Four of our C-Store Champions reveal how they are weathering the storm of recession.
Barlby Village Stores, nr Selby North Yorkshire
Over the past 12 months, Chris has wised up to cold callers trying to convince him to change his energy contract. He now spends less time on the phone and more time managing the store.
Smiths Corner Stores, Grimoldby, Lincolnshire
Even though consumer spending is tight, David ensures that people keep coming to his store with a strong value proposition in the form of the new Super Valu range.
Eurospar Broomhill, Sheffield
Tim has his work cut out for him with two multiples about to open on his doorstep. But his store has already undergone a successful refresh this year and Tim is working with Spar to develop a further plan of action.
Today’s, Stokenchurch, Buckinghamshire
Sales of hot food to go are rocketing at Rishi’s store, where he has introduced a range of breakfast products and started baking at 6.30am to make sure he capitalises on the morning rush.
Has this year lived up to expectations from a business perspective?
Chris: Trade has been on an upwards curve for the previous two years and now it has evened out, but I can’t complain because everyone says flat-lining is the new growth.
David: Expectations weren’t great. We were looking to stay on a stable output given that last year’s sales have been steady. It’s a case of looking at your business and doing whatever you can to bolster it, manage your budget at a level of profitability and hope that nothing comes in left of field, because if it does, there isn’t the money there to deal with it!
Tim: Yes and no. There aren’t as many students going to university this year due to the hike in fees, and because we are a student-orientated store our footfall has dropped. But sales are still steady taking this into account.
Rishi: Yes, it’s been good. People are being choosy about what they buy, but we’ve been pushing lots of promotions and we’re level year on year.
What has been your business highlight of 2012?
Chris: My shop mortgage has finally been paid off, so I’m very pleased about that. Another bit of good news is that Tesco isn’t on an upward curve any more.
David: My wife Kathryn and I had been in the process of handing over the day-to-day running of the store to our manageress, but she went on maternity leave and so we had to go back to a hands-on role. We quite enjoyed doing it in her absence and promoted a trainee supervisor to supervisor to help out. The manageress has now returned to the business, which was a highlight. Another high point was that we finally got the lottery installed and it’s going rather well. At the end of the day, we want to be the village outlet offering a complete solution, and this helps us to do that.
Tim: We won Store of the Year at the Blakemore Awards at the end of September. I knew we were on a shortlist of four, so I thought we were in with a good chance, but when they actually announced that we’d won I was completely overwhelmed.
Rishi: We’ve done some good work in the community, such as sponsoring the scouts on a trip to Iceland. We got a photo of them with our banner against a really scenic background, and we’ve displayed it in-store. The parents really appreciate it and from a business perspective it’s another form of advertising.
What is the biggest change you’ve made to your business this year, and what have been the results?
Chris: If something isn’t selling well then I’ve swapped it for something else, but I haven’t made any major changes this year. One change I’m considering, though, is re-paving the area outside of the store and putting up a canopy and some chairs to create a café. I’m looking into getting one of those big Costa Express machines. Hopefully, having a café would increase sandwich sales and give local people somewhere to have a chat.
David: We renewed our electricity contract this year and managed to get lower rates from our existing supplier. We had our day, night and standing charges all lowered.
Tim: We’ve had a re-mould with fresh impulse moved to the store entrance and a new queuing system implemented.
Rishi: We’ve spent a lot on our frozen section. We bought new freezers and re-merchandised the area. We defined the product groups better so that people can easily find the potato goods, or vegetables and so on. It’s worked really well - I’m having to order lots more items.
Which area of the business has disappointed?
Chris: Crisps, cakes and confectionery are all down slightly. I’d put that down to people watching what they eat.
David: We’re below budget on tobacco. There’s a two-fold hit - more people have diminished spending because of the recession and are trading down, and premium brands aren’t selling well. Plus, there are cheaper tobacco alternatives not available through legal retailers.
Tim: As a larger store, the temporary lifting of the Sunday trading laws over the Olympics meant that we could extended our opening hours. But we didn’t really do as much business in the extra time as we had expected. I guess that was partly down to the poor weather, though.
Rishi: There are always certain promotions that don’t do as well as you expect, and some seasonal items that just don’t sell. Our Halloween items didn’t take off as well as we’d hoped.
What was the lowest point of the year and how did you get through it?
Chris: One of the two pubs in the village was struggling and so it went up for sale. When I spoke to the manager he was convinced that Tesco had bought it. I was worried, but I kept checking with the local estate agent and have found out it hasn’t yet got a buyer and is still for sale, which is a relief.
David: One of my remote chillers went down and I was quoted a repair cost of £1,500, which could have potentially been a real low point. I do have some money set aside for this kind of thing, but that was more than I’d budgeted for. However, I found I had cover for it through my Convenience Store Insurance, so we only had to pay the excess, which was much more affordable.
Tim: Finding out that I have two new competitors opening up nearby - a Tesco and a Sainsbury’s. But we’ve got a lot of strategies in place - we’ll be looking at pricing and opening hours, and running customer surveys to make sure that we beat the competition.
Rishi: The Diamond Jubilee weekend when the weather was bad did nothing for us. We were promoting party food and drink, but a lot of it was left on the shelf and we had to reduce it to sell it through.
What have your customers been telling you about their needs this year?
Chris: I believe a lot of my customers have money, and that they’re just being prudent and holding on to it. I had to stop selling flowers a couple of years ago because people didn’t want to buy premium products, and that’s still the case.
David: Overall, people have been reining in their spending because they have no choice. Builders and farmers are talking about extra costs to their businesses, which is limiting their disposable income. Lots of people have been talking about electricity costs and cutting back on Christmas spending as a result.
Tim: Everyone wants ‘eat for now’ products, which is why we have focused heavily on our impulse and fresh offerings.
Rishi: Our customer base is ABC1s so people are cautious with spending, but they do have the money. We have to make sure we have promotions, but also a good premium offering.
Which retailers or industry figures have you been most inspired by and why?
Chris: A couple of retailers I met from a Nisa store in Driffield told me about the benefits of selling bottled beer. I followed their advice and it’s done really well.
David: The retailer I always admire is Waitrose. They have a vision and they stick to it. It’ll cost you more, but you’ll get something slightly different. The other multiples are all fighting it out for the same customers.
Tim: M-Local - they’ve taken a bit of what everyone else is doing and put their own slant on it. As a business we’re taking in what our competition are doing and there are plans in the pipeline.
Rishi: Our Cuisine de France rep has given us great feedback on what other stores are doing and what can be achieved based on benchmark figures from stores of similar sizes.
Which area of the business has been most successful, and why?
Chris: I’m selling a little more tobacco than last year. I get all tobacco pricemarked, so it’s the lowest price you can buy in the country. For a long time people thought the supermarkets were cheaper, but they’re now starting to catch on to the fact that ours are better value.
David: We introduced the Londis SuperValu brand and it has done really well. We used to have premium, mid-range and value tiers, but the quality of SuperValu has meant we can remove the secondary tier.
Tim: Fresh produce - it’s a growing trend as people are visiting the store more frequently and buying products to eat that day.
Rishi: Hot food has grown as we’ve changed a lot of our products. We’re now offering bacon muffins, hashbrowns and sausages, and hot dog baguettes. Staff come in at 6.30am so there is hot food ready when the store opens.
What have you learnt most from this year?
Chris: Being more abrupt with electricity suppliers. You get three calls a day and they keep you on the phone for hours if you don’t say anything. Often, they’ll tell you they are from British Gas, but they’re actually con artists.
David: I’ve learnt to hand over the management of certain aspects of the business that I didn’t think I could. For example, I didn’t get involved at all in our Christmas confectionery order and so there are products that I don’t normally order and they are displayed differently to how I normally do it, but it looks great.
Tim: Going forward as a team and facing challenges together we can overcome any obstacles.
Rishi: Speed is of the essence when it comes to business. You need to react to changes in the sector, for example if there is a major new product launch then you need to stock it. If you don’t have what people need, then they’ll go elsewhere.