it is known that for promotions to be
attractive to customers, they have to be “substantial”; so the initiatives promoted by CIS could not
be taken individually or even by a small group of wholesalers (see example in annex).

2.1.42.3 Conditions of application and transferability

This proposal requires special marketing skills so that the right “product” is applied to the local
markets. The advantages of the network for small distributors are not easily perceptible, so a simple
demonstration of other successful activities is not sufficient to promote aggregations. As regards the
specific benefits for associates, the main difficulties concern the various competitive environments
and the non-homogeneous cultural backgrounds, especially in management styles. Sometimes, in
fact, it could be possible to create a network only dealing with promotion activities. In all cases, the
role of industrial suppliers and public institutions regarding financial support is very important and
could be fundamental in those circumstances where the “economic scale” of the initiative is
particularly large. It is also important for helping with the creation of the association mentality,
which is essential, and with the local dissemination policy.

2.1.42.4 Contact :

Dr. Enrico Cozzio (see page 9).
Roberto Vona (see page 8).




                                                                                                    115
ANNEX


TECHNICAL PLAN

                         “AT CIS, IF FORTUNE SMILES ON YOU,
                              YOU CAN WIN A FORTUNE”

Below are the details of the three-month promotion operation for all trades operating at our
Centre:

AREA COVERED BY COMPETITION:
The entire country

DURATION OF COMPETITION:
The operation will last for three months, from 21 September to 20 December 1998

PARTICIPANTS:
All traders buying from CIS.

DESCRIPTION OF OPERATION:
The basis of the promotion is the idea that it is profitable to buy at CIS because the customer
not only enjoys the usual benefits like choice, quality, price and service but can also win
thousands of prizes.

-   On purchases of goods worth 1 million Lire (exc. VAT) from one of the businesses on
    the CIS site, in one or more sessions during the week before the draw, the customer will
    get a white card to take part in the weekly draw for 144 prizes of (petrol voucher for
    100 000 Lire plus 1 Viacard for 50 000 Lire - total value of prizes 150 000 Lire).

-   On purchases of goods worth 3 million Lire (exc. VAT), in one or more sessions during
    the week before the draw, in addition to the white card, the customer will also get a red
    card to take part in the weekly draw for 16 purchase vouchers worth 1 million Lire (inc.
    VAT) each and 16 purchase vouchers worth 2 million Lire (inc. VAT) each that can be
    used at any outlet on the CIS site.

The customer only has to complete the competition card, clearly giving his own full name,
name and address of the outlet, telephone number and - most important - the number of the
bill as evidence of the purchase from any of the outlets. He must then put the completed card
into a box of the same colour at that of the card. There will be eight white boxes, for the
white cards - one at the mid-point of each of the islands at CIS (8 boxes for 8 islands). But
for the red cards there will be just one box placed at the exit from the centre.
The delegate of the Finance Ministry will make a draw each Monday at the CIS offices on
Island 4, on the following dates:




                                                                                            116
28 September 1998 (purchases in week                        21/9-27/9)
5 October        1998 (                                     28/9-4/10)
12 October       1998 (                                     5/10-1/10)
19 October       1998 (                                     12/10-18/10)
26 October       1998 (                                     19/10-25/10)
2 November       1998 (                                     26/10-30/10)
9 November       1998 (                                     2/11-8/11)
16 November 1998 (                                          9/11-15/11)
23 November 1998 (                                          16/11-22/11)
30 November 1998 (                                          23/11-29/11)
7 December       1998 (                                     30/11-6/12)
14 December 1998 (                                          7/12-13/12)
21 December 1998 (                                          14/12-20/12)
On each draw day 176 cards will be drawn (144 white and 32 red); since there are eight
white boxes, on each draw day 18 cards will be pulled from each white box.
Cards used in one draw will not be allowed in subsequent weekly draws.
There will also be three monthly prize draws open to both white and red cards; in particular:
- Cards collected from 21/9 to 18/10 will go into the draw on 19/10/1998
- Cards collected from 19/10 to 15/11 will go into the draw on 16/11/1998
- Cards collected from 16/11 to 13/12 will go into the draw on 14/12/1998
The eight prizes planned for each draw are as follows:
• Seven Fiat 600 cars
• One Alfa Romeo 156 car.

All cards, white and red, collected from 21 September to 20 December will also go into the
draw for the Final Super Prize of 150 million Lire in gold tokens, which will be on 21
December 1998.




                                                                                          117
Subject: CIS/LIABEL PROMOTION OPERATION – AUTUMN ’98

As you will already be aware, the CIS-LIABEL Promotional Operation will be starting from 15 October
next; here are the details:

TYPE OF PROMOTION:
Prize operation

AIM:
To promote purchases of LIABEL products at CIS during the promotion.

PERIOD:
Orders taken: 15 October to 30 November 1998
Products distributed to dealers: 15 October to 15 December 1998

PRODUCTS:
All Liabel regular underwear and outer-knitwear lines

PARTICIPATING CIS OUTLETS:
All CIS outlets distributing Liabel lines and joining the scheme.

BENEFICIARIES OF THE OPERATION:
All traders buying Liabel products during this period from distributors operating at CIS and taking part
in the operation.




                                                                                                    118
MACHINERY OF THE OPERATION:

• Each wholesaler in the CIS joining the operation will be given a sales target (in accordance with the
   cooperation and development target, i.e. 110% compared with the autumn/winter season of the year
   before, regular under + outerwear);
• When the event starts, each wholesaler will receive from Liabel a number of coupons according to
   the value of past sales this season (1 coupon = 100 000 Lire taxable Liabel);
• A number of ‘jolly’ coupons will be delivered (double quantity) according to the value of purchases
   of products in the ‘Caldo Abbraccio’ [=Warm Embrace] line;
• To get further coupons during the operation, the wholesaler must place re-stock orders not later than
   30 November;
All traders buying Liabel products in the period 15/10 to 15/12/98 from the CIS wholesalers
participating in the operation will be entitled to:
- a card for collecting points
- one 1-point coupon per 100 000 Lire (taxable) of products bought
- two 1-point ‘jolly’ coupons if the 100 000-Lire purchase is for products from the ‘Caldo Abbraccio’
line.
Five categories of prizes can be won by collecting coupons on the relevant card, as follows:

1-MILLION BAND (10 coupons):
- Girmi hand blender or Kodak photographic camera

3-MILLION BAND (30 coupons):
- Girmi Robot or Aiwa Stereo Radio-recorder

5-MILLION BAND (50 coupons):
   Irradio portable radio-recorder with CD or Altanus 6921/C Watch

10-MILLION BAND (100 coupons)
- Philips 14" colour TV or Siemens DECT cordless telephone

15-MILLION BAND (150 coupons)
    Mitsubishi MT35 GSM cellular telephone or Altanus 7564 steel Watch

Prizes cannot be rolled-over: if the trader collects a prize, he must start a new card to win further
prizes.
The point-collection card has to be filled in completely and all coupons must be stamped by the outlet
issuing them. Every card handed in must be supported by the relevant invoice: the operation is under the
control of the Revenue Office.
Winners are to collect prizes direct from the CIS distributors. Each CIS distributor is to hand CIS the
points cards for his own clients and the cards will be made available to a LIABEL representative for
checking before prizes are released. At the end of the operation CIS in collaboration with LIABEL will
conduct an analysis of the outcome of the promotion.

ADVERTISING FOR THE OPERATION:
  The scheme will be backed only with point-of-sale promotional material.




                                                                                                    119
TOTAL COST:
  Sales of approximately 4.5 billion Lire are expected during the period of the promotion.
  LIABEL is meeting all costs, against the sales targets agreed with each individual Member (on
  reaching the 110% target cooperation and development agreement, CIS will have no costs of its
  own)
  If at the end of the operation the CIS company has not reached the 110% sales target, it will
  contribute 20% of the cost of the prizes distributed by you (by means of a debit note/invoice to be
  offset using procedures to be established with the individual business participating in the operation).
  If this happens, the participating CIS businesses will contribute to cover the total cost of about 22
  million Lire, in proportion to the prizes distributed by each (sum equal to 20% of the value of prizes
  estimated, i.e. 0.5% of sales forecast).




                                                                                                     120
EXTRACT FROM RULES OF COMPETITION

From 21 September to 20 December 1998, the client is to be given a white card for every purchase
worth 1 million Lire (exc. VAT). In addition to these white cards, for every purchase worth 3 million
Lire (exc. VAT), the client is to be given a red card. All cards filled in with the full name and the name,
address and telephone number of the outlet where the purchase was made and the number of the invoice
as evidence of payment are to be posted in the boxes of the same colour placed on the islands and at the
exit from the Centre.
All white cards collected in the week before the date of the draw will be included in the weekly draw
for 144 prizes worth 150 000 Lire and consisting of a 100 000 Lire petrol coupon and a 50 000 Lire
Viacard. White cards included in one weekly draw cannot be included in subsequent draws.
All red cards collected in the week before the date of the draw will be included in the weekly draw for
16 purchase vouchers worth 1 million Lire (inc. VAT) and 16 purchase vouchers worth 2 million Lire
(inc. VAT). Red cards included in one weekly draw will not be included in subsequent draws.
In addition, all the white and red cards collected between 21/9 and 18/10 will be included in the
monthly draw on 19/10/98; those collected between 19/10 and 15/11 will be included in the monthly
draw on 16/11/98; and those collected between 16/11 and 13/12 will be included in the monthly draw
on 14/12/98. The prizes at each of these draws are seven Fiat 600s and one Alfa 156.
All white and red cards collected between 21/9/98 and 20/12/98 will be included in the Final Super
Prize draw, worth 150 000 000 Lire in gold tokens, which will be on 21/12/98.

The personal details given by participants in the competition will be used by CIS S.p.A.:
1.     for the purposes of this competition
2.     to send information and advertising material for promotional schemes and opinion surveys.
Under Article 13 of Law 675/1996, you may at any time and without charge consult, secure changes in,
have cancelled or object to the use of these details by writing or telephoning to CIS S.p.A. at Nola
(Naples) on (081) 3134000; Freephone 167 235744.

                                              [CIS logo]
                                     LA CITTA DELL’INGROSSO
                                       Telephone (081) 3134000
                                          Fax (081) 5108165


[r/h page]
                                                AT CIS
                                         IF FORTUNE SMILES
                                               ON YOU
                                            YOU CAN WIN
                                             A FORTUNE
                                              [CIS logo]




                                                                                                       121
                                 FORTUNE SMILES ON YOU AT CIS

[first box]
From 21 September to 20 December,
for 13 weeks, for every purchase
worth 1 million Lire (exc. VAT),
you will take part in the weekly
draw for 144 prizes worth
150 000 Lire, consisting of a petrol
voucher for 100 000 Lire and
a Viacard for 50 000 Lire.
                         [second box]
                         All white and red cards will take part in the three monthly draws,
                         each offering seven Fiat 600s and an Alfa 156.
[third box]
And again, from 21 September to 20 December,
for 13 weeks, for every purchase worth
3 million Lire (exc. VAT), you will take part
in the weekly draw for 16 purchase
vouchers worth 1 million Lire (inc. VAT)
and 16 purchase vouchers worth 2 million Lire
(inc. VAT), that you can use at any
outlet on the CIS site.
                         [fourth box]
                         And finally - all cards will take part in the grand draw on 21/12/98
                         with a FINAL SUPER PRIZE of 150 million Lire in gold tokens.




                                                                                                122
123
124
2.1.43 Overall drive to revitalise commerce and craft activity

2.1.43.1 Context

In an overall context of a number of villages in a rural area, commercial dynamism may tend to flag
and trade collapses because shops are reluctant to modernise and diversify. In such a situation of
general decline, global action is necessary. This is the approach developed by the Commerce and
Craft Activity Restructuring Programmes (ORAC) initiated by the French Ministry of Commerce
and Craft Trades in partnership with local operators.

These programmes aim to improve the general attractiveness and potential of commercial
businesses and craft activities in an area comprising two or three districts or a population of 15 to
25 000, by joint measures in favour of people in business and by the modernisation of business
premises.
Objectives
• To make rural centres more attractive by refurbishing shops and craft trade premises
• To improve conditions for small and medium-sized commercial and craft businesses
• To make craft workers and shop-keepers aware of the advice available
• To develop small-scale production by modernising the facilities
• To support craft activity and building by construction work.

2.1.43.2 Best practice

Orac begins with a 9-12 month “preparation” phase which includes:
• a general diagnosis of the area
• providing information and encouraging awareness among local operators, shop-keepers and
   craft workers
• implementing group measures to support trade and craft associations
• specific, suitable training, in groups and for individuals

Next comes the operating phase, which lasts about 18 months. Subsidies may be granted for:
• modernisation of craft workers’ and shop-keepers’ premises,
• acquisition of land and buildings, representing 25% of the programme eligible for subsidy
   (where businesses are taken over this is increased to 50%),
• acquisition of vehicles may be included if the need for a delivery round is demonstrated,
• possibly investment in production facilities incorporating new technology

ORAC forms part of a group action in which the contracting authority is a public authority, or a
chamber of commerce or trade.

The cumulative maximum for public loans is 50% for the preparatory phase and 80% for the
diagnosis. The maximum investment subsidy is between EUR 15 000 and EUR 150 000,
representing a maximum of 25% of the expenditure (rate varies between regions).




                                                                                                 125
2.1.43.3 Conditions of application and transferability

•   Existing institutional framework is essential
•   Dynamism and organisation on the ground
•   Local enthusiasm

2.1.43.4 Contact:

Michèle Bernard (see page 10).
Jean-Luc Cauquil (see page 9).
Jean-Maurice Lathière (see page 7)
Jean-Paul Maisonnial (see page 8).
Nelly Perraud (see page 7).




                                                         126
2.1.44 A quality scheme suitable for shops

2.1.44.1 Context

Local shops have been undergoing profound changes for a number of years, owing to two main
factors: the extension and concentration of mass marketing and changes in consumers’ shopping
habits. This state of affairs is even more noticeable in rural areas owing to the sharp decline in the
population and the resulting greater vulnerability of traditional shopping facilities.

On the lines of the “organised” trade, in order to be successful in meeting this new challenge, local
shops must also do everything possible to tempt and reassure consumers and secure their loyalty.
This is particularly difficult in rural areas because shops are scattered, and there is a lack of
information, means of comparison or references, and an absence of imitation stimulated by
competition: in short, the effects of isolation are an additional factor hampering the quality
approach.

In France a working party organised by UCCIMAC and consisting of shop-keepers and commercial
assistants from the local CCIs started discussions in 1995 on quality in shops. The quality drive is
meant to enable the shop-keeper to adapt his facilities and define his commercial strategy.
Objectives
• to make customer satisfaction a central concern for the shop-keeper
• to help each shop-keeper obtain a better idea of what customers want
• to help the shop-keeper to compare how he views his range of goods with the view taken by
   consumers
• to encourage questions and help people to change their attitudes
• to encourage a process of change, progress and constant adjustment of the range offered
• to propose and then institute a method and tools which enable every shop-keeper to define his
   business policy himself and to present a distinctive image compared to the “organised” trade
• to encourage the shop-keeper to become more professional and undergo training
• to set up groups of well-motivated shop-keepers, as future examples for their colleagues
• to include these measures in the early stages of programmes for revitalising and restructuring
   shopping facilities.

2.1.44.2 Best practice

An original “quality” scheme suited to local shops was therefore devised by UCCIMAC with the
technical support of the French Quality Movement (MFQ). It was tried out successfully in 1997
with an initial group of 12 volunteer shop-keepers from the ROANNAIS CCI. This test group
consisted of people running businesses in various commercial and service sectors (food, clothing,
hairdressing, photography, etc.).

Based on the consumer’s point of view, this scheme adopts the same rigorous step-by-step approach
as is applied in industry; it allows each business to proceed at its own pace, setting its own progress
targets. It goes beyond merely creating awareness and conducting marketing drives (label, charter).

In 1998, in parallel with this experiment, UCCIMAC devised a transferable methodology: “Quality,
a vital source of energy for Commerce”. It also had to obtain essential financial support. With the
help of the Massif Central Planning and Economic Development Board, UCCIMAC was able to go




                                                                                                   127
ahead. In 1998, eight CCIs in the Massif Central decided to implement this programme with their
members (130 shop-keepers).

UCCIMAC therefore devised a methodology and decision-making tools for the business owner.
Each local CCI is adopting the scheme, which has a six-stage structure. The essential points are as
follows:
• The scheme alternates individual work by each business owner with group discussions held in a
   “shop quality club” comprising around 15 volunteer shop-keepers.
• It is constructed around a “sales outlet observation grid” which follows the consumer from the
   time of thinking about the purchase at home to making the purchase and using the after-sales
   service. This is a 151 point reference system which makes it possible to review all the parameters
   of the shop-keeper/consumer relationship: (people, products/services, sales outlet and ambience,
   communication).
• This detailed diagnosis of the sales outlet is made by people posing as customers, specialist
   consultants who present themselves to the shop-keepers as customers and observe them as if they
   were well-informed consumers
• One of these “mystery customers” hands over the results of his observations and then helps the
   shop-keeper to start thinking about things with the help of the grid setting out the quality defects
   in order of importance.
• The CCI’s commercial assistants train and supervise the “mystery customers” , then help each
   shop-keeper to devise his action plan with the help of the grid setting out actions/resolutions on
   quality defects. Their role of providing shop-keepers with both individual and group co-
   ordination, organisation and monitoring is vital, particularly in terms of monitoring attitudes.
• The whole process takes about a year.

Owing to this rigorous approach and the work on fundamental issues, the scheme demands a
substantial investment of human and financial resources. The total cost of this project is around
EUR 3 700 per shop, namely:
• Diagnosis and guidance by the “mystery customer” consultant: 1 850
• Promotion, co-ordination, organisation and individual monitoring by the CCI: 1 850
A financial dossier was produced. This made it possible to obtain ERDF Objective 5b aid which
gives an 80% subsidy for the consultant’s services, the remaining 20% being paid by the business.
Players
The main players are the CCI (or any other development body), the consultant who offers guidance
and the shop-keeper.

Impact on local development
• Contributes to the survival of shops and therefore jobs
• Improves shopping facilities
• Improves the range of goods and services available for local residents and tourists
• Creates a positive dynamism.

2.1.44.3 Conditions of application and transferability

• Scheme based on volunteers and learning by example
• If the shop owner sticks to the scheme, the right action will be taken. He may then wish to
  display a certificate subsequently, but that is a highly individual decision
• According a “label” does not guarantee a fundamental change in the shop-keeper’s policy




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• Permits theoretical work before appropriate action is considered and implemented
• Participation by the spouse and/or employees of the business is highly desirable but difficult
• Existence of a local public agency specialising in “organisation” and aware of the specific
  practical and psychological constraints on local shop-keepers
• An inter-regional public agency permits economies of scale and an improved methodology by
  comparing local projects, leading to better transferability
• Need for strong support by public authorities in the form of financial aid for all stages in the
  scheme.

2.1.44.4 Contact:

Jean-Paul Maisonnial (voir page 8).




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2.1.45 Support for commercial services - government subsidies for training and
      the development of rural services

2.1.45.1 Context

Large areas of Sweden have an extremely low population density. Both State and Regional
Governments bear the responsibility of providing an acceptable level of retail food and merchandise
availability to consumers in rural areas. In sparsely populated tracts this is no easy task to fulfil.
Long distances and small delivery orders increase the costs of transporting goods to countryside
retailers. Delivery charges and higher wholesale prices for small orders mean that rural retailers pay
more for their goods. This higher cost is, in part, passed on to consumers.
These special problems related to the distribution of goods have led to a state standard for
assistance, to ensure the survival of the retail service for food and household essentials. This
standard is quite unique in Europe.

The assistance which can be obtained for maintaining a food and grocery service in rural and
sparsely populated areas is for the benefit of consumers living near the country shop. There are
special priorities and restrictions for this assistance based on demographic figures.

Many shop-owners - and their employees - do not have enough theoretical and practical knowledge
in business methods and the economy to effectively meet the demands of their customers. Great
efforts have therefore been made to raise their level of competence through the availability of
educational and training programmes provided by “The Association for the Furtherance of
Countryside Food Retailers” (Föreningen Landsbygdshandelns Främjande) FLF, and by the
wholesale organisations.

2.1.45.2 Best practice

Assistance for commercial services is granted in the form of investment subsidies, service subsidies
and reimbursement for home deliveries to elderly and handicapped rural residents.
These subsidies may be granted to the last remaining store in a village on the condition that it lies at
least 10 km from the next nearest alternative store selling food and daily commodities. Another
condition is that the store is judged to be of importance from the service standpoint and that an
alternative to this service cannot be arranged at less expense.

Investment subsidies

Investment subsidies can be granted for up to 50% for investments in equipment, furnishing,
remodelling or new construction.
For shops providing, or wishing to provide, a multi-service concept with at least five out of six
approved services, investment subsidies up to 85% may be granted.
Assistance in the form of write-off loans of up to 85% can also be granted for construction
necessary to permit a broadening of the services offered.




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Investment subsidies are available for creating long-term plans for improvement measures. 85% of
the costs of hiring a consultant, as well as other expenses incurred in creating a plan, may be
covered. The plan should include an analysis of problems, the improvement measures to be taken, a
time frame for implementation and a plan for the monitoring and review of improvement measures.
A written report must be sent to the County Administrative Board.

Investment assistance in the form of investment subsidies may also be granted for up to 50% of the
costs for training and instruction to increase competence among store owners and employees in
country shops. Costs for travel, food, lodging and instructors´ fees may be subsidised, as well as
salaries to the employees participating in the course.

Service subsidies

Assistance is given temporarily to food retailers located within eligible areas who are in acute
economic situations. Maximum assistance is 22 500 . Service subsidies may be granted no longer
than three years in a row.

Responsibility rests with the County Administrative Board

All of the above-mentioned assistance programmes are administered by the County Administrative
Board. Prior to reaching a decision the board is required to consult with local authorities and
retailers' associations. Their views are of great importance in making an assessment.
The local authorities must have a plan for retail food distribution in their districts. These plans serve
as a basis for judging the importance of individual shops for future availability of food and
necessities.

Home-delivery subsidies

Home-delivery service may be offered to handicapped, infirm or elderly persons who are unable to
do their own shopping. This subsidy is administered by the rural district. Those local authorities
having a plan for retail food distribution may receive a state subsidy to cover 50% of the actual costs
for home deliveries. At present, the state pays up to 5 per home delivery, which means that the
rural district can pay 10 to a shop for each delivery. At present, each such delivery actually costs
10.3, on average.
State and district subsidies for home-delivery in 1997 were paid to approximately 850 shops, who
delivered goods to about 20 000 households.

Effect of government support

The closing rate of shops that received subsides in the years 1993–1996 is only half as big as that of
comparable shops not receiving any subsidy. In a period of five years of government support a total
  34 million was granted to shops in 1 000 small villages. Thanks to this, the service has been
maintained or even improved for the nearly 700 000 people for whom these shops are the closest
shop.




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2.1.45.3 Conditions of application and transferability

Compatibility with local context.

2.1.45.4 Contact :

Dr. Enrico Cozzio (see page 9).
Leif Larsson (see page 10).




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2.1.46 Reciprocal guarantee societies suited to commerce

2.1.46.1 Context

The access of SMEs (small and medium-sized enterprises) to sources of external financing,
basically banks and credit institutions, is subject to the presentation of adequate, genuine
guarantees demanded by the financial institutions for the granting of loans and funding.
Commercial PYMES, do not, in general, have property of any significant value or fixed assets
to offer as a guarantee; in general, the value of a commercial company is limited to its
commercial funds, i.e. to the range of products offered, the quality of the staff, the quality of
the after-sales service, etc. For this reason, financial institutions are often reticent about
granting credit requested by such companies. In cases where financial institutions do grant the
loans or credit applied for by PYMES, the main problem is the large cost borne by the
companies as a result of the additional guarantees demanded by the finance companies.

2.1.46.2 Best practice

The formulae offered to entrepreneurs by the Administration to reduce such costs include
promoting SGR (Reciprocal Guarantee Societies).

With this formula it is intended to underwrite transactions made by participant partners in the
execution of their business activities through an S.G.R. The functions carried out by Asturgar
(Reciprocal Guarantee Society of Asturias) are as follows:

              - to increase the guarantees of Asturian PYMES
              - to reduce the cost of bank financing
              - sureties and technical guarantees
              - to facilitate procedures and the reduction of instalments
              - to offer constant and up-to-date information

To be in a position to apply for a guarantee the PYME must become a member of
Asturgar by subscription and payment of a company share for the sum of 300. If the
guarantee applied for is approved by the Administration Board of Asturgar, the PYME must
increase the capital subscribed to cover 2% of the guarantee approved ( 300* for every
 15 000 ), in the case of financing guarantees, and 1% ( 300 for every 30 000) in the case
of technical guarantees.

Any member who does not have a guarantee may withdraw the capital deposited by giving three
months' prior notification.




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The guarantees may be divided into two main groups:

Financing Guarantees

The two objectives of these guarantees are as follows:

- to complete the guarantees of the companies, allowing them to have access to the
financing needed.
- to obtain financing under very competitive conditions, as regards both terms and cost. This
is achieved through the negotiations of the SGR, which, acting like a large shopping centre,
obtains concessions from the financing companies.

Types of transactions: Loans, credit, assets/goods discounts.

Technical Guarantees:
These guarantees allow companies to comply with the requirements of organisations, large
companies, etc., regarding the risk involved in certain projects or the provision of services.

Types of transaction: Invitations to tender and auctions, project and installation guarantees,
deposit substitutions or deductions, etc.

2.1.46.3 Conditions of application and transferability

To promote the participation of businessmen in SGRs, by:

- raising the awareness of agent companies to the existence of these Guarantee Societies.
- facilitating the loan procedures through the Society through economic agents and companies.
- providing information concerning the workings of these Societies through the media.

2.1.46.4 Contact :

Jose Luis Carus Gonzalez (see page 10).




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2.1.47 The financing intervention of the Local and Regional Authorities in
      Spain

2.1.47.1 Context

Access to financing is of vital importance for all companies and for the commerce sector in
particular. Commercial SMEs suffer a big disadvantage when it comes to obtaining adequate
financing for their needs. In general, when faced with the impossible task of self-financing, they
must resort to external sources of financing. Owing to their limited size, they need direct access
to the capital market and have to depend to a great extent on bank financing, where financing
costs are usually high.

One of the main problems for commercial SMEs, from a financing point of view, is derived
from having an inadequate financing structure. In this sense, the characteristic lack of
resources of small companies, especially small traditional businesses, and SMEs, is made worse
by the lack of long-term financing. They therefore have to resort to a high rate of debt in the
short term, which causes a strong imbalance and great uncertainty.

To offset this problem it is necessary to negotiate with the public authorities for a series of
measures which would contribute to the adequate financing of small businesses, such as:

- help in reducing the financing cost for SME investment.
- non-recoverable subsidies/grants.

2.1.47.2 Best practice

The administration of the Principado de Asturias, through the (regional) Ministry of the Economy,
has set up a series of measures designed to help the financing of commercial SMEs. These
measures take the form of subsidies/grants at established rates of interest from the financing
companies through investment loans and non-recoverable subsidies/grants.

Aid in reducing the financing costs of PYME investment loans

The (regional) Ministry of Economic Affairs provides the possibility for this kind of aid with
the intention of subsidising part of the interest on loans for financing company investment.

Commercial PYMES may be beneficiaries of this aid according to European Union rules.

Technical, economic and financial viability of the projects and positive effects on employment are
among the requirements. In certain exceptional cases investments made in the six months prior to
the application for the subsidy may be included and may be considered formal subsidy loans within
the three month period prior to the application, provided the required conditions are complied with.




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The aid will consist of a maximum allowance with a six point rate of interest, 70% of the incentive
investment being the maximum subsidisable loan. If the loan is guaranteed by an SGR there will
be an additional allowance with a one point rate of interest. The commission allowance of
the guarantee will be up to 1% of the annual current risk and the possibility of a second guarantee
up to 50% of the principal.

The aid allowance will be processed once proof has been provided of implementation of the project.
The maximum period for formalising the loan will be six months from the date of notification of
the award of the subsidy.

Direct investment aid

The (regional) Ministry of Economic Affairs provides the possibility for this kind of aid with
the intention of subsidising investments relating to:

              - the creation of new companies.
              - expansion, modernisation and relocation of companies.
              - general improvement in company quality and competitiveness.

Commercial SMEs may be beneficiaries of this aid according to European Union rules.

Requirements:

- Technical, economic and financial viability of the projects and positive effects on
employment.
- Minimum incentive investment of 12 000*.
- Maximum incentive investment of 450 000.
- In the case of projects exceeding 150 000, the company's own funds must provide an amount
equal to at least 30% of the incentive investment project.
- The subsidy application must be made prior to the commencement of the investment.
- Assets financed by Leasing will not be considered subject to incentive.

The aid will consist of a maximum non-recoverable subsidy of 50% of the investment
subject to incentive.

The aid allowance will be processed when proof is provided of project implementation.

2.1.47.3 Conditions of application and transferability

- Raise the awareness of agent companies to the existence of aid, especially the financing of entities
closest to the sector.
- Inform businesses as to the aid most appropriate to their project.
- Facilitate businesses in the processing of this aid through associations, Cámera de Comercio, local
development agencies, etc.
- Speed-up the aid process in both in the award and payment stages.




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- Provide, through the media, information on the range of aid available in the different public
administrations, as well as specific addresses of places where additional/related information may be
obtained.
- Establish higher subsidy percentages for those established entrepreneurs in rural areas
suffering shortages.

2.1.47.4 Contact:

Jose Luis Carus Gonzalez (see page 10).
Dr. Enrico Cozzio (see page 9).




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2.1.48 Transferring small commercial businesses

2.1.48.1 Context

The transfer of small commercial businesses has become a priority issue. If businesses are taken
over, the survival rate is higher than for businesses starting from scratch, so that existing jobs can be
preserved and new ones created.

However, over the past ten years or so, many existing businesses have disappeared because there
was no-one to take them on.

The shortage of takers is due to various reasons:
- the operator realises too late that he needs to get organised if he is to assign his business
- the haphazard arrangements for informing the general public of businesses for sale
- over-estimate of the value of the goodwill to be passed on.

To curb this problem, it is essential to take measures aimed at:
- raising the awareness of people handing over and taking on businesses and providing them with
  guidance
- helping to determine a fair price, so that businesses can be handed over faster and more securely
- promoting sale offers.

In France, in view of their local presence and their public service function, the CCIs, like the
chambers of trade, have a right to concern themselves with the transfer of businesses.

However, to gain a better idea of the transfer market and offer specialist advice for people handing
over or taking on a business, it is very much in the interests of the CCIs and chambers of trade to
contact some of the professions inevitably involved in the transfer of businesses (notaries, estate
agents, accountants, etc.).

2.1.48.2 Best practice

Back in 1985, in response to a worrying situation - 300 shops lost each year - notaries, estate agents
and CCIs established the “Transcommerce” scheme.

The aim of this scheme is to facilitate the transfer of shops and hotels, especially in rural areas, and
thus to encourage regional development. Its main functions are:
- to overcome the isolation of owners faced with handing over their business;
- to collect and circulate information on businesses for sale;
- to increase the awareness of vendors and buyers, giving them information, advice and guidance;
- to organise the network of member notaries and estate agents;
- to act as observer during the transfer.

This scheme covers the entire process of support for the transfer:




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Business Opportunities Exchange

The “Transcommerce” network collects information on businesses for sale and circulates it free of
charge to potential buyers, CCIs, chambers of trade, notaries, estate agents, accountants, banks,
national employment agency, vocational training bodies, local and regional authorities and socio-
economic institutions, etc.

There are several channels through which these offers are promoted: monthly advertising journals,
Minitel (3616 TCOM, 1.29 francs/mn), Internet site (www. transcommerce.com).

At the same time, the particulars of potential buyers and the details of what they are looking for are
collected and circulated on a form common to the whole network and reserved for Transcommerce
members (notaries, estate agents and CCIs).

Support measures aimed at raising the awareness of vendors and buyers and providing them
with guidance and advice Actions

- CCI Help Desk: Technical Advisers are available to answer questions from vendors and buyers.

-“Practical Guide on Selling a Business”: a document telling vendors about ways of assigning their
business, the legal, tax and social implications, and the various methods of valuation.

-“How to take over a business”: a publication intended for people planning to go into a business, to
help them with setting it up or taking it over.

-“Diagnosis of the business for sale”, designed for vendors, this document specifies the condition of
the premises and equipment and the commercial and financial characteristics, leading to an
objective appraisal after analysis of the strengths and weaknesses, and to application of various
methods of valuation.

-“Business selling price observatory”: continuous analysis of sales, making it possible to produce
surveys by activity and by geographical area, and providing an idea of the transfer market.

This scheme was made possible by the number of businesses located in the Auvergne region
(12 000 shops - need for a minimum critical size).

The budget for such a project is EUR 230 000, part being used to finance communication and the
operation of the business opportunities exchange (staff, advertising journals, Internet site and
telematic service) and part to pay for support tools and measures. This scheme received financial aid
from the funds of the State/Regional Planning Contract and FISAC (aid paid by the State).

Other departments or regions have joined the Auvergne network. Today, there is a Transcommerce
network in 15 French departments. In the Auvergne region the project was extended to craft
activities (Transartisanat) in 1996.

2.1.48.3 Conditions of application and transferability

• Choose an organisation to take charge of running the network, updating the information and
  arranging communication.




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• Establish a partnership of professionals and/or technical advisers who can guide and support
  business vendors and buyers.

• Centralise information on businesses for sale by working in partnership with local parties
  involved in transfers.

• Avoid adding to the number of circulation media and develop links between the various existing
  networks.

• Use all the existing means of promotion, from paper to multi-media.

• Offer vendors a service providing assistance with valuing their business, to help them determine
  the “right price” for the shop.

• Publicise the scheme by using communication tools and measures so that the network becomes
  the essential contact for vendors and buyers.

The partners in the Transcommerce network want to strengthen and develop new partnerships,
become involved in implementing an inter-regional network in France, or even in Europe, and also
exchange ideas and experience with other countries for the purpose of introducing new aids to the
transfer of businesses.

2.1.48.4 Contact:

Michèle Bernard (see page 10).




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2.1.49 Smart loyalty cards

2.1.49.1 Context

A loyalty system based on a card can assist the retailer to develop many things that are important
and valuable to customers. A buying pattern can be created for the customer, that will help keep the
customer loyal to the store, since one of the main problems in the retail business is customers
buying in different stores. The customer only goes to the store when there is a special offer
advertised. So if the loyalty system is loaded with things like a saving account, better interest than
the bank and good special offers for the customer, he or she will spend more money in the store. As
a result, a personal relationship can be established with each customer.

Objectives of Project

•   Increase Customer loyalty
•   Increase turnover
•   Secure payment
•   To obtain funding
•   Identify customer spending patterns

2.1.49.2 Best Practice

ICA Loyalty System:
The card launched within the ICA Company had an enormous impact on the retailers in Sweden.
The ICA card is both a payment card and a loyalty card, and there are two kinds of payment card – a
credit card and a debit card. Some customers use the card only for collecting discounts in the ICA
store, and not for payment. Customers put money in advance into the debit card. The payment card
gives customers a very good interest rate, currently 4% compared with 0.25% by Swedish banks.

Every cardholder gets a letter every month with the balance of the account. The retailer has an
option to write a personal letter to the customer every month. There are a lot of different campaigns
that can be presented to the customers in the letter. The more loyal the customer is, the better the
offer he or she gets from the ICA retailer. In Sweden today there are 2.3 million cards in a market of
9 million people. Today 23 % of ICA`s turnover is paid by the ICA card. A very important thing is
to be the market leader with loyalty systems, since others who follow will always be second in the
market.

Federazione Trentina delle Cooperative:
The Loyalty Card project of the Cooperazione di Consumo Trentina was launched on 19 September
1997 and is directed at the Famiglie Cooperative operating in the Province of Trento (Italy) and
their partners (33 000 people out of a total province population of 400 000). This card is not
available to the general public.




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Federazione Trentina delle Co-operative is in charge of the project and supplies the associated
Famiglie Co-operative with the required tools to operate: computer software, manuals, pre-printed
forms, consultancy, etc. The project is implemented together with Casse Rurali della Provincia di
Trento, the banking arm of Movimento della Cooperazione Trentina, thus achieving an effective
integrated result .

The following are some of the goals of the project :
•   To create an easily identifiable tool for the partners to assist social activities and create a sense
    of belonging to the movement
•   To develop a direct bank payment system that debits the partner’s bank account that has been
    opened with a Cassa Rurale del Movimento della Cooperazione Trentina. This is a simple
    system that allows the customer to purchase goods without having to pay cash; likewise it is not
    a system linked to any type of credit card.
•   To develop a system to calculate and pay the customer’s commission through promotions that
    encourage brand loyalty towards the retail shops concerned.
•   To assist the free movement of the partners vis-à-vis the choice of the shops they need. The
    loyalty card can be utilised in all the associated retail shops. The partners who live in a small
    village can do their daily shopping at the local corner shop. They would not lose any benefit
    when shopping at a larger store for less common merchandise while benefiting at the same time
    from the larger shop’s greater assortment of goods and perhaps more competitive prices.
•   To check the purchases of the individual partners to be able to credit the year end commission to
    their accounts.

2.1.49.3 Conditions of application and transferability

Legislation must allow competition with saving banks. There may be different tax issues in different
countries to consider. Technology issues can be very important in the running of the system.
Consideration also has to be given to the questions of how open people are to using different cards
and the collection by companies of personal data.

2.1.49.4 Contact :

Dr. Enrico Cozzio (see page 9).
Olof Jarnesjö (see page 9).




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2.1.50 Common advertising campaigns

2.1.50.1 Context

Small retailers usually have problems with advertising, since it can be expensive for them. By
cooperating with other retailers or becoming part of a big company, small retailers can work
together and save resources. Advertising campaigns can cost a lot of money, but by networking the
cost is shared and therefore reduced.

Objectives of the Project

    Having more advertisements in the market
    Raising the quality of campaigns
    Getting more customers into the stores
    Raising turnover
    Benchmarking ideas in advertising

2.1.50.2 Best Practice

In Sweden, the ICA company does a lot of work with common advertising campaigns, on national,
regional and local levels. Retailers working together within the ICA company can get very good
deals with newspapers and TV channels in advertising.

When it comes to small retailers they often use flyers for their campaigns, and they can use ideas
from all over Sweden that are provided for them at benchmarking meetings. In this way small
retailers can be seen in local markets as well as the biggest stores. In Sweden ICA has long
experience of helping small retailers work together, especially in local advertising.

Federazione Trentina delle Co-operative, Trento, Italy, has also tried to use modern communication
methods with the customer-partners of Famiglie Co-operative to set up information campaigns.
Their main objective was to spread awareness of the communal values that are at the base of the
cooperation movement. This, in turn, allows the partners to work in small villages as well, with
pride and dignity.

Information Technology has come a long way in the last few years and has brought with it a real
revolution in the way communication is perceived. Movimento della Cooperazione Trentina has
implemented their own networking plans which include the following:

•   Implementation of e-mail facilities, which allow speed and efficiency in the distribution of
    correspondence, memos etc., while at the same time saving money in postage and the cost of
    floppy disks.

•   Creation of Web sites. The external site was standardised, and a level of integration agreed for
    common contents, within certain limitations. Documents and indices were standardised on the
    intranet.

•   Professional services are also offered through the network, such as personalised consultancy
    services via e-mail, financial and accounting services (i.e. bookkeeping, management accounts,
    tax declarations, printing of pay-slips, etc.).




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•   Agreement to create a monitoring system of the Movimento Cooperativo to collect updated data
    for the cooperatives and their financial results. Common accounting software specifications
    were agreed, together with data update frequency and verification criteria.

2.1.50.3 Conditions of application and transferability

    Create groups of small retailers or customers-partners
    Join big groups of retailers or customers-partners
    Create groups in small towns
    Benchmark different groups of retailers.

2.1.50.4 Contact :

Dr. Enrico Cozzio (see page 9).
Olof Jarnesjö (see page 9).




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2.1.51 Cooperative for the sale of local produce

2.1.51.1 Context

This project was set-up as part of a LEADER I programme in the Teifi Valley in West Wales, where
resources from the public and private sector have come together to boost the local economy and lay
foundations for increased prosperity in the area.

Cegin Cymru (Welsh Kitchen) aims to address a long-standing problem in the modern Welsh
economy, where customers often find it easier to buy imported food than local produce because of
the distribution problems faced by small independant producers. They tend to try to sell at the ‘farm
gate’ or use wholesalers if producing at sufficient volume. The former method is haphazard to say
the least, and relies on passing trade or tourists, and the latter method cuts down on profits because
of the cut taken by the wholesaler.

Objectives of Project

   Finding new markets for local produce, both locally and throughout Wales.
   Assisting in overcoming problems of seasonality, location and structure
   Implementing joint marketing and promotion initiatives
   Developing a premium brand of quality Welsh food and drink
   Providing a distribution service for producers
   Assistance with developing new product ideas

2.1.51.2 Best Practice

Initially, the project was conceived to give help and support to a group of some 20 locally based
food producers who also retailed from their premises. The idea was to assist with distribution and
promotion within the LEADER area. However, it soon became obvious that there were many more
such producer-retailers located across other rural areas of Wales, and the initiative was extended to
encompass some 300 in total.

During the initial phase between 1992-94, the project was financed 100% by LEADER 1 money,
with about 30 000 being invested during this period. During the second phase (1995- 2000) Cegin
Cymru is operating on a commercial basis, and invoices LEADER II for 9 000 per annum for
services rendered. It is set up as a cooperative or ‘friendly’ society, with members paying 1.5 to
become shareholders.

Four joint retail outlets have been opened across Wales, in market towns or visitor attractions, with
more in the pipeline. A central distribution centre has been opened and refrigerated delivery
vehicles introduced. The latest development is a web-site for marketing and selling Cegin Cymru
products, where customer information is logged electronically. Additionally, a new joint marketing
initiative has recently been established with European partners in Spain and France, which provides
entry to expanded markets for the local produce of each area.




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The plan is to move towards electronic stock control, although enthusiasm and the desire to develop
down the road of further Information and Communication Technology (ICT) is now being
threatened by lack of funds. However, Cegin Cymru is hoping to invest 30 000 in this
development, which will be funded by internal finance together with grant aid from the public
sector.

2.1.51.3 Conditions of application and transferability

    Cooperative action by producer-retailers
    External resources to kick-start the initiative
    Use of ICT to facilitate information-sharing, stock control, electronic trading etc.
    Creation of central joint-marketing and distribution facility.

2.1.51.4 Contact :

Betsan Caldwell (see page 9).
Dr. Enrico Cozzio (see page 9).

Cris Tomos
Director: Cegin Cymru
Antur Teifi
Parc Busnes Aberarad
Castell Newydd Emlyn
Ceredigion SA39 9DB
Wales, UK
Tel: +44 (0)1239 710238
Fax: +44 (0)1239 710358




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                Local shops and local development
Shops are regarded as a basic service for a rural community. Apart from acting as a source of supply
for residents, they play an important role in providing them with social contact, distributing local
produce or catering for tourists.

The existence of a business selling basic consumer goods is therefore closely linked with the
maintenance of traditional activities and the diversification of the local economy.

A partnership among all local players concerned is the key to success. Although it is shop-keepers
who are responsible for operating the businesses, in disadvantaged areas more than anywhere else,
local authorities play an essential role in improving the conditions for business operation.




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2.1.52 Network of rural districts

2.1.52.1 Context

In France, some urban centres play a key role in local economic development. These small towns
with a population of no more than 2000 have in most cases had to struggle to preserve a range of
shops and craft activities which make the place attractive. While conducting planning programmes
for their towns, the local councillors must also act in partnership with the CCIs and chambers of
trade to encourage the formation of groups of shop-keepers and craft workers and get them to
implement coherent development programmes.
However, these groups are not large enough to attain a critical size and hence to act on a sufficiently
large scale to be effective.

2.1.52.2 Best practice

A rural districts network experiment has been attempted in France.
This is the “Triangulaire de Saintonge” [Saintonge Triangle]. Set up in April 1997, it comprises 3
small towns about 40 kilometres apart: Aulnay de Saintonge (pop. 1500), Gémozac (pop. 2200) and
Pont l’Abbé d’Arnoult (pop. 1700).

The idea
Three town centres comparable in terms of economic importance and population, not competing but
facing the same problems, join forces in a loose form of association of municipal authorities capable
of creating positive synergy and securing technical, financial and human resources in favour of local
activity.

Objectives
To maintain, consolidate and develop commerce and craft industry in the 3 urban centres. To
change the urban centre’s image and the way residents see it.

Operation
The Saintonge Triangle is a non-profit association of three municipalities.
The board, chaired by one of the 3 mayors, ensures that the Saintonge Triangle is effective and
decides the main elements of general policy.
The steering committee, comprising the 3 mayors, the 3 chairmen of associations of shop-keepers,
craft workers and service providers, and representatives of the CCI and the chamber of trade,
actually plans the action to be taken.
The Saintonge Triangle employs an officer to co-ordinate the aspects of the action plan, and
particularly to generate a go-ahead attitude among businesses and organise group action.
There is a partnership agreement between the 3 towns, the shop-keepers’ associations and the
organisations representing the interests of traders (Rochefort and Saintonge CCI and Charente
Maritime chamber of trade). It was signed on 2 June 1997.




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2.1.52.3 Conditions of application and transferability

-   The towns must be of much the same size (population, economic fabric, etc.)
-   Local players in each town must be willing to join in
-   The towns must not be competitors
-   Close partnership between associations of shop-keepers, local councils and organisations
    representing the interests of traders
-   Shared officer (see next case study).

2.1.52.4 Contact:

Jean-Luc Cauquil (see page 9).




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2.1.53 Urban centre manager employed on a shared basis

2.1.53.1 Context

In most cases, the organisation of groups of shop-keepers and the co-ordination of their action is the
responsibility of the chairman of the association. To ensure a cohesive commercial development
policy for urban centres and encourage discussion between local players, it is becoming necessary
for these groups to appoint a representative. However, it is only in very exceptional cases that an
urban centre association of shop-keepers has the funds to create a full-time job, so it is necessary to
create a post for an officer to be shared with other neighbouring associations.

2.1.53.2 Best practice

His functions:
- to co-ordinate the action planned by the association of each town for which he is responsible
- to ensure implementation of the projects planned in the action programme
- to provide liaison between the chambers of commerce and trade, municipal authorities and shop-
  keepers’ associations
- to revitalise shop-keepers associations
- to organise collective measures to promote commercial activity
- to set up measures encouraging the re-use of empty shop units
- to set up and run a local commerce observatory
- to offer training programmes in close collaboration with the staff of chambers of commerce and
  trade.

His profile:
- a candidate with higher education qualifications (management, business studies, etc.) or one who
  has gained professional experience (organisation, training, etc.)
- go-ahead
- good communicator
- knowledge of business
- imaginative
- keen on team work
- good organiser.

2.1.53.3 Conditions of application and transferability

   Needs to be based on an organised federal body, either a local association or a network of rural
   municipalities.
   Must have an adequate operating budget.

2.1.53.4 Contact:

Jean-Luc Cauquil (see page 9).




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2.1.54 Mobilisation of a village community to set up a cooperative shop

2.1.54.1 Context

The presence of a retail shop in many mountainous regions is a determining factor in preventing the
depopulation of rural areas. This is the case of the Autonomous Province of Trento.
Trentino is a splendid region in northern Italy, famous for its natural beauty - the deep blue of Lake
Garda set in the magnificent scenery of the Dolomite Range.

The economic model indicated below is the one used by Movimento Della Cooperazione di
Consumo Trentina, in the province of Trento (Italy). Cooperation in Trentino, which is based on the
Raiffeisen model, began more than one hundred years ago in 1895, as the answer to the precarious
conditions of life experienced by the populations of the time. Today, out of a total local population
of approximately 460 000 people, 140 000 are members of one or more of the 900 cooperatives.
Most of them are heads of families, and represent the other members of their families, which means
that two thirds of the people of the entire province are involved in the cooperative movement .

2.1.54.2 Best practice

120 cooperatives are retail cooperatives. They were named “Famiglie Co-operative” by their
founder, Don Lorenzo Guetti (1847-1898), to indicate that consumers can feel at home when they
go to these shops, while at the same time accepting the responsibility that they share with the
administrators for running the cooperative, just as a good father would do for his family. This is a
unique local institution, not found elsewhere in Italy or abroad, which has both an economic and a
social purpose, ensuring that many small villages have a sales point. There are more than 120 small
villages in Trentino, with a total population of more than 40 000 people. Quite often the only shop
where the villagers can buy food is the one run by the retail cooperatives System of Trentino, mainly
for the benefit of the older inhabitants and the staff employed there, who are recruited from the same
village.

From an organisational point of view, the 117 Famiglie Co-operative are members of a central body,
the Federazione Trentina delle Co-operative, which also includes other types of cooperative among
its partners. The Federazione Trentina delle Co-operative offers several types of services to its
members, including:
   representation of the partners
   staff training
   management training
   assistance in legal and fiscal matters
   management consultancy
   accountancy and auditing

In 1899, to increase their purchasing power, Famiglie Cooperative created their second tier
consortium (Sait), whose social purpose is the purchasing and distribution of goods, via a
distribution centre, and services to the Famiglie Co-operative at the best possible price. Its main
purpose is leading and coordinating sales for Movimento della Cooperazione di Consumo Trentina.

SAIT has recently opened new cooperative shops in the nearby provinces of Bolzano and Belluno. It
has also started supplying more than 250 small retail shops which are not part of the cooperative




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network in the provinces of Trento, Bolzano, Belluno and Brescia, thus benefiting consumers living
in other rural areas.

The whole system is assisted, coordinated, guided and supervised by Federazione Trentina delle
Co-operative, a second tier consortium that includes all the other cooperatives that make up
Cooperazione Trentina (Casse Rurali, Cooperazione Agricola), as well as Famiglie Co-operative
and Sait.

The distribution of economically-priced quality goods has been made possible by the recent
agreement with COOP-Italia – the large national co-op group.

Shops will continue to exist in a given area only if that area includes an active community. This
implies that communal activities, such as associations and charitable institutions - not just economic
activities that generate employment and income - should be promoted.

Shops must be organised to provide the following:
a) a clean, tidy, pleasant shopping area
b) friendly staff with a professional attitude
c) well-defined stocks selected from those that rotate quickly to ensure that the produce sold is
   always fresh. A high stock-turnover will also give a good return on the invested capital.
d) carefully planned shop size, which must be standardised to be easily manned.

A shop association with a common policy ensures that the above objectives are easily achieved and
implemented. A consortium of individual shops or small cooperatives is the legal form that should
be encouraged and should have responsibility for:
a)   management
b)   administration, accounting and supervision
c)   careful planning of sales areas
d)   choice of the stock selection to be offered
e)   sales and stock control
f)   ensuring that goods are sold under the best possible conditions
g)   staff training.

The consortium defines at least two different types of sale area, namely above and below 400 sq.m.
Both types of shop will have different management characteristics for the choice of goods for sale
and management methods.

The various shops work as a single business (with shopping areas above and below 400 sq. m.) with
agreed common policies geared towards the final aim of the cooperative, i.e. to run the business in
the best and most profitable way. This implies that each shop will have to accept that some of their
individual power will have to be subordinated to the consortium's decisions, to ensure that a unified
approach to the business is adopted.




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It is of paramount importance that the various shops find common ground. An efficient business
association looking to a long-term future is always based on deeply-rooted values. Although market
demands may require a change in business strategies, the values at the base of the business, such as
information, quality, safety, love for one’s land, participation, sharing, solidarity and a culture of
mediation, remain unchanged. It is therefore necessary to create communities and markets where
both values and competition are encouraged.

Modern communication tools should be used to promote a sense of belonging in the community, re-
enforcing the values that are at the basis of the whole system, as indicated above.

2.1.54.3 Conditions of application and transferability

The system of Cooperazione di Consumo Trentina could be transferred to all areas in Europe. The
local legislation should assist in the creation of a model that is based on the culture of cooperation
between all walks of life, at least in the early stages.

The duties of Cooperazione di Consumo Trentina are the same as those clearly indicated in the
statute of Famiglie Co-operative, as both have the safeguarding of the interests of the members-
consumers as their primary goal. This mission has compelled Cooperazione di Consumo Trentina to
find the best possible ways of meeting consumers' expectations, regardless of the fact that the
consumers may be living in areas that are easily reached (towns, tourist resorts) or in rural areas
(5b).

Famiglie Co-operative concentrate upon the maximum social benefit to be derived by the final
users, as opposed to other sales networks that are primarily geared towards the financial aspects of
their business. As mentioned earlier, there are several small villages in the territory where there is
only one shop run by the Cooperative, as private shopkeepers have found it impractical and non-
profitable to run a business there.

The successful cooperative experience can be transferred to other areas only when there is a positive
commitment from the customers to become an integral part of the cooperative, which implies
accepting responsibilities for the running of the cooperative and pledging loyalty to the shop.

It is of paramount importance to remember, though, that the creation of a new cooperative cannot be
based only on financial considerations, but also on idealistic motivations that hold the community
together.

It is important that public bodies support new cooperatives, at least during the start-up process and
the initial stages, through incentives, either direct (contributions) or indirect (consultancy).
It is advisable not to share reserve funds among members, so that an asset is created in the long term
which will then be transferred to future generations.

2.1.54.4 Contact :

Dr. Enrico Cozzio (see page 9).




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2.1.55 Cooperative: partnership with customers

2.1.55.1 Context

The mass retail marketing organisations represented in rural areas either in the towns or on the
periphery in the form of shopping centres are noted for their cheap prices, a comparatively limited
selection (a typical discount grocer carries 600 items) and extremely few staff (staff costs represent
around 3-5% of turnover). Most employees work on the check-outs or as shelf fillers. There are
virtually no traditional-style sales assistants, whose job is to serve, advise and look after customers.
In consequence, supermarket style operations offer very inadequate service and their approach is not
at all customer-friendly.
Small shops cannot compete on price: their great opportunity lies in a decidedly customer-friendly
attitude and customer service, which help to ensure their success. On the basis of this realisation,
measures were devised by the co-ops with the support of the ZAROF institute which help to
develop a strong customer focus on the basis of analysis of what customers actually want, and
should thus increase the viability of small shops.

2.1.55.2 Best practice

• Continuous analysis of customer’s needs
To be able to offer goods and services which actually meet people’s needs, it is necessary to have
precise, up-to-date information on the sort of goods and services that customers want. The obvious
method of achieving this is to hold group discussions with customers or conduct written surveys. On
the basis of our experience at ZAROF, we prefer written surveys on grounds of time and
effectiveness. For this purpose, questionnaires are developed jointly with the sales team in the shops
concerned. Key points are:
        * shopping patterns in the local area, frequency of purchases, total value of purchases,
        * main items purchased,
        * new items requested, attitude to regional and ecological products
        * satisfaction/dissatisfaction with the village shop (as open questions)
        * need for additional services and facilities for customers
        * shopping patterns outside the local area
        * population figures
The questionnaires are handed out personally by the sales team and sent anonymously by post to
ZAROF for analysis. The results are set out in graph form and discussed with both the sales team
and the customer in order to decide on practical measures.

• Round table talk between co-op managers and customers
There has been a well-established tradition of round-table discussions in East Germany, especially
since unification, and they facilitate communication and participation by representatives of various
interests in arriving at a joint solution to a problem. During these round-table discussions,
customers’ representatives who are at the same time members of the co-ops discuss topics which
concern the co-op as a whole and its future. These discussions are organised and led by external,
neutral chairmen, and the results are recorded and made public in the co-op.




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2.1.55.3 Conditions of application and transferability

These practices produce the following results:
• The main outcome of the continuous analysis of customers’ requirements is information,
  motivation and participation by customers in the shops’ development. This can secure the
  customer base and demonstrably increases customer loyalty (turnover per customer). In addition,
  the customers identify more closely with “their” shop and this also safeguards future customer
  loyalty.
• Round-table discussions and this form of cooperation can produce solutions based on differing
  points of view (that of the co-op and that of its customers), so that when they are implemented
  they are accepted far more readily than decisions enforced by a top-down approach.

Successful transfer of these practices requires:
• a business culture which values customer information and participation
• an external, independent institution which analyses customers’ needs and presents the results in a
  manner which customers can understand, as well as being able to initiate and organise round-
  table discussions on a systematic basis, and to lead discussions and record and publish the results
• customers interested in the development of “their” co-op.

2.1.55.4 Contact:

Dr. Enrico Cozzio (see page 9).
Kathrin Rieger-Genennig (see page 8).




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2.1.56 Commerce and cultural or sporting activities

2.1.56.1 Context

Culture is an important aspect of local planning and development. However, action taken in this
sphere must be based on long-term facilities which are open continuously; cultural activity and
business can both gain from their respective synergy.
This case concerns meeting a three-fold need for rural populations: provide them with basic
necessities, offer them congenial places to meet, talk and enjoy the cultural and/or sporting facilities
which they want. France has developed the idea of a “culture café”.

Objectives

To maintain or establish a sales outlet.
To enhance commercial activity by linking it with culture.

2.1.56.2 Best practice

This involves providing local shopping facilities and holding regular cultural or sporting activities at
the same location, which will provide the operator with indirect additional income. This requires a
contracting authority (the local council) which commissions a multi-service centre with its café
(same procedure as for rural multi-service shops) and which, by partnerships with cultural or
sporting centres, can develop and organise cultural or sporting facilities (library, theatre, video
room, sports hall). Such measures entail a need for additional finance to fund the special theatre or
sports facilities.

For projects of this type it is necessary to find operators capable of combining their commercial
activity with the continuous organisation of cultural or sporting facilities.

Actual example: the GAVAUDUN culture café (LOT et GARONNE); this village chose culture as
the key to local development as long ago as 1977. The example given therefore forms part of a
wider scheme.

Chronology:
- in 1991 the local council bought the old café to convert it into a café/rural multi-service store
   offering cultural events
- the CCI conducted a preliminary feasibility study
- refurbishment of the building
- the culture café was opened in May 1994.

The whole set-up comprises: a (secondary) commercial activity, a library, a restaurant and 2
bedrooms to let. The operator rents the premises (paying 460 per month plus all running costs), and
the local council retains ownership of the building. Admission to the library (1100 works) and
events is free of charge, with no obligation to purchase food or drink on the premises. The events (2
a month) are planned by a committee comprising the Directorate of Cultural Affairs, the chairmen
of the associations, and managers of cultural centres of neighbouring towns.
The average audience totals around 40 people per event; they come from the local area and
neighbouring towns (25 km).




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The total investment came to EUR 261 000 broken down as follows:
purchase of the building: EUR 59 000
installing the cultural facilities: EUR 123 000
fitting out the business premises: EUR 79 000

The business premises were fitted out with funding provided as follows: local council EUR 39 000,
Europe - EUR 20 000, the State - EUR 16 000 and the General Council - EUR 4 000.
Finance for the purchase of the building and installation of the cultural facilities was provided by
the local council EUR 133 000 and the ministry of culture EUR 49 000.

The operator pays the running costs.

Impact on local development

•   Maintenance or creation of direct jobs (operator, waiter, house-keeper, organiser, etc.). In the
    case of the GAVAUDUN café: one direct job plus seasonal jobs in the summer.
•   Possibly the direct maintenance of public services.
•   Enhancing the attractiveness of the town for residents and for people from outside, thus bringing
    in additional resources for the operator (in the case of the GAVAUDUN café, two-thirds of
    audiences eat or drink on the premises after an event)
•   Reinforcing the town’s image and diversifying the range of services, which could attract new
    residents or persuade people not to leave.

2.1.56.3 Conditions of application and transferability

•   Need for a strong local political will
•   Project transferable so long as it is possible to establish lasting partnership with high grade,
    reliable cultural or sports centres
•   Cultural activities are not profitable and require a subsidy of over 90%, with a major input from
    the operator (more complicated selection criteria than for someone running a simple bar or rural
    multi-service shop).

2.1.56.4 Contact:

Jean-Luc Cauquil (see page 9).

CCI du Lot et Garonne
52 cours Gambetta
47047 – AGEN Cedex
Tél.: 33-553 77 10 00
Fax: 33-553 77 10 76




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2.1.57 Promotion of tele-working to increase the potential for local purchases

2.1.57.1 Context

PROTIS is a pilot project supported by the Austrian national government to promote tele-working
in the rural region of Hansberg. This region has a high level of commuting to the nearest large town
about 40 km away. These commuters tend to do most of their shopping in the town to the detriment
of the Hansberg region, which is condemned to the role of a dormitory area.

Objectives

•   To create conditions which favour the expansion of tele-working
•   Actually to set up 30 jobs geared to tele-working
•   To make people aware of the benefits of tele-working
•   To avoid the loss of purchasing power

2.1.57.2 Best practice

The project was initiated by the local authorities and backed by the national government, which
provided the necessary funding and a consultant specialising in the tele-working sector. The project
was set up by the combined efforts of these three partners, as they were genuinely concerned about
local economic development.

The initiative began with publicity and information provided by the local authorities to explain the
advantages and benefits of tele-working, but also its drawbacks. This campaign was essential not
only for potential tele-workers but also for the businesses and employers concerned, in order to
demonstrate the benefits and prospects for this method of working.

Tele-working cannot be regarded as really creating jobs, but as changing the way work is organised.
The project therefore began with an audit of the local workforce. On the basis of this analysis, 30
people were selected as potentially capable of adapting to this system of working, and were given a
6 month trial period.

The project was primarily the responsibility of the local authorities, but the funding came from the
national government. The private partner provided expertise.

Impact on local development

•   to increase local employment
•   to encourage local business activity
•   to promote social activity in a rural area which has become a dormitory.




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2.1.57.3 Conditions of application and transferability

Presence of local willpower and a national backer
Role of the private partner
Interest of workers and employers in this system of working
Possibility of organising local development around a group project.

2.1.57.4 Contact:

Jürgen Habichler (see page 9).




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2.1.58 Regional business observatory

2.1.58.1 Context

Consumer satisfaction is achieved by a offering a varied range of goods and services and ensuring a
balance in business formats. All consumers want to be able to find the type of shop and sales format
that suits them without having to travel too far. It is therefore evident that, while taking care to
ensure profitability, it is necessary to avoid destructive competition between different forms of
distribution, as this is causing the declining attractiveness of town centres, the rural exodus and the
proliferation of empty shop units.

These objectives were clearly stated in the legislation passed some twenty years ago by the French
government in an attempt to organise and structure urban shopping facilities (Royer, Doubin and
Sapin laws).

There are many issues at stake where shopping facilities are concerned and they must be
amalgamated in the form of a joint project. For instance, commercial development charters might be
drawn up to provide a sound, universal foundation for conducting a concerted, consistent policy on
shopping facilities. They must therefore be based on reliable and incontrovertible data which only a
business observatory can provide.

Analysis of the available shopping facilities is essential and should cover both the existing situation
and the changes taking place. In France, as a general rule, the only available information is the
administrative data contained in businesses’ applications for registration in the Register of
Commerce and Services kept by the chambers of commerce and trade and the INSEE (National
Institute of Statistics and Economic Research).

2.1.58.2 Best practice

The Auvergne Regional Chamber of Commerce and Industry (CRCIA), requiring a rigorous
analysis of commercial trends, suggested to the INSEE Regional Directorate that it might take part
in methodological research leading to the establishment of a regional business observatory, called
the “Regional Business Observation Unit” (CROC).

The business census was conducted in 1983 by a postal survey and, after comparison with the
INSEE records of existing establishments, there was a field study to check on establishments
covered by the postal survey and make inquiries at establishments which did not reply.

The CROC has three original features:

• The first is due to the desire to ensure economic monitoring of all enterprises on the basis of the
  pursuit of an activity at a given address, thus recording the various stages in the activity of the
  sales outlet. Thus, after incorporating any changes in the form of businesses added or deleted
  according to INSEE, the CRCIA completes and checks the information by systematically
  telephoning the owner of each business.




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• The second original feature concerns the sphere of activity: the survey covers enterprises
  engaging in a commercial activity not only as their primary business but also as a secondary
  activity; that is why a special nomenclature was created, based on the activity actually pursued,
  and slightly different from the “INSEE NAF nomenclature”.

• The third original feature concerns the concept of economic zoning, permitting business analysis
  based on commercial attractiveness. Thus, the CROC managed to go beyond the analysis of
  business at a purely administrative level and define zones according to their actual commercial
  attractiveness. This zoning takes account of the pull exerted not only by major towns, but also by
  small towns or urban centres less far away.

The information kept by the CROC:
Þ particulars of the establishment: business name, logo, address of registered office and branches,
  telephone, fax, legal form
Þ particulars of the operator: name of the owner or partners, date of birth
Þ particulars of the activity: activity actually pursued, adjustment of the activity code and break-
  down into 125 detailed codes, activity with permanent premises, market, van round, permanent
  or seasonal
Þ characteristics of the establishment: allocation of jobs, sales area, storage area, outdoor space and
   commercial organisation
Þ monitoring of the outlet: link with predecessor and/or successor, recording of businesses created
   or taken over.

Annual budget:

EUR 100 000 including operating costs (staff, computer database) and publication costs.

2.1.58.3 Conditions of application and transferability

-   Precise definition of the observatory’s objectives (in this case: only commercial facilities) in
    order to limit the criteria and monitor changes.
-   Identification of commercial activities actually pursued.
-   Establishment of resources for initial census and constant up-dating of the database.
-   Listing all existing information sources and avoiding duplication.
-   Setting up information processing facilities.

2.1.58.4 Contact:

Michèle Bernard (see page 10).




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2.1.59 Promotion of local products

2.1.59.1 Context

This measure aims at selling and marketing products obtained from the land and of certified origin,
either produced direct (vegetables, fruit, etc.) or manufactured (salted or cured products, jams, hand-
made products, etc.). By identifying products with a region and promoting them it is possible to
improve the brand image of local shops and encourage the activity of traders and producers.

The example set out here is the “Assiette de Pays” concept set up in France .

Objectives

•   Diversify production niches by offering local products identified with the region.
•   Be sure of the production process and the origin of the product sold
•   Increase the range of goods offered to consumers
•   Seek high quality, distinguishable from “ordinary products” , i.e. natural and/or biological
    products
•   Cultivate the authentic, genuine and natural
•   Promote food products and other - particularly hand-made - products such as silk, linen, etc.
•   Organise a sales network
•   If appropriate, join in a tourism promotion campaign.

2.1.59.2 Best practice

First it is necessary to be sure of the production process, the origin of the product, checking or
suggesting the names on the labels. Marketing must be directed and possibly organised on the basis
of market research. There has to be a real marketing drive to win customers and increase
consumption in the region and outside. It is often necessary to provide information and training for
producers and distributors.

To avoid isolation, producers can be organised into a network run by a private or public sector
agency.

The “Assiette de Pays” concept was registered with the French National Industrial Protection
Institute by the National Federation of Tourist Regions and is based on a quality charter defined by
the whole network. This concept is based on four points:
• regional products: to guarantee customers that all the dishes served consist solely of products
    produced locally
• moderate prices: a maximum of EUR 10.7 for a savoury or sweet dish with a drink (EUR 6.10
    for children)
• a quality ambience with, for children, the chance to find out about local products while enjoying
    amusing activities
• support for tourism: the “Assiette de Pays” should encourage the visitor to go and see where the
    goods are produced by craft workers and traders.




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This concept benefits from a communication strategy based on the development of instruments
common to various regions. Each region has a brochure listing the various restaurants. Educational
literature is provided for children. In each region, restaurateurs are encouraged to join the scheme
and seek partnership with local operators.

The initiative received EU support via the Leader programme.

Players

The main players are producers and distributors, usually via their federations.
A public body such as a public local development agency or a private agency can take charge of
checking on the products, and organising and effecting the distribution. Consumers, who are passive
players, must also be made aware of the scheme.

Impact on local development

• Setting up special sales areas: sale on-site, on the producer’s premises, regional centre, kiosks,
  travelling markets
• Increasing the range offered by local shops
• Job creation and/or preservation
• Diversification of activity for producers and manufacturers, and development of new markets
• Encouragement for the formation of groups and social surveys
• Raising the awareness of local people
• Synergy between commerce, craft activities and tourism

2.1.59.3 Conditions of application and transferability

• Product conservation and specific heating/refrigeration equipment and additional investment
• Products sold at higher prices/with difficulty on the market
• Control of the “regional” label, set specification to adhere to
• Producers and traders get together to define a specification and certify product authenticity
• Specific legislation on processed products (varying from one region to another)
• The presence of a public or private authority as organiser, recognised by both producers and
  distributors, is a prerequisite for any project
• Lack of harmonisation of national and EU legislation between agricultural, craft and commercial
  sectors, leading to risks of conflict with distortion of competition.

2.1.59.4 Contact:

Didier Boyer (see page 11).
Dr. Enrico Cozzio (voir page 9).




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2.1.60 Method for determining the benefit (social and environmental value) of
      maintaining general merchandise services in rural areas

2.1.60.1 Context

In a good many communities in Sweden the continued existence of grocery merchandise service is
gravely threatened. The termination of such service is a loss felt by many: those residents who
utilise the store's services and the rural district, which is responsible for assuring the availability of
such services to its residents and can be forced to bear the expense of transportation or home-
delivery services to residents who cannot travel to a city to shop. Other businesses in the community
are put in difficulty. Home-owners see property values decrease so that houses become unsellable.
The community loses its vitality and as residents leave, it ”dies”.

There are not only economic consequences to the loss of grocery and merchandise services. There is
also a negative effect on the environment.

2.1.60.2 Best practice

Sweden has reliable statistics on the country and its residents. For the purpose of assembling these
statistics the country has been divided into square kilometres. One can find statistics on the number
of residents, their sex, ages, size of families, disposable incomes, ownership and location of
property, number of cars, available public transportation and roads and their condition. Using these
statistics one can accurately determine the distance and travel time of each resident to the nearest
shop selling food and household goods. One can also determine with accuracy the distance and
travel time to the next nearest shop. The statistics enable one to measure the effects of the possible
closure of a given shop.

Significance of a shop

Using this same data one can also determine what might be called the assumed customer-base for
the shop, this being the nearest shop to residents in a given area. One can then determine the
frequency of visits and loyalty of customers to this particular store. Customer loyalty is often an
indicator showing how well the store meets the needs of customers within its area.

By making use of the statistics on residents' ages and car ownership, it is easily determined what the
possible demand would be for home-delivery or transportation to another shop if a store closure was
to occur. One can also predict the extra driving residents will be required to do and the travel time
involved if a particular store goes out of business.

All of these factors can be translated into direct costs.

Environmental benefits

An increase in the use of cars will have a negative impact on the local environment and increased
driving leads to an increased risk of personal injury and damage to cars as a result of accidents.




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The information presented above is the result of compiling and combining statistics from rural
districts in Sweden. The Swedish Consumer Agency department in Sweden is responsible for the
analysis of the statistics. The statistical analysis can be used by individual stores to improve their
efficiency and assortment of products and for marketing their services.

For local authorities responsible for creating a plan for availability of food and necessary goods in
their districts, the statistical material serves as an excellent basis.

2.1.60.3 Conditions of application and transferability

The real environmental argument

The statistical material can also serve as an excellent basis for spotlighting the questions which are
becoming increasingly important for the future namely, that maintaining food and grocery stores in
rural communities is beneficial to the environment. The value of this cannot be expressed in terms
of money. The environmental claim cannot be made by the giant discount department stores in
shopping complexes.

In the future, the positive environmental aspects of local rural merchants must be emphasised more
strongly. Perhaps stores should receive an environmental ranking - a symbol for each store's
environmental value. Such a ranking would help promote those shops with consumer-community
importance namely, those located in sparsely populated rural areas.

2.1.60.4 Contact:

Dr. Enrico Cozzio (see page 9).
Leif Larsson (see page 10).




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2.1.61 Local development initiatives competition

2.1.61.1 Context

Prizes are awarded for particularly successful measures to revitalise urban and rural centres,
sponsored and developed by local advertisers and interest groups, municipal authorities or
individual entrepreneurs via informal cooperation. The measures must have a lasting, positive effect
on the attractiveness of the urban or rural centres concerned. A further objective of the competition
should be to make the public aware of the importance of lively urban and rural centres and to
stimulate ideas.

2.1.61.2 Best practice

Lower Austria and the Lower Austrian Chamber of Commerce recognised the importance of lively
centres. That was why the “Creative Centre” ideas competition was launched. Advertisers and
interest groups, municipal authorities or informal groups of businesses were invited to enter this
competition. It was highly successful. Prizes were awarded for ideas and concepts which exert a
lasting, positive effect on the attractiveness of the urban and rural centres concerned. The
competition was judged in two categories:

1. Overall concept:
   Comprehensive projects for developing the urban and rural centres.
2. Events and measures:
   e.g. festivals, action days, cultural activities with economic benefits for municipalities or
   districts.

There was also an extra prize for projects which do not fall clearly into category 1 or 2 but represent
an excellent idea.

The activities actually focused on the following points:
• Promotion of regional, innovative competitions for good ideas for concepts and implementing
   measures with economic benefits
• Promotion of implementing measures based on previous competitions for good ideas for
   concepts and planned implementing measures with economic benefits. Aid should be provided
   in the following key spheres:
       advertising to revitalise urban and rural centres, especially to promote shops, restaurants and
       cafés and services
       measures to improve the external and Internal presentation of businesses in urban and rural
       centres
       improvements to the infrastructure, particularly better access to the centre and parking
       facilities
       promotion of measures to make the town or village convenient for customers and residents
       promotion of the production of local marketing concepts and local development concepts
       focusing on increasing the attractiveness of central areas of towns and villages
       measures to attract newcomers to improve the mix of businesses in urban and rural centres
       or special aid for investment in expansion by businesses already located in such centres
       longer term education and training for entrepreneurs and employees
       activities to build up cooperation by businesses in urban and rural centres




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       promotion of longer term advice or guidance on the implementation of activities based on
       competitions for good ideas
•   Special promotion of competitions for good ideas to revitalise urban and rural centres or
    improve the economic structure in border regions.

However, one should also promote the analysis of such competitions as a basis for setting up
specifically targeted regional advice and education programmes.

In November 1997, Lower Austria and the Lower Austrian Chamber of Commerce launched the
“Creative Centre” competition. The aim was to award prizes for particularly successful measures to
revitalise urban and rural centres. Advertisers and interest groups, municipal authorities and
informal groups of individual entrepreneurs took part. The measures had to have a lasting positive
effect on the attractiveness of the town or village centre concerned. The plans and their
implementation were judged in terms of originality and economic benefits. They were supposed to
achieve the following objectives:
                      • gaining new customers
                      • securing greater customer loyalty
                      • increasing frequency of purchases
                      • improving the attractiveness of the centre

There were prizes for overall plans (3 prizes totalling ATS 600 000 in prize money), for events and
for measures (3 prizes totalling ATS 350 000) and a special prize of ATS 70 000 sponsored by
Volksbank for a “good idea”.
In addition, certificates and education vouchers were handed out. The projects had to be submitted
to the Lower Austria Chamber of Commerce by 1 October 1998.

The competition was a great success.
49 participants submitted a total of 64 projects. An expert jury decided on the winners. The costs
were divided roughly as follows: Lower Austria Chamber of Commerce 50%, Lower Austria 44%
and Volksbank sponsor 6%.
The Lower Austria Chamber of Commerce took charge of organising the competition.

2.1.61.3 Conditions of application and transferability

Allocate a substantial budget for the award prizes.

2.1.61.4 Contact:

Dr. Enrico Cozzio (see page 9).
Werner Kojan (see page 10).




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2.1.62 The local information magazine

2.1.62.1 Context

One of the strengths of shopping centres on the edge of towns is a deliberately targeted joint
marketing strategy involving all the businesses located there and events taking place.

Businesses in urban and rural centres could also adopt a joint marketing strategy for their centre. For
that purpose they need a joint marketing plan. One of the many options is a cooperative business
magazine which is sent out to consumer households in the catchment area. If the town is in a tourist
area, the magazine could also contain information for tourists and be handed out to them. The
primary aim of the magazine as a marketing concept is to secure and improve the economic
situation of centrally located businesses, but businesses in the catchment area could also be
included.

So the main aim of the cooperative business magazine is to help to improve the economic situation
of a town or district. The magazine should also offer help with implementing the marketing or
development plans of such places, but there is another particularly important psychological aim: the
local business magazine should become the special magazine for the population of a district or for
tourists visiting the area. Residents and people visiting the district should say: “That is our
magazine” (good practice - the cooperative business magazine “Blick ins Pöllauer Tal” [View of the
Pöllau Valley]).

2.1.62.2 Action proposals

Practicable marketing and development plans for towns and districts are particularly important for
safeguarding and improving their economic structures. To ensure that a plan is put into practice, the
population must also be involved. One way of implementing marketing concepts and securing and
improving the economic structure of towns and districts is the “cooperative business magazine”. A
well produced magazine is also an instrument for uniting the residents of a town or district. If
residents identify with their region, it is also easier to improve the economic situation of the region
or town concerned.

The following proposals for action are therefore presented:
• Promote the preparation and implementation of marketing concepts involving the local
   population of towns and districts
• Promote advice on the establishment and publication of cooperative business magazines in
   towns and districts
• Measures to assist local authorities incorporating their official notices in business magazines.




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2.1.62.3 Best practice

The cooperative business magazine “Blick ins Pöllauer Tal” is the magazine of businesses in the
Pöllau valley which have formed a marketing association. This association has about 60 members.
The magazine has its own marketing concept, which was co-ordinated with the local marketing
concept for Pöllau. The magazine includes the official notices published by the local council, plus
information from the tourist association, as the Pöllau valley is a tourist area.
The magazine comes out 4 times a year and comprises 32 pages. The print run is 5000. The annual
budget for producing the magazine is around ATS 260 000. It is funded with the aid of regular
advertisements, a grant from the Pöllau local authority (around ATS 24 000 a year) and private
sponsors. The magazine is produced by a small, idealistic editorial team (5 people). It is printed by a
commercial printing firm. The editor in chief is also the co-ordinator for the local authority and
agencies shaping public opinion in the Pöllau valley. The paper aims to be seen by the people of the
Pöllau valley as “their paper”. At the same time, it offers information on businesses in the Pöllau
valley and endeavours to promote them (“Shopping in Pöllau - shopping in the Pöllau valley). The
paper is also a vehicle for advertising all activities by Pöllau businesses and associations in the
Pöllau valley. It has been operating successfully for around 20 years.

2.1.62.4 Conditions of application and transferability

- Willingness of all local players to cooperate.
- Involve a local organisation to publish the magazine.
- Allocate a budget.

2.1.62.5 Contact:

Dr. Enrico Cozzio (see page 9).
Werner Kojan (see page 10).




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2.1.63 Consumer opinion poll

2.1.63.1 Context

The aim should be to develop a long-term, effective strategy for restoring the attractiveness of urban
and rural centres for consumers and residents. The population should be involved in devising this
strategy, i.e. people should be asked how they think their attractive local centres should look.

2.1.63.2 Action proposals

The local authority should have a policy which, jointly with local businesses, takes measures to
restore the attractiveness of the local centre for consumers in the long term. So that the right
measures can be taken it is necessary to devise a local marketing and development concept. If this is
to succeed, it must be developed jointly with local businesses, the local authority and the
population.

The people must be involved in the marketing concept right from the start. An extensive consumer
survey is therefore needed. The survey should ascertain what consumers want and what needs to be
done in the central areas to encourage consumers to go there. The survey should focus on what
consumers want as regards local infrastructure in the central areas and the need for shops and a
varied range of goods, services, restaurants, cafés and leisure facilities. Consumers should be
involved both in the development of the local marketing concept and in the on-going
implementation of the concept. The local marketing concept must be linked to the regional
development concept.

The advice on marketing provided for villages and towns by the chambers of commerce of Lower
Austria and Steiermark also includes customer surveys. These ask residents in the catchment area
about what they need and find out about patterns of purchasing power.
The main requirements covered by the survey concern the following topics:
                                            • need for local infrastructure
                                            • quality of businesses (retailers, restaurants and
                                               cafés, services)
                                            • desired mix of business
                                            • identification with the locality
                                            • cultural and leisure requirements.

The analysis of the residents' survey forms part of the basis for producing the local marketing
concept. It also strengthens the residents’ identification with their town, and is a basis for providing
advice and training for business operators.




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2.1.63.3 Conditions of application and transferability

•   Procedure for establishing cooperation between businesses and consumers
•   Special aid for local marketing concepts which provide for a detailed consumer survey and
    continuous consumer involvement and information during implementation of the concept
•   Aid for all implementing measures including long-term monitoring
•   Special financial aid for cross-border surveys and for market surveys in border regions
•   Aid for cooperation between business operators and consumers, ensuring that businesses keep in
    line with what consumers want (“consumer advisory board”).

2.1.63.4 Contact:

Werner Kojan (see page 10).




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2.1.64 Regional loyalty card

2.1.64.1 Context and aims

To increase the frequency with which people shop in urban and rural centres, it is necessary to have
marketing concepts which include measures to enhance the attractiveness of central areas.

One possible way of revitalising these centres is the multi-function regional customer loyalty card.
Such cards can be used for payments throughout a particular region. However, they can be used not
only for buying goods in retail shops but also to obtain services (Good practice - multi-function
regional customer loyalty card of the Kärnten chamber of commerce: ShopIN Card). Bonus points
are awarded for every purchase made with the card. However, the bonus points can be redeemed
only in the village or town where the card was issued. The issuing agency is an advertising or
marketing association of businesses in the local town or village centre.

The aim of the multi-function regional customer loyalty card with a payment function is to secure
the loyalty of customers to their local town.
Customers can buy goods in town centres throughout the region and obtain other services, but they
can redeem the bonus points only in their own local town.

2.1.64.2 Action proposals

The multi-function customer loyalty card - “ShopIN Card” was initiated by the Kärnten chamber of
commerce with the aid of several sponsors and launched in Kärnten. Bonus points are awarded for
each payment made with the card. The bonus points can be redeemed only in the place where the
card was issued. The issuing agency is an advertising or marketing association of businesses in the
local town centre.
Customers can buy goods in town centres throughout the region and obtain other services, but they
can redeem the bonus points only in their own local town.
A ShopIN terminal costs EUR 625. The introduction of the ShopIN card system was financed by the
Kärnten chamber of commerce with the aid of sponsors. So far, 9200 terminals have been installed
in Kärnten and the figures are rising. Terminal owners must commit themselves for a period of 3
years. The Kärnten town marketing association (VKS) organises the system. The number of bonus
points for each purchase depends on the price and nature of the goods. The card costs EUR 12.6 per
annum.

2.1.64.3 Conditions of application and transferability

•   Marketing and advertising measures to establish a customer loyalty card scheme
•   Advice on the introduction of customer loyalty cards
•   Advice on the analysis and use of the data collected with the aid of customer loyalty cards
•   Promotions
•   Support for regional coordination of customer loyalty cards
•   Maintenance of a regional network of customer loyalty cards
•   Help for shop owners and loyalty card operators with evaluating the data based on use of the
    cards




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•   Promotion for all assisted consultancy training for staff in shops in the customer loyalty card
    scheme
•   Promotion for all assisted consultancy to improve the quality of shops in the customer loyalty
    card scheme.

2.1.64.4 Contact:

Dr. Enrico Cozzio (see page 9).
Werner Kojan (see page 10).




                                                                                               173
3 - Recommendations




                      174
R1.    Financial aid is necessary to encourage shop-keepers to modernise their shop (stocks,
       handling, logistics, management equipment and methods, etc.)

R2.    It is vital to provide shop-keepers with training before and after they set up their business.
       Training is the essential complement to the natural qualities of the person setting up in
       business or the shop-keeper wanting to adapt to new sales techniques and new working
       instruments.

R3.    It is essential to offer advice for retailers.

R4.    They need technical aid, particularly to enable them to acquire new computerised
       management and communication tools.

R5.    Traders operating from permanent premises need to be more closely involved in local
       development programmes and thus encouraged to form associations.

R6.    It is necessary to establish links with other economic activities, particularly those relating to
       tourism. Rural shops could be the source of tourist information and even become fully
       fledged partners in taking bookings.

R7.    It is necessary to develop the concept of quality in rural shops. Quality depends on the shop-
       keeper’s ability to adapt. The award of a “Quality Services” certificate might encourage
       some banks to grant modernisation loans.

R8.    A statistical information service is vital to shop-keepers who have realised that success is
       achieved via better knowledge of the market.

R9.    Encourage shop-keepers to form networks in order to obtain maximum reductions on the
       cost of certain goods, promotion, advertising and simply exchanging know-how and
       becoming less isolated.

R10.   Create a distinctive European market sign. The European Union of Itinerant Traders (UECA)
       could take charge of launching this project and co-ordinating it within the European Union.

R11.   Encourage greater involvement of itinerant traders and markets in local development.
       Markets are an attraction which has a great impact on the liveliness of villages.

R12.   Develop partnerships with permanent and itinerant traders for the purpose of making rural
       villages more attractive.

R13.   Ensure compliance with market regulations in order to retain itinerant traders and support
       the work of bringing markets up to EU standards.

R14.   Maintain special markets but ensure that the traders concerned keep to the competition rules:
       flower markets, second-hand markets, flea markets and farmers’ markets must exist
       alongside general markets without being detrimental to them.




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R15.   Support the financial effort of itinerant traders who wish to modernise their operating
       equipment and innovate (van, means of payment, communication tools).

R16.   Harmonise market regulations and simplify them at European level. Basic regulations
       common to Member States would make it easier for frontier-zone markets to move around
       and sell their goods throughout Europe. Here, too, UECA can be take charge of this work of
       collaboration with the various partners in the Member States.

R17.   Create market manager posts and market manager training schools. These market managers
       should be involved at local level in regional development programmes so that they can deal
       with the markets for a group of local authorities.

R18.   Develop and harmonise statistics on itinerant traders and markets while establishing a
       common server for itinerant traders.

R19.   Enhance the status of itinerant trading and support the work of traders operating van rounds
       by introducing a QUALITY LABEL.

R20.   Adjust the tax rules for itinerant traders operating in rural areas.

R21.   Open up markets to local producers while ensuring that they all have to meet the same
       obligations as regards tax and social security.

R22.   Enable markets to maintain and develop their attractiveness in town centres by helping
       municipal authorities to invest in bringing them up to standard and restructuring and
       modernising open-air or covered markets.

R23.   Set up market development programmes which make it possible to develop customer
       services (payment by card, transportation of goods, provision of special trolleys, introduction
       of loyalty cards) and negotiate with the banks to have cash dispensers installed near market
       squares. These measures should be taken jointly with the local economic players and, of
       course, the local authority.

R24.   Encourage the development of firm centres and networks in the wholesale sector.




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R25.   A rationalised reporting method is needed, as is a cut in the number of reports required.
       A certain consideration in the lay-out of the report requirements might lead to a basis for
       cooperation among the various ministries which require the reports, to the benefit of SMEs.
       The possibility of electronic reporting should be investigated along with the legal
       possibilities for and implications of using electronic signatures.
       This, in combination with the above-mentioned rationalisation of questionnaires, would help
       save time for all SMEs, and in particular the smallest.

R26.   Laws on opening times should be relaxed for the benefit of commercial SMEs, thus enabling
       them to provide a better service for their customers.

R27.   National legislation must consider the effect of super shopping centres on the local, regional
       and national economies.

R28.   We agree that signposting should be restricted to the essential, in order not to endanger
       traffic, but the restrictive legislation concerning the signposting of any commerce on country
       roads prevents local shops from receiving passing trade. Such legislation should be more
       flexible and the idea of the design of a standard pictogram should be considered.

R29.   The social need for local shops and the municipality’s need for services for the handicapped,
       the sick and elderly people in all areas should be considered. The working groups
       recommend a change in the understanding of business competition at village level and
       suggest payment for services rendered to society on behalf of the municipalities.

R30.   A permanent European Observatory on Distributive Trades

       The working groups set up on the initiative of the European Commission are an initial
       experience that should give rise to other contributions in the near future. These groups,
       which consisted of members of public institutions and “field” members, exchanged their
       experiences and ideas on the various local contexts and different local good practices. They
       also made parallels between the technical and financial solutions reached by each member.
       The difficulties of small local retailers, who are the “glue” of the rural world, seem to be the
       same throughout the countries of Europe.

       Rural areas are handicapped in many ways (e.g. population drain, ageing of population,
       unemployment, pauperisation, etc.). Positive initiatives by local decision-makers, aiming to
       test new forms of cooperation between retailers and wholesalers, are very expensive for an
       individual operator and should be supported by European cohesion policies. The genuine
       desire for the harmonious development of urban and rural territories must also be combined
       with a policy of balancing competition in retailing between big and small initiatives.

       The permanent European Observatory on Distributive Trades, promoted by the European
       Commission, could serve as a professional support, aimed at developing the above-
       mentioned forms of cooperation with reference to the “field” experiences of each European
       Union Member State and extending in the future to cover central and east European
       countries (CEECs).

       Members of the working groups are available to give their contributions and to continue
       their cooperation with the European Commission and their involvement in dissemination




                                                                                                   177
activities. A number of "focused" meetings could be held for this purpose. Such meetings
could follow-up and carry out in greater depth the exchange work, draw up measures for
improving the transfer of know-how and skills, and study the adaptations necessary for the
application of the good practices selected by each working group in other specific contexts.




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4 - Annexes




              179
      Annex 1 : Some thoughts on the subject of
    supplying small retailers in less-favoured rural
                         areas
Local availability (proximity service for customers) is very important in order to maintain the
population in rural areas and to meet customers’ needs (quality, choice, price, service, etc.) in the
following circumstances:

   • lack of consumer mobility;
   • advanced age of the population;
   • difficulty of access, requiring too much time for each shopping trip in relation to the value of
   the purchases (unless leisure needs can be satisfied at the same time).

It goes without saying that local availability is particularly important in the case of groceries and,
especially, perishable goods. These products can create difficulties and economic risks regarding
storage, even for average-sized households with a reasonable daily consumption of such items. This
situation, of course, creates some difficulties in the management of small retailers’ activities.

When the size of the market (in terms of potential consumption in the catchment area) permits
ventures involving a considerable capital outlay (hypermarkets, superstores, department stores, etc.),
the conditions exist for developing ventures by big multiple stores or ventures based on franchising
and cooperation. There is also scope for specialist outlets to complement the range of large
“generalist” outlets. If the potential market is small, instead, there are no basic economic conditions
to encourage the development of medium-to-large commercial ventures.

Nevertheless, small traders can also experience difficulties, unless they are backed by an efficient
and properly developed wholesale system.
If - and this is happening in France where mass marketing groups are not interested in supplying
small retailers - wholesalers are disappearing, even small traders find it hard to get supplies. And the
decision to stock up at large generalist outlets means that prices to consumers will be too "high" in
relation to average spending capacity in small centres where the economy is predominantly rural and
possibly based on tourism.

The alternative is to cut profit margins, but this can ultimately jeopardise the existence of businesses
and lead to services being withdrawn and jobs lost, especially in those industrial sectors where
product margins are usually very low. However, it is clear that these markets are not easy to serve in
an efficient and satisfactory manner.

The grocery and non-grocery sectors need to be considered separately when looking at this problem.

Grocery sector

When markets are very small, associations and cooperatives undoubtedly provide the best way of
developing small-scale business ventures. In other contexts, regular itinerant trade might be the
solution.




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There is therefore a need to consider initiatives to promote associations and cooperation, whether
for existing or new activities, especially when young people are involved. Associations and
cooperation can be encouraged in both the wholesale and the retail sectors.

Alone it is very difficult for a small shop to enter the modernisation process. It lacks confidence,
know-how, training and financial resources. A sort of partnership promoted and managed by a
professional wholesaler or by an independent institution has on many occasions been the response to
the loneliness and “fear of change” experienced - a way of achieving the right support in
management problems. In addition to direct support in the modernisation of equipment and
concepts, being “associated” to a group improves purchasing conditions and gives access to private
label products. Apart from price and product positioning, the partnership will also reduce logistics
costs and develop marketing activities and special training programmes. The basic condition is to
formalise the agreement through a balanced contract, ensuring equity among the parties, setting
objectives, obligations and paybacks, and laying the basis for rules of conduct. Through this
partnership, partners will increase in efficiency and competitiveness.

In short, the main best practices analysed by the working group concerned the following areas:

•   Development of information technologies;
•   Physical outlet improvement (new store equipment, including storage of cold products, etc.);
•   Definition of price strategies in order to decrease the price differential compared with big
    retailers to a maximum of 10%-15%;
•   Assortment improvement (ex: fresh and frozen products, private labels, etc.);
•   Development of marketing activities;
•   Development of multi-service shop (with lottery, medicines, post services, home deliveries,
    etc.);
•   Vocational training.

To develop these best practices in other contexts also, specific incentives are necessary that could
take the form of financial help (subsidies and bank guarantees) for structural investment
(refrigeration units, shelving, computer hardware and software, electronic tills, bar code readers,
etc.) or consultancy (for marketing, merchandising, management, etc.), with the aim of encouraging
small-scale ventures in the general grocery trade.

European governments are very interested in preventing the closure of local rural stores, as they are
the centre of life for many villages, provide other public services and prevent a rural exodus and
unemployment. They also attract other forms of activity, because it sometimes happens that the loss
of the grocery store means the closure of post offices, schools and other services; but it is necessary
to provide financial assistance in order to modernise local stores. This could also be done using the
Structural Funds, as in Portugal (PROCOM programme).

Non-grocery sector

The categories of goods that consumers may need (as non-routine but essential purchases) in this
sector are so varied that it is difficult for one business to supply them all, unless there are adequate
market conditions and enough management and financial resources available to warrant suitably
large-scale ventures.




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The operating risks would be high, however, and the costs stemming from likely inefficiency as a
result of low stock turnover would ultimately result in higher prices, which would make things
difficult for consumers with limited economic resources.
One solution would be to reduce the range and variety of items, but this could adversely affect
customer satisfaction. It is for these reasons that large business operating branches seldom invest in
such ventures.

On the other hand, ventures based on associations could in theory find a market niche, even though
in actual fact forms of association dealing in generalist, non-grocery items are not very developed.
Small specialist non-grocery stores could join associations promoted either by industry
(franchising) or by the wholesale sector (voluntary unions and centralised purchasing). But if
markets are too small, there is a risk that low stock turnover can jeopardise overall profitability and
cause the venture to fail. This risk would be lower if independent, small, generalist, non-grocery
stores could be set up.
Support schemes could be considered in this connection, either for existing firms beset by
increasing difficulties or with the aim of encouraging new business ventures, especially by young
people (2). And if all this were not enough to create efficient small local stores in specific markets,
there could always be efforts to encourage itinerant trade. In Italy for instance, and especially in the
non-grocery sector in the south of the country, itinerant trading still plays an important part in
scattered markets where operating from a fixed location offers little appeal in economic terms.

There would nevertheless be a problem of stock. Since the various categories of goods would not
account for very much in value terms, it would be difficult to obtain them directly from producers,
even small producers (unless they were items produced by the craft industry). Each retail outlet
would have the problem of finding one or two specialist wholesalers that could satisfy its particular
requirements (quality and variety) at competitive prices.
This would involve costs in terms of research and logistics, and these would be passed on to
customers. These costs of course go up, as the frequency of replenishing stocks increases and the
average expenditure per shopping trip is low.
The right conditions could be created, either by regrading and repositioning existing wholesale
centres or by encouraging the development of new planned wholesale central locations (3), so that a
range of independent wholesalers could operate with maximum efficiency while providing a joint
range of items and services (see best practice ....).




(2) The following national and Community channels could be used to encourage such support schemes (only examples relevant to
Italy are given): Law No 44/86 (entrepreneurial activities by young people under the age of 35): this law could be extended to the
distributive trades, as for tourism (Law No 236); Law No 215/92 (entrepreneurial activities by women): now applicable to all
economic sectors; MOP for industry: this opportunity could also be extended to the distributive trades and to tourism; Law No
548/95 (pending implementing regulation for several years): providing special aid for retraining schemes for the distributive trades in
less-favoured and rural areas; Law No 488/92: there is a project to extend it to the distributive trades; L. 1329/65, Law Sabatini (to
buy vans): just applicable to all economic sectors; Law 341/95 (at the moment without funds for distributive trades); Law 449/97:
small incentives for equipment renewal in small businesses (no more than 25 000 of investment) and in commerce (see Annex 5 for
more details). As we said before, Portugal has for several years had a special European Community programme, named Procom,
which is totally dedicated to the distributive trades.
(3) In Italy there is a specific law - No 41 – that supports such ventures.




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This joint approach, even simply as regards location, by undertakings with the wholesalers
remaining independent (a major asset for the marketing effectiveness of the whole system),
naturally represents a very favourable factor in achieving economies of scale in providing customer
services and facilities (parking, safety, joint advertising, appeal of premises, etc), but especially with
regard to logistic, marketing and financial services.
If retail buyers are to be spared the time and effort of shopping around for items, there must be a
wide and comprehensive range of items in one single location. Although the range of items would
naturally depend on the sectors present - there could be wholesale centres specialising in a particular
sector or category - and on the number of outlets operating in each sector: the more independent
specialist undertakings there are, especially in the non-grocery sector, the greater the potential for
providing retailers with "value" for money.

These benefits can be supplemented by others, equally important, which could result from more
cooperation by independent undertakings and efforts aimed at gradually merging activities other
than premises and structural organisation (e.g. storage facilities, car parks, safety, advertising, joint
involvement in trade shows, landscaping, etc).
The first experiments could tackle retailers deliveries, for example. Co-ordination among
businesses could allow retailers to "pool" their purchasers at a wholesale centre, with the result
that a single delivery would cut down transport costs and make a notable contribution to curbing
the environmental cost of road transport.
It is definitely true that sharing premises can encourage synergy of action in this way (through the
pooling of information), but also at a higher level (with the development of a marketing identity,
special offers, etc).

The question is whether all this could still apply to circumstances in which wholesaling has almost
disappeared (France), where industry is organised in a very concentrated manner (above all the
food industry) and where small independent retailers are steadily losing their share of the market
(where mass market distribution groups are very concentrated).

Wholesaling and retailing in European community countries

There is no doubt that independent retailing is losing its share of the market throughout Europe. But
although the future will bring the figures in every Member State of the European Union close to
those in countries such as France and the United Kingdom (even though this will not happen
overnight), a significant proportion - between 20% and 25% in Europe - of the non-grocery trade
and a non-marginal proportion of the grocery trade, confirms that small independent distributors
are still very important, especially in regions with a low population density.

If this scenario is to be believed, there will certainly be considerable economic potential for
wholesale services, whether operating independently or in conjunction with producers or with the
retail outlets served.
As far as production sectors are concerned, for many years now the growing demand for variety and
product innovation has challenged assembly-line models of production and prompted firms to
experiment with outsourcing and downsizing to ensure a more flexible market response and ally
efficiency with a more customised approach in order to satisfy customers (4).

(4) In Italy these features have resulted in the development of non-grocery activities by producers in sectors such as clothing (textiles,
ready-to-wear, footwear, underwear, etc.) and in other sectors where fashion plays a less important role, such as ceramic tiles,
furniture, fitted kitchens, upholstery, bathroom fittings, etc.




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Efforts could be made to encourage small retailers, operating in specific markets, to promote single
purchasing centres, or to encourage wholesalers, with specialisation in different goods and in
specific market areas, to concentrate sales outlets at a single location and to experiment with
marketing and logistic planning ventures in their own catchment areas.
By co-ordinating the activities of undertakings, it would be possible to arrive at combined
operations for transport and distribution, with all the resulting economic and environmental
benefits.

Other initiatives, providing a closer proximity service and making it easier to shop around and to
compare items without even having to leave the premises are certainly mail order sales via
catalogues (printed or computerised) or via salesmen (agents or representatives). These are
concepts, which are showing signs of great vitality and potential, but there are still many problems
to be solved, especially in the case of clothing (since it is impossible to try on items) or fashion
items (since it is impossible to have a close look at fabrics, colours, designs, etc).

Contact:

Roberto Vona (see page 8).




                                                                                                184
Annex 2: Summary of the findings and conclusions
            of Working Group A
Objective:


Working Group A had the task of visiting EU Member States to find out which business formats are
viable, either independently and/or in combination with various services, in rural areas with a weak
structure (within different national contexts and parameters), and have a chance of survival even
given the progressive concentration in retailing and changing living conditions and expectations, as
regards both supply policy and social aspects.

Since the concept of a rural area in a structurally weak region as defined for the purpose of the EU
objective regions is very broad, the working group concentrated on small towns or villages with a
population of up to 2000 in regions with a low population density, as its basic guideline. This is
where there is a special need to take action, since shopping facilities in places smaller than this have
already vanished or are barely commercially viable as a source of income.

Owing to the composition of the working group, the findings are confined to Finland, the
Netherlands, France and Germany. (The full-length report lists the group members and the places
visited).

The information was obtained by visiting selected model cases in the individual countries and by
numerous discussions with experts on trade, chambers of commerce, retailers’ associations and
local politicians, and by drawing on the results of existing studies.

Results
There are three identifiable ways to maintain and strengthen the provision of shops and services in
rural areas of Europe:

1.    Conversion of existing shops to modern multi-service shops (neighbourhood shops);
2.    Cooperation between retail shops in fixed locations and itinerant traders and markets, to their
      mutual advantage;
3.    Regular visits to villages (with or without a fixed sales outlet) by itinerant and market traders.

The exploitation of synergy effects derived from the cooperative approach needs greater
inspiration and motivation, because prejudices must be overcome and the advantages are not
universally recognised.




                                                                                                    185
1.      Neighbourhood shops
The concept of the neighbourhood shop as the static form of distribution is accepted in all countries,
and can be expected to make a profit of some kind in sparsely populated places. Initiatives of this
type have been developed and implemented independently in France, Finland and Germany (cf. the
full-length report). There is more extensive documentation on this in Germany5 and in France6.
Those publications provide details of the experiments briefly described here.

All countries take a neighbourhood shop to mean a food retailer which also offers additional
services which can be operated by the shop-keeper. For viability reasons, it is extremely important
for all the services offered by one operator (and his staff) to be available under one roof.

Likely additional services include a post office, bank, lottery agency, mail order service, party
service, delivery service, depot for parcel deliveries etc. The neighbourhood shop is not a rigid
concept: the range of services can be extended at will, and should be geared to the local situation
(area, operator, other services available) and actual demand. In other countries there are actually
neighbourhood shops combined with a petrol station and an importing business (an example from
Finland is described in the full report).

The neighbourhood shop is based on food sales because, for localities of this size, that is the only
type of goods for which there is sufficient demand to ensure a basic income. All the services help to
increase the income achieved and minimise the loss of purchasing power from the locality by raising
the frequency of visits by customers.


Apart from the services, the second important factor in favour of the neighbourhood shop is the
rejection of the negative image of the old-fashioned corner shop. The neighbourhood shop is a
small, modern shop which is run on a commercial basis but, unlike the larger supermarkets,
maintains much closer links with its customers. It must also put this across to the customer. Equally,
it should be the place to come for news and information in the village, so that it also performs an
important social function. In this connection, the shop should meet the following requirements:

♦    The shop should be set up as a self-service store

♦    The range should be attractive, and should not just cover everyday requirements; fresh
     products (especially fruit and vegetables) are essential to secure customer loyalty.

♦    The goods must be attractively presented and easy for customers to find.

♦    The sales area must be well-lit; dark corners should be avoided. There must be sufficient
     space to move around between displays.


5
  PLANCO Consulting GmbH, Neighbourhood shops 2000 as the service centre for rural areas,
Essen-Bonn, 1996, published by the Federal German Ministry of Regional Planning, Building and
Urban Development (obtainable from PLANCO Consulting GmbH) and ZAROF, Feasibility study
as a preliminary study of concepts prior to the project “Implementation of an innovative service
concept to strengthen and revitalise the rural retail structure in villages with a population of less
than 1 500, using the potential of co-operative associations, based on the example of the PUG Vario
Kauf e.G. Salzwedel”, Leipzig 1997.
6
  Publications by the French ministry of economic affairs and UCCIMAC.




                                                                                                  186
♦    Deliveries of goods, especially fresh products, must be guaranteed.

♦    The shop should open both mornings and afternoons, even in a small village.

♦    The shop must operate an active marketing policy with specific sales promotions.

To satisfy these minimum requirements, the recommended sales space for villages with a population
of up to 1 000 is 120 to 150 m2, and up to 300 m2 for larger villages.

All countries acknowledge that, even with a neighbourhood shop, it is not possible to operate a shop
from permanent premises in every small village. Food stores without additional services are viable
only if the catchment area contains a population of around 1 200 -1 500 or more; if services are
added, the minimum catchment area can be reduced to around 700 or 800 residents, or in some
cases even 500 if certain additional circumstances apply (provision of cheap premises, low
investment costs, etc.), which can increase commercial viability. In the end, however, the deciding
factors are always the actual local conditions and requirements and the political will of the local
authority decision-makers.

The success of a neighbourhood shop depends very much on the actual situation as regards
competition. Thus, the neighbourhood shop should be at least 8 - 10 km away from major retailers
with an aggressive policy on competition and pricing. In tourist regions the conditions are much
more favourable for setting up a shop than in purely agricultural areas. Here viability can be
achieved in some cases even if the basic situation is less favourable. The stronger the competition,
the greater the importance of having a modern-style shop.

While it is true that people in Finland, for example, are far less concerned about modern shop
design and a more attractive presentation than those in western Europe, owing to the regional
characteristics and much poorer accessibility there is far greater focus on the use of modern means
of telecommunication (PC, Internet, etc.) in the shops. This development is still in its infancy in
western Europe. Here, greater use of EDP is hampered because operators lack the know-how; in
Scandinavia, going by the example of Finland, people are far more at home with the technology.
Here, EDP is used for analysis of business figures, ascertaining stock levels, placing orders and co-
ordinating marketing concepts. For the same reasons, e-commerce is also far more common in
country areas in Scandinavia than in western Europe.

In France, Holland and Germany, experiments have taken place in more densely populated areas,
some of which are very mountainous (as in France) and have a high density of shops. Here,
customers are not necessarily dependent on their local shop, because there are other shops within a
maximum range of 5 to 10 kilometres. In such areas, neighbourhood shops should be seen as a
marked improvement in the quality of local facilities for residents, and not as a way of dealing with
decline. They offer a good way of avoiding the danger of marginalising rural populations.

However, in Finland’s sparsely populated regions the situation is different. Here it may very well be
that the last source of supply is closing down and residents must then travel 50 or 100 km in some
cases to reach the nearest shop. Even in sparsely populated regions, however, the concept of the
neighbourhood shop has been successfully implemented. Here it is far more important as a source of
supply than in the more densely populated areas of western Europe. The fact that it has been
implemented in such different types of region shows that the concept of the neighbourhood shop is




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universally applicable and could also be implemented in Spain and Greece for example (including
the Greek islands and Epirus).

However, the concept cannot solve every problem. Small villages below the threshold of viability
will continue to have to manage without a static shop. Here we can only hope that
a) mobile shops can take over this function; or
b) small shops can be set up in houses or garages, as in the case of Heimbach (Hessen) taken as the
PLANCO model.

In Germany and France the concepts were developed via local authority initiatives (in Germany this
concerned the former Ministry of Regional Planning, Building and Urban Development, in France it
was the Ministry of Economic Affairs in collaboration with the chambers of industry and commerce
in the country); in Finland, private operators took the initiative, and retail chains such as KESKO, in
particular, have made an effort to propagate the neighbourhood shop concept.

2.      Cooperation between markets and permanent shops
Markets are of only limited use as a regular source of supply for all the needs of a rural population,
since they are not held continuously in one place, nor do they generally operate all day.

However, markets can provide a boost which strengthens permanent shops - including those
operated in the form of neighbourhood shops. Impressive examples of how permanent shops can
also benefit from more frequent markets were seen in Holland and are described in the full report.
UECA surveys show that the turnover of permanent shops - even in small villages - is up to 40%
higher on market days than on other working days owing to the increased level of custom.

As a rule, larger towns with a population of 5 000 or more hold regular weekly markets. By
establishing similar - but smaller - markets in smaller places, too, where possible in the immediate
vicinity of permanent shops, it is possible to secure a larger share of purchasing power and increase
turnover. The increase in the quality on offer is a welcome side effect for the villages or towns
concerned.

Itinerant market traders specialising in particular goods not available in the permanent shops should
be used to set up such markets. The selection of traders can be taken on by a “market manager”
(whose role is performed by the local mayor) in accordance with the Dutch model.

On the basis of experience in the Netherlands, and assuming that the permanent shops achieve a
30% increase in sales on market days, then the cooperation between a market and a neighbourhood
shop alone can be expected to generate a 5% increase in annual turnover. That is around
EUR 25 000 extra on turnover of EUR 0.5 million. Furthermore, itinerant market trading can be
expected to generate economic effects, though these cannot be specified in more detail owing to the
lack of empirical evidence.

3.      Itinerant traders and market traders
Itinerant traders and market traders have a definite place among business formats. Their importance
to the customer in the marketing system is greater the smaller the local population. In many small
villages, itinerant traders are the only source of important supplies, especially fresh products (meat,
sausages, bread and baker’s wares, fruit and vegetables).




                                                                                                   188
It is also possible to consider setting up fixed locations for markets in rural areas where markets are
held for a number of towns and villages at set intervals. However, that requires cooperation by local
authorities via a suitable association (in Germany we saw the example of the Kläden administrative
association in Saxony-Anhalt, formed by 13 local authorities). Here, too, itinerant and market
trading performs the function of providing social contact.

Recommendations
The working group assumes that in rural areas in the EU Member States (at least in small villages
with a population of under 2 000) there is a need to take action in order to preserve basic facilities or
also establish new ones, both to supply the population and for social reasons. The aim should be to
maintain or set up a neighbourhood shop in accordance with the principles defined above in all
places where commercial viability can be guaranteed and to ensure its survival by further supporting
measures, such as the establishment of markets.

On the basis of its findings in the countries visited, the working group submits the following
recommendations, but these are not addressed solely to the European Commission (DG XXIII); they
are also meant for the local or regional authorities concerned (provincial, district or regional
authority) in view of their close contact with the area.
The recommendations of the working group are set out according to the various addressees:

1.      Local authorities
Where supply facilities are inadequate, local authorities should define their supply problems and
take the initiative in solving them. That is the only way of clarifying whether:

♦     a gap in supply facilities is regarded as a serious problem; and
♦     both tangible and intangible support can be provided to solve it.

If a local authority identifies a gap, it should itself take charge of seeing how premises can be made
available for setting up a shop, and even take the initiative in finding someone to run it. The local
authority must always be prepared to make material concessions to confirm its declared interest in a
shop.

The local authority may support the operator by financial assistance and by providing premises at
low cost. It may also consider whether it should help the operator to set up the shop. In cases where
the local authority provides financial support, it should ensure that it retains ownership of the
property in the case of failure, so that the shop can continue at little expense if another person can
be found who is interested in running it. These are the essential cost items which affect the
profitability of a neighbourhood shop.

The establishment of markets can be encouraged by providing premises or by relaxing conditions.
These activities can further enhance and improve the quality of village life. Where there is an
association of local authorities, the burdens can be shared among a number of villages.

However, before launching any initiative the local authority should obtain an expert report on the
establishment of a business, explaining the chance of commercial success at the particular location
in that catchment area. This report should be funded by the local authority and can be made
available to the potential operator to answer subsequent financial questions.




                                                                                                     189
If no premises are available, then local authorities must also consider the possibility of erecting a
new building. In view of the high investment costs, it will not usually be advisable to build a new
shop. However, in some situations a new building might be an option, namely if it has already been
decided to build a community centre or administrative building and the shop can be incorporated in
the overall project.

If the expert report is favourable to the establishment of a shop but a private operator cannot be
found, the local authority may take over the operation of the shop itself. There are successful
examples of this in Germany (Sargenroth in Rhineland Palatinate and Hutten in Hessen); they are
described in the PLANCO report.

2.     Regional authorities
Apart from the local authorities, regional administrative agencies can also be a valuable source of
help. This means not only district, provincial and regional authorities, but also national authorities.
The following support options are available at regional level:
 •    establishment of aid programmes to support local authorities wishing to set up shops, since
      local authorities often lack the financial resources to set up new shops
 •    establishment of aid programmes to support local authorities wishing to set up shops, since
      local authorities often lack the financial resources to set up new shops
 •    funding for continuous guidance or possibly the exchange of know-how for private operators
 •    integration of itinerant trading and markets
 •    establishing contact with agencies providing post office or lottery services, for example, and
      support for the incorporation of such services
 •    provision of resources for setting up studies, compiling statistics, etc.

In many cases, neither private individuals nor local authorities are in a position to finance the setting
up of new shops themselves. Also, the likelihood of making a profit is very low in relation to the
effort put in and the initial commercial risk, so that government support in the form of knock-on
financing helps to minimise this risk and increase the chances of implementation.

However, aid should be provided only for measures in places with a population of up to 2 000, and
then only where the local decision-making authority accepts that a shop should be set up and there is
evidence that it would be commercially viable, at least in the medium term. This evidence need not
be provided in the case of existing shops where measures are being taken simply to improve the
supply situation. Where an aid programme is set up, the following points should be borne in mind:

Þ     Measures to set up or preserve permanent shops, mobile shops and market facilities should
      form part of long-term development plans of local authorities, associations of authorities or
      regions.

Þ     Local authorities and/or the private operators should be involved to an appropriate degree in
      the creation of new shops or the preservation of existing ones. Their material input might
      represent 30 to 50% of the total costs. In order to reduce the risk, there should be an upper
      limit of EUR 100 000 on aid for new investments, with a maximum of EUR 30-40 000 in the
      case of rationalisation and modernisation.




                                                                                                     190
Þ    Aid should be available for building work, internal fittings, EDP equipment including modern
     information technologies, point of sale terminals, initial stocks of goods and expenditure on
     planning and preparation (feasibility studies, proposed measures, etc.) and training for the
     operator. The feasibility studies should also examine whether the potential operator is suited
     to the activity.

Þ    Aid should be available for all measures to expand service functions.

Þ    Aid should be available for setting up or developing markets and fitting out mobile shops if
     they serve predominantly rural areas.

Þ    Measures supported in the case of permanent facilities (by analogy with itinerant trading and
     markets) should take account of the local competition situation and must not endanger the
     survival of comparable shops. Projects outside built-up areas (in the open country) should be
     ruled out on urban development and traffic planning grounds, even on this scale.

Þ    Evidence of the operator’s commercial aptitude is essential for aid to be granted, because it is
     the main factor determining the success of the measure and long-term survival. This does not
     mean experience of retailing - even over a number of years. What it means is specific training
     focusing on marketing (e.g. how to deal with customers, advertising strategies and
     promotional measures, etc.) rather than tax law and book-keeping. This should enable the
     potential operator to develop his own advertising strategies, keep them under constant review,
     and constantly question and develop his marketing approach.

These aid criteria could be backed by other measures on the part of the regional authorities
(chambers of commerce and federations).

What is needed is continuous training for the shop-keeper - including during the operating phase. In
Holland the market traders’ association has had great success with such continuous training
programmes. In France, the chambers of industry and trade take on such functions. Similar
programmes should also be implemented via associations or chambers of industry and commerce
with the support of regional agencies in other EU countries. Such measures are becoming
increasingly important as competition becomes fiercer.

In addition, groups should be formed at district or provincial level with the operators concerned,
meeting at least twice a year to discuss experiences. These groups should be chaired and run by
chambers of industry and commerce; however, an experienced adviser should act as the chairman.
Surveys in Germany have shown that exchanging ideas in this way can lead to better results. It
should be compulsory at least for all operators receiving aid to take part.

The concept of the neighbourhood shop proposed here for widespread implementation requires a
number of service providers to cooperate with the person operating a food shop. However, in many
cases it is found that these service providers - which are often state-owned agencies or monopolies -
are not very interested in setting up neighbourhood shops. That is why the regional authorities need
to step in at this point and make it possible for such concepts to be actually implemented. This is
just as important as financial aid, since otherwise it is not possible for the concept of a
neighbourhood shop to be put into practice and it will be difficult or impossible to maintain food
shops in rural areas.




                                                                                                 191
Apart from these measures, it is also necessary to continue developing the idea of the
neighbourhood shop and provide further empirical data on which decisions can be based. For this
purpose, further studies are needed, on the subject of the situation in rural areas and the continued
development of existing concepts. Such fundamental work cannot be taken on by local authorities,
nor by associations or other institutions in most cases. As a rule, it is for the state to make such basic
data available to public and private institutions. Furthermore, there are no statistics available on
small shops, and particularly itinerant traders and markets. There should be further initiatives to
finance and support such activities. In the case of markets in particular, there is a lack of statistics to
clarify their importance.


On the basis of our findings, the following topics should be examined:

1.    Tackling other deficiencies: It is not only the supply of foodstuffs and post office, banking
      and lottery services that are at risk in small villages. For example, local authority services and
      other services are also provided in such places. Existing solutions are based on total subsidy
      by the public authority, which means that they cannot be implemented on a large scale for cost
      reasons. Ideas for a private sector solution to these types of problem have nevertheless already
      been developed by PLANCO Consulting and discussed with the regional ministries.




                                                                                                       192
2.    Solving the wholesaler problem. It is difficult for neighbourhood shops to obtain supplies
      from wholesalers. As a rule, they are not really willing to supply small retail units, and they
      impose penalties in the form of high delivery charges. For that reason, in 1996 PLANCO
      devised a cooperation scheme on behalf of DG XXIII and the Land of Brandenburg whereby a
      number of private shop operators obtain supplies from wholesalers on a cooperative basis to
      improve both delivery facilities and terms. The information required for this purpose is to be
      obtained by using EDP; greater use of EDP could also reduce the work entailed for operators.
      At the time the scheme could not be implemented for various reasons.

3.      European Commission:
Þ     In the EU there are a great many national initiatives which could not be examined in full even
      by the working groups set up. For that reason the EU ought to take over the co-ordination of
      the exchange of information. This could be done as follows.

     1.   Publication of all working group reports.

     2.   Establishment, financing and running of an Internet site concerned purely with rural areas
          and setting out all types of best practice, initiatives, contacts, addresses, old and new
          research projects and all relevant aid programmes, etc. The experience gained can be
          made available to a broad public easily and quickly via the Internet. Ideas for research
          projects could also be developed here.

Þ     The basic provision of goods and services in rural areas cannot remain purely a matter for DG
      XXIII. If shopping facilities in rural areas are to fulfil the important role rightly defined by the
      European Commission in the green paper on “Distributive Trades” and taken as a basis by the
      EC working groups, they must be included in all the EC’s fundamental strategies for
      development in Europe.

Þ     In order to achieve this in practice, commerce (including itinerant trading and markets) should
      be included on the same terms in existing programmes in connection with the reform of the
      European structural funds, and also in on-going or new European Union aid
      programmes/Community initiatives which in any case are geared solely to the development of
      rural regions with a weak structure (LEADER and village revival).

Þ     Aid should also be available for studies, empirical research (including research on the
      organisation of commerce in overall regional development plans and linked projects, e.g.
      regional traffic flows, etc.), the work of groups exchanging findings at national and
      international level, conferences on the development of commerce in rural areas, and regional
      marketing/village management back-up.

Þ     The collection and presentation of statistics should be radically improved throughout the EU
      so that small retail shops run by their owners, and especially itinerant trading and markets, can
      be evaluated and classified by experts.




                                                                                                      193
Þ    Award of an EC “Quality Seal” throughout the EU for measures to promote businesses in
     rural areas if European aid programme funds have been used for the purpose and minimum
     requirements are met, including evidence of the operator’s aptitude.

In this way, the work of the EU should, in our opinion, concentrate on supporting regional
initiatives, the co-ordination of all existing and future initiatives and possible new approaches and
ensuring that retail trade is accorded its rightful place in the future.




                                                                                                 194
Annex 3 : an example of the budget necessary for
 developing the basic technical equipment for a
  grocery shop of 200 and 400 square metres

        ESTIMATED COST FOR EQUIPPING A 200m² FOOD-STORE


  1/   Self service dairy counter, 5metres
       2 - 2.5m units
       Compartment + 4 levels                            5 800
               Refrigeration unit                        7 600

  2/   Butcher’s counter, self service cold meats
       1 - 2.5m unit
       Compartment + 3 levels                            3 000
              Refrigeration unit                         7 000

  3/   Cheese counter
       1 - 2m unit
       Glass-fronted with base                           2 400
              Refrigeration unit                         7 000

  4/   Frozen-foods unit
       2 - 2m compartments                               3 300

  5/   Wall-mounted fruit and vegetable display, 5 metres
       Height 2.2m – Depth 1.00m
       Mirror on upper section
       Lighting                                           2 800

  6/   Portable cold room                                8 400

  7/   Bread counter
       1 - 1.33m unit                                      230

  8/   Wall units
       Height 2.2m Shelf depth 1.33m
       Compartment + 4 shelves
       15 - 1.33m units                                  3 000

  9/   Island display units
       Height 1.95m – Length 1.33m
       Compartment + 4 shelves
       14 - 1.33m units                                   3 800




                                                                  195
10/    End display units
       1.30m units
       20 x 63 compartment
       Compartment + 4 shelves
       3 - 1.3m elements                   730

11/    Check-out units
       2m long not including conveyor
       2 x 2m                            2 300

12/    Basic gate                          335

13/    Trolleys (15)                      760

14/    Flower counter, 2 metres           380

15/    Ham slicer                       1 200

16/    Cold drinks unit
       Length 1.89m – 4 shelves         2 800


                    TOTAL INVESTMENT    62 835


Not included: Scales
              Cash registers
              Computers




                                                 196
      ESTIMATED COST FOR EQUIPPING A 400m² FOOD-STORE


1/   Dairy unit, self service cold meats counter
     4 – 2.5m units
     compartment + 4 shelves                       11 600
            Refrigeration unit                     10 700

2/   Refrigerated unit – 4th category
     (vacuum-packed vegetables)
     1 – 2m unit
     compartment + 4 shelves                       2 700

3/   Traditional shelf line-ups: Butcher
     Cold meats, Cheese counter
     4 – 2.5m units – glass-fronted with base       9 900
            Refrigeration unit                     10 700

4/   Frozen foods unit
     6 – 2m compartments                           10 000

5/   Wall-mounted fruit and vegetable display
     Height 2.2m – Depth 1.00m
     Mirror on upper section
     Lighting
     10 metres + corner section                     2 800

6/   Fruit and vegetable island, 5 metres
     Height 160, depth 80 + 80
     Poster holder                                  3 000

7/   Portable cold rooms
     a) meats
     b) fruit and vegetables                       16 800

8/   Bread counter
     1.33m unit                                       230

9/   Wall units
     Height 2.2m – Length 1.33m
     Back filled 2.2m – Low standing
     Compartment + 4 shelves
     32 – 1.33m units                              6 300




                                                            197
10/    Island display counters
       Height 1.95m – Length 1.33m
       Compartment + 4 shelves
       47 – 1.33m units                                            12 900

11/    End display units
       1.30m modules
       20 x 63 compartments
       compartment + 4 shelves
       8 – 1.3m elements                                             2 000

12/    Panelled end display unit
       with scales position for the fruit and vegetables section      840

13/    Check out counters
       2m long without conveyor
       2 – 2m                                                         760

14/    Basic entry gate
       + guiding bars
       7 x 1.3m
       2 x 1.3m                                                      1 000

15/    Shopping trolleys
       125 litres
       30 metres                                                     1 900


                               TOTAL INVESTMENT                    104 130


Not included: Scales
              Cash registers
              Computers




                                                                             198
 Annex 4 : an example of the budget necessary to
develop an information system for a grocery shop
          of 200 and 400 square metres
                     200m²            Costs           400m²               Costs
          1 cash register with              2 cash registers +
          optical bar-code reader +         connection kits               5 000
          product file memory and
          computer connection.
          Installation, training and
          after sales service        2 400

          Pentium MMX computer               Computer                     1 150
          Screen - 2.1Go Hard
          disk. 16Mo RAM –     1 150
          Mouse
                                             Printer                       460
          Laser printer               460
          Labels +pre-printed
          forms                       760    Software                      760

          Software                    760    Bar-code reader               760

          Bar-code reader             150    Modem                         150

          Modem                     2 440    3 scales                     3 660

          2 scales with printer       310    4 price-labelling machines    610

          2 price-labelling
          machines

           (VAT excluded)           8 430     (VAT excluded)              12 550




                                                                                   199
Annex 5: further details on the principal sources of
  finance in Italy for distributive undertakings
  (Principal legislation by Italy and Region of
                    Campania)

                                                       Table 1. National Laws

   REFERENCE           ACTIVITIES ASSISTED              BENEFICIARIES IN                 ASSISTANCE                        SOURCE
                                                             CIS SYSTEM
Law 394/91             Finance for programmes of      All SMEs (usual size          Medium-term finance is         Ministry of Foreign Trade
                       commercial penetration         limits) deciding to           provided (5yrs + 2 grace
                       outside EU: establish sales    implement an international    yrs) at rate 40% of market
                       networks; customer assis-      development strategy          rate (Ossola Law) up to
                       tance centres (storage,                                      85% of global cost planned
                       representation studies,                                      in programme with ceiling
                       etc); market studies,                                        of 3bn Lire (raised to 4bn
                       advertising, etc.                                            if programme is for
                                                                                    creation of permanent
                                                                                    structures exceeding 30%
                                                                                    of total costs)
Law 227/77 (the        Support for international      All SMEs (usual size          10-year assisted loans         Ministry of Foreign Trade
Ossola Law)            development                    limits) deciding to develop   varying by country of
                                                      foreign sales                 export;
                                                                                    Partial cover of credit risk
Law 548/95             Line 1: develop logistical     All SMEs (size limits are     Differs according to           Ministry of Industry &
(implementing          systems for distribution,      lower) with following         scheme and area: general       Commerce, through
Regulations expected   and telematics networks        characteristics:              provision for Naples is        Mediocredito
in September)          for shared operation of        - firms in wholesale and      outright grant of 40% of
                       services;                      retail commercial trade;      NGE and 15% of ESL of
                       Line 2: upgrade tourist        - tourist firms;              capital for schemes
                       and commercial provision       - voluntary bodies mostly     expecting costs of between
                       from smaller firms, inter      of tourist and commercial     200 million and 2bn Lire
                       alia by integration with       firms engaged in shared
                       other economic sectors;        operation of services for
                       at home and abroad create,     members
                       promote and market poles
                       or packages to upgrade
                       local economic,
                       environmental and cultural
                       resources;
                       Line 3: upgrade tourist
                       and commercial activities
                       in city centres and
                       outskirts and in rural areas
Law 341/95 (Art. 9)    Reduced-rate finance to        All SMEs (usual size          Up to 4.5 percentage           Ministry of Industry &
(consolidation of      reduce or pay off short-       limits)                       points below reference rate    Commerce, through
short-term             term exposure to the                                         on finance to 6 years          Istituto S.Paolo di Torino
indebtedness)          banking system                                               (including one grace year)     (operator of Guarantee
                                                                                                                   Fund)




                                                                                                                                                200
                                                 Table 2. National Laws (cont.)

   REFERENCE           ACTIVITIES ASSISTED                BENEFICIARIES IN                 ASSISTANCE                       SOURCE
                                                               CIS SYSTEM
Law 341 (Art. 9)       - prepare and implement         a) firms in wholesale and      Projects not allowed if they Ministry of Industry &
(incentives for        innovative techniques for       retail trade;                  include investments below Commerce
commerce)              modernising commercial          b) companies, co-              50 million or above 1
                       firm’s organisation and         operatives, consortia of co-   billion Lire net of VAT.
                       supply, with particular         operatives, operational        For Naples an outright
                       reference to schemes in the     centres of voluntary unions    grant is provided of 40%
                       economic voluntary field,       and buying groups              of NGE and 15% of ESL
                       restoration and upgrading       provided they consist only     of capital
                       of city-centre trade,           of commercial firms pre-
                       business organisation and       dominantly SMEs and
                       management control;             engaged in operation of
                       - create technology innova-     joint services solely for
                       tion, i.e. acquire integrated   members;
                       IT systems for automating       c) companies promoting
                       the principal procedures        wholesale and retail
                       for company and inter-          trading centres
                       company management,
                       plus automated or robot
                       devices for moving goods
                       in store, for operating
                       order-fulfilment operations
                       and for distributing goods
                       to the public
Law 488/92, on basis   Capital projects to             Undertakings in manu-          For Naples an outright        Ministry of Industry and
of Min. Decree of      construct, extend,              facturing, extraction, and     grant is provided of 40%      Commerce
26.6.96                modernise, re-structure,        services in the INPS           of NGE and 15% of ESL
                       convert, re-activate and de-    industry sector or ‘real’      of capital
                       localise production plant       services (up to 5% of
                                                       resources).
                                                       ‘Real’ services are:
                                                       - IT services and related
                                                       services in occupational
                                                       training;
                                                       - technology-transfer and
                                                       IT-intermediation services;
                                                       - technical and economic
                                                       consultancy services
Law 215/92 (women      Qualifying investment: in       Assistance is available to     Assisted finance up to        Ministry of Industry and
in business)           industry, commerce, crafts,     cooperatives and               300m Lire, for up to 5        Commerce
                       agriculture, tourism and        associations with not less     years and interest reduced
                       services to:                    than 60% of women,             to 40% of reference rate.
                       a) start up new activities;     companies with not less        Outright grants, variable
                       b) acquire existing             than two-thirds of shares      according to area
                       activities;                     held by women and with
                       c) carry out innovative         company organs being not
                       business projects; acquire      less than two-thirds
                       ‘real’ services                 women, and individual
                                                       firms managed by women
                                                       (size limits lower than
                                                       usual)
Law 236/93             Business initiatives by         Companies entirely             Outright grants in terms of   Youth Enterprise
                       young people from the           consisting of young people     NGE and ESL varying           Corporation
                       Mezzogiorno in these            aged between 18 and 35         according to location area.
                       sectors:                        years; or with absolute        Operational assistance for
                       - exploiting cultural assets;   majority of young people       first 4 years activity;
                       - tourism;                      aged between 18 and 29         Costs allowed for grant,
                       - maintenance of civil and      years                          not more than 1bn Lire
                       industrial structures;
                       - technology innovation to
                       serve business
                       management;
                       - environmental protection




                                                                                                                                               201
                                         Table 3. Regional Laws (Campania Region)

   REFERENCE            ACTIVITIES ASSISTED               BENEFICIARIES IN                    ASSISTANCE                       SOURCE
                                                                 SYSTEM
Reg. Law 11/95 (rules   In order to enhance the        a) Exhibition organisations       Financial grants (up to        Campania Region
for fairs and           Region’s agricultural, craft   with separate public legal        70%) to high-quality
exhibitions)            and industrial products,       identity;                         exhibition events within
                        the Campania Region is         b) Trade associations             the region and similar
                        promoting schemes to           belonging to nationally           incentives for economic
                        develop the functions of       representative organisa-          operators to participate in
                        marketing these products       tions or their direct local       national or foreign events;
                        on home and foreign            units;                            Direct organisation of
                        markets, and for access to     Business consortia or             exhibition pavilions at
                        individual or associated       cooperatives;                     national and foreign fairs,
                        SMEs in the market             Idimer-type bodies;               for economic enhancement
                        circuits:                      Public bodies and associa-        of regional products;
                        a) national and                tions of public bodies            Technical assistance for
                        international shows and                                          marketing schemes;
                        exhibitions;                                                     Studies on and research
                        b) regional, provincial and                                      into exhibitions and fairs
                        district shows and
                        exhibitions
Reg. Law 28/93          Business and production        Cooperatives comprising           - Outright grants of 60% of    Campania Region
(youth enterprise)      initiatives in general,        at least two-thirds of            allowable costs (70% if
                        promoted by young people       young people aged                 cooperatives have 5 or
                        from the Mezzogiorno           between 18 and 35 years           more members or are
                                                                                         entirely women);
                                                                                         - Interest assistance at 2/3
                                                                                         of reference rate on
                                                                                         financing up to 10 years +
                                                                                         3 years grace;
                                                                                         - Grant towards
                                                                                         management costs for first
                                                                                         three years business.
                                                                                         Costs qualifying for grant
                                                                                         not more than 1.2bn Lire
Reg. Law 3/1996         Creation, approval and         The integrated programme          Grants and finance up to a     Campania Region
(Law 493/93 PRU)        execution of integrated        is a local-district initiative:   maximum of 40% in each
                        programmes of restoration      public or private persons,        chapter of expenditure
                        of landscape, buildings        singly or in consortia or
                        and environment in inner       association, may also
                        city and outlying run-down     propose these to the local
                        areas for more systematic      district
                        area improvement and use
                        of infrastructures,
                        dwellings and existing
                        architectural heritage
Reg. Law 34/81          Forms of economic              Shopping centres and              Outright grants up to 60%      Campania Region (Idimer
                        association and                forms of associated trading       of allowable costs, not        preference)
                        cooperation among small                                          exceeding 300 million
                        and medium commercial
                        operators


Contact:

Roberto Vona (see page 8).




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