Nisa Whickham pulled out all the stops to prepare for a Tesco Express opening next door. Robin Mannering examines its success
Project Fightback began in September last year when the Vadhera brothers heard that Tesco was set to invade their retail space. The store under threat, a former KwikSave in Whickham, near Newcastle, had been added to their portfolio of Nisa stores in 2008. The ambitious duo had found a successful formula and their North East Convenience Stores owned 18 stores by 2011, stretching from Blyth to Middlesbrough.
They were no strangers to challenges, having traded through two recessions, but when Tesco announced it was planning to open an Express store just metres from their Whickham store, Sanjeev and Naveem had to act to protect not just Whickham, but all its stores.
Sanjeev (pictured) says: “Tesco Express and other fascias have opened within half-a-mile of four of our stores in the past 12 months. People says it’s all about the mults, but it’s not.”
However, nowhere better illustrates Project Fightback’s cause than Nisa Whickham. Bracing for the arrival of Tesco Express, the brothers decided to revisit the Nisa Local and so completed a redesign last September, with the intention of ensuring it adhered to the company’s mantra ‘Quality, Convenience & Value at the Heart of the Community’. By sticking to these principles, they believed the store would stand a chance.
The refurbished store is heavily geared towards British products and local produce, including an abundant fruit and veg section, top customer service and community involvement. But Sanjeev realised that communicating the store’s message was key to its success.
The company had begun compiling newsletters and in-store promotions several years ago and the Fair Trade, Healthy Eating and Best of British banners, as well as the Heineken-sponsored Big Night In fixture, are all evident in the Whickham store. But Sanjeev - who is in charge of business development - has taken in-store marketing to a new level. Cartoon cut-outs of the manager are displayed all around the shop, reminding customers to ‘Ask Paul’ (Paul James, the store manager) if they have a query, or want help carrying shopping to their cars.
Size: 2,800sq ft
Opening hours: 6am-11pm
Services: Lottery, PayPoint, post office, Collect+, Costa Coffee, home delivery
“We pride ourselves on good customer service good people who know the town and the locals. It’s almost one of our recruitment policies that we can have a laugh with them and they’re going to be able to join our family,” Sanjeev says. Meanwhile, signs detail local produce, in addition to historical photos documenting the area’s history, reinforcing the store’s community ties.
A current feature is an Olympic promotion, which Cadbury is ‘partnering’. “Cadbury designs and sponsors specific pos material and we put together an event timetable and agree to drive volume of Cadbury product during the promotional period,” Sanjeev says.
So when the Tesco Express opened in February this year, the brothers felt well-prepared, but were nervous nonetheless. Their apprehension was initially justified, as sales dropped by nearly 30% in Tesco’s first week. But then a funny thing happened - the customers started coming back, so much so that sales quickly recovered and stabilised at about 10% down on pre-Tesco levels.
Sanjeev hasn’t sat on his laurels since the opening, either, having installed a Costa Coffee machine and Julian Graves health food fixture over the past few weeks, as he continues to pursue a ‘destination shopping’ ambition.
He has also stocked up on products he has picked up at events around the country, such as the Farm and Deli Show and National Convenience Show. “I’m constantly trying to push the boundaries with new products,” he explains.
When C-Store visits, the store is thronging with customers, in contrast to the Tesco Express which is almost devoid of shoppers. One of the Nisa shoppers puts it like this: “I don’t want to shop in Tesco! There just wasn’t a need for Tesco here. I like the pictures around the shop of Whickham, it makes it feel part of the community. They just seem to make such an effort here.”
A number of categories have held firm post-Tesco, including fruit and veg, which Paul buys direct from the local market. “We haven’t lost any fruit and veg sales since Tesco opened it’s a lot cheaper here,” says Sanjeev. “The manager goes out once a week to decide what he wants, which means we can be on top of seasonal activity. Buying it directly means we can control the quality, and the margins are much better - well over 50.”
Local products - which includes anything from bakery to quirky beer such as St James’ Park Bitter - are defined as coming from within 40 miles of the store. “Local has been selling really well, especially bakery products,” he says.
But there is one category where Sanjeev doesn’t try to compete with Tesco - fresh meat. He accepts that Tesco Express has a superior selection, but is confident that shoppers may go to Tesco for their meat and to him for other items. This selective shopping means the store has to stay price competitive, which is represented by a ‘Nisa Whickham price drop’ scheme, ensuring hundreds of prices are cheaper than Tesco Express, and a ‘£1 only’ promotional fixture.
Sanjeev states: “We panicked when the recession hit in 2008. We started putting in all these cheap ranges, but people thought we were devaluing our proposition. So we’ve pulled it all out and are focusing on big brands and local brands which people have confidence in. Value needs to be presented in the right manner.”
To engender loyalty the store runs a scheme which gives customers £5 off their next shop after they’ve spent £100 over a period of time.
Along with the finely tuned product range is the other weapon against Tesco - the staff themselves. Each team member has to come up with a business improvement idea as part of their NVQs the company has introduced store, manager and employee of the month awards, and staff meetings are held regularly. “We try to keep the managers involved, with the message that it’s a family business, not too corporate,” Sanjeev says.
And it is obvious that store manager Paul is passionate about his work. “Not only is he constantly engaging with his customers, but he is always analysing how people shop in the store and visiting Tesco to see how they do things. The key difference is that Tesco staff never visit our store,” Sanjeev says.
The store has also become actively involved with the local community and charities. It has helped contribute to local hospices, football teams and community projects through Nisa’s Making A Difference Locally initiative. The store ensures that its customers are aware of its community work by way of a large in-store noticeboard.
Such initiatives improve the community links and underline the store’s independence. However, Sanjeev also credits the store’s success to Nisa, with which it signed a five-year deal in 2010.
He argues that it is imperative to join a symbol group in order to survive the growth of the mults. “If people don’t move on they won’t be here in five years’ time. Unless they’re the only shop in the village, they’ll soon be out of business because the mults will be taking over everything,” he warns.
However, stores such as Nisa Whickham are proving that, with meticulous preparation and a long-sighted strategy, all is not lost. And it is this approach which won North East Convenience Stores best multiple store at this year’s Convenience Retail Awards. ■