When Zed Khan found out that a Tesco Express was about to open up next door to his c-store, he was told by many that his business was doomed.
But thanks to a combination of courage, determination and innovation, Zed’s store has not only survived, but flourished.
Turn the clock back four years or so and Zed’s store was ticking over nicely. “When we bought the shop in 2006 it was extremely run down,” he says. “The previous management had only £4,500-worth of stock when we took over.”
Zed, who had previously owned three newsagents, invested heavily in the store to bring it back to life. “We bought in about £30,000-worth of stock. The nearest off-licence and grocer was half a mile away so this was a godsend for locals.”
The store, in Bury Old Road, Prestwich, Manchester, was well supported by its customers, and it seemed Zed couldn’t put a foot wrong. “Because the last owners had run it down so much, the store was like a blank canvas everything we did was an improvement.”
But 18 months on, things took a turn for the worse. “The three neighbouring units on the parade a takeaway, hair salon and a car rental shop went up for sale. The owner asked if I wanted to buy them, but it would have cost half a million pounds and I’d just bought this business, so I couldn’t afford it.”
The units were sold to a private landlord, who submitted plans for a retail outlet and it wasn’t long before the rumours began… Tesco was coming. “Although we’d heard whispers, I only found out for definite a few weeks before it opened when the landlord confirmed it,” says Zed. “He warned me to ‘get out while you can’.”
But he wasn’t going down without a fight. “I never thought about selling up,” he says in a matter of fact way. “This is the ideal shop for me. It’s a 10-minute drive from home and the customers are fantastic.”
And it wasn’t just Zed who was against the Tesco Express opening on his doorstep. “There was already a Tesco Superstore a 10-minute walk away, and another two miles away. Customers were annoyed about the pollution, the noise, the effect it would have on parking, and the early morning deliveries.”
So Zed set to work printing protest letters for customers to sign. They were only too happy to support their local independent, and he ended up with 200 letters, which he sent to the council.
He and his customers also kicked up a stink at a planning meeting. “We took two mini- buses with about 30 customers in to a meeting in Bury.” The protest caused enough of a stir to ensure media publicity, and Zed was even interviewed by Manchester TV station, Channel M.
Despite doing everything in his power to make the council see sense, they refused to listen and gave the Tesco Express the go-ahead. However, Zed soon realised it wasn’t all bad news. “The Tesco was like a magnet,” he says. “It brought people to the area I’d never seen before.” He saw the opportunity and seized it with both hands. “People have to park outside my store or walk past to get to Tesco. I thought: ‘They’ve come to the area, so let’s get them in our store’.”
He knew he’d have to up his game considerably to ensure that the shop wasn’t overlooked. “We had been operating under Parfetts’ Lifestyle fascia for a couple of years, but I needed more support to push it to the next level,” explains Zed. “While Parfetts ran some good offers, there weren’t enough, and they weren’t on the right lines.”
He contacted several symbols to see what they had to offer, but even some of the most successful offered little encouragement. “One group told me I’d be wasting my money and there was no way I could compete with Tesco. They said I didn’t stand a chance. It really offended me.”
Other groups required too much commitment. “Some wanted 95% loyalty and I don’t like to be tied down,” he says.
Then Zed met Best One business development executive Jackie Shonn, who explained that her symbol group could offer strong promotions, but with a much lower loyalty criteria, which would give him the opportunity to shop around. Joining the group enabled Zed to give the store a refresh. “We got shelf talkers, leaflets and posters from Best One. It makes the shop look professional. ”
He extended his opening hours the 6am-7.30pm hours became 5.30am-9pm and embarked on a remerchandising project with Best One, which led to sales increases across a multitude of categories.
top tipsHow to stand your ground against the multiples
Walk your store as a customer and check your products are in a logical order
Seek to beat your competitor’s pricing on several basket essentials
Ensure you have a number of products that are different to your rival
Look at the possibility of providing additional services l Consider extending your opening hours
Talk to your wholesaler, keep them up to speed on your situation, and ensure that they are giving you the best possible support
Promotional bays were positioned by the store’s entrance so that customers immediately got a sense of value for money. Zed also re-positioned products in order to create a more logical layout. “The second aisle wasn’t being as shopped as often as the rest of the store, so I worked with Best One to come up with a solution. We put products such as biscuits and cereals down that aisle to encourage more footfall.”
The greetings card section was also relocated. “We had six card stands in the centre of the back aisle, but not every customer travelled to that part of the shop, so they couldn’t see them,” he explains. To resolve the issue, Zed replaced the cards with bathing products, because people who buy those items are generally doing a basket shop, and are more likely to walk around the whole store. He then repositioned the greetings cards to the back wall of the shop so that they would be customer-facing. “Since moving the cards we’ve seen a definite increase in sales,” he notes.
The pet care area has also seen an uplift after Zed increased a number of lines and doubled both cat and dog zones to two-metres.
Soft drinks is another category to have witnessed a sales boost since Zed changed its position. “I moved the 2ltr soft drinks next to the milk, which is one of our best-sellers. Now that they’re at people’s eye level, they are selling much better. Sometimes it’s as simple as making customers aware that we have the item.”
In fact, Zed is so convinced that category management is the way forward he revamps a category every four weeks or re-jigs the products in order to increase sales.
Sacrificing margins to offer keen prices on basket essentials is another strategy that Zed has adopted in his bid to challenge Tesco. “It’s not all about making money sometimes you have to give a little to keep customers interested,” he says.
“We buy Typhoo One Cup for 75p and price it at £1, even though it’s pricemarked at £2.19,” he says. “Warburtons Toastie Loaf is £1.20 in our store, whereas normally an 800g loaf would retail at £1.39. It costs me £1.10 to buy it, so I don’t make much profit on it, but it keeps people coming in.”
Zed also undercuts Tesco on fresh fruit and veg as his Dad goes to the market every other day to ensure they have the freshest and best-priced produce. This is showcased in a market-style display outside the store, which few shoppers are able to resist. “Obviously, there’s the wastage factor, but the fruit and veg has a good mark-up of between 30 and 40%, and it’s still cheaper than Tesco.”
As well as keen pricing, Zed stocks products that the Tesco doesn’t, such as household items. “We’ve started selling products such as dustpan and brush sets, and brooms and mops,” he says. “We can’t be identical to Tesco. They’re big on breakfast, dinner and chilled food, but they wouldn’t sell hay for rabbits, safety pins or nit combs!”
He has also taken on PayPoint, which he uses to reel in more customers. And with the support of his family his wife, brother, and daughter all help out he has not only stayed in business, but is doing better than before. “Turnover is up 19% compared with this time last year,” he grins.
He hopes to continue this impressive run with a strategy of continual development. “I’m always thinking about new ways to take the shop forward. I’m considering home delivery, and I’d like to increase my chilled range, too.”
It’s an ongoing battle to ensure the customers keep coming, so wouldn’t it be easier to sell up and do something else? Of course it would, but Zed baulks at the very thought.
“If I was going to sell the store, I would have done it before Tesco came. I love retailing it’s a different challenge every day,” he says. “When it’s your own store, you work from the heart.”