Atrip to the supermarket has gone way beyond stocking up on the weekly groceries these days. Alongside your eggs, milk and frozen chips you can add a wide-screen plasma TV, vacuum cleaner or MP3 player. But it's not just the big boys who are diversifying to pull in new punters.
C-store retailers across the country are bringing new businesses into their
traditional convenience offer, from garden centres to gift shops. Appean Sharma, who runs a Costcutter store in Eltham, Kent, has been busy buying up the other outlets on the parade of shops he trades in. It all began with the c-store on the end of the parade; he then bought the outlet next door to turn into a garden centre; and when the leased c-store at the other end was heading rapidly downhill, Appean bought that and turned it into a café by day and Indian restaurant by night.
While this might be diversifying to extremes, many other c-store retailers have successfully integrated new services into their standard convenience business. Bob Gibson, who runs a Keystore in Basingstoke, Hampshire, has branched out with a mini garden centre at the front of his store. He says: "We've always sold quite a selection of bedding plants and cut flowers, but got in touch with a supplier about a year ago who now comes in once a week to set up displays out the front of the store. It's been very successful and turnover is about £1,000 a week - more during the peak times.
"It's still in its first year so it will be interesting to see what it's like next week when bulbs and winter shrubs and baskets come in. That will be the first time we've done anything for the winter season."
Bob says customer reaction has been really positive. "Customers have been very accepting because there aren't any competitors such as Homebase and B&Q around here. We have a huge parking area out the front and the back so customers can put their plants straight in the car, or we'll stick them in their car for them. We also offer home delivery."
Customers are so enthralled by the garden centre that the store has a new busiest day. "The lorry arrives every Tuesday so people have got into the habit of coming down every Tuesday afternoon - it's our busiest day of the week now. People flock to see what new things we have - especially the more unusual plants."
One of the more out-of-the-ordinary items that have captured Bob's customers' imaginations have been lemon trees, which sell for £34.99. "It's the novelty of the lemon trees that people like - they produce full-size lemons. I've sold as many as six in one day. Ours are a good price as well - they go for £99.99 in Homebase. I say to my customers that they can sit on their patio with a gin and tonic and pick their own lemon to go in it."
Bob has even been able to sell a large azalea for £399. "The bigger things sell quicker than anything else because they're unusual. We sell a lot of shrubs between £30 and £50. It's the unusual things that catch people's attention. It's really snowballing."
Integrating the garden centre into Bob's c-store business has been relatively simple, and it's given the whole business a boost. "It's been a good spin-off. It brings people to the area and we've not had to do any advertising - it's all been word of mouth. When we serve people, we ask them to tell all their friends and neighbours."
It's a simple operation to run because the supplier does much of the hard work, says Bob. "The lorry turns up and the delivery man puts everything on the display racks out the front. We discuss the prices together, and all we've got to do is water the plants. The staff have been very supportive in looking after the stock."
Bob admits that he's lucky to have the space to store everything overnight, though. "There's a porch area at the front of the store with shutters so we move the display racks there at night. In the height of the season, when we were selling lots of hanging baskets, we had to put them in the back yard where there's plenty of room and it's secure."
Bob believes it's vitally important for c-store retailers to diversify to give them an edge against the growing competition in grocery retailing. "It's very important for retailers to try different things because here we've got a Somerfield within walking distance and a Morrisons, Asda and Sainsbury's all quite close by. You've got to diversify into things that they can't do. For example, we've got some lovely wicker hanging baskets - they're unique and it's things like that which bring customers in."
Tracy Donovan, who runs The Knockin Shop in Knockin, Shropshire, is poised to open a gift shop above her existing store and post office. It's due to start trading in time to capitalise on consumers' Christmas shopping sprees and will stock a range of gifts such as toys, jewellery, accessories and Fairtrade products including clothes, handbags, food and make-up.
Tracy has installed a new staircase at the back of the c-store to the upstairs, which has made room for an internet point, some tables and chairs and a drinks machine in the main shop downstairs.
"Our customers are all very excited about it," she says. "It's really important to look at other business areas. It's about having a strategy for what you want to do with your business. You have to introduce new things to keep some excitement about the shop."
Tracy says her store's cheeky name helps and attracts people from far and wide. It has turned the store into a tourist attraction in its own right. "We're going to be selling lots of The Knockin Shop souvenirs in the gift shop and we're now developing a website so people can order online. You have to continually re-invent your business to keep people interested. We get a lot of tourists through here who come in and ask for Knockin Shop gifts, so the gift shop will enhance that. I definitely expect to increase sales and interest."
As Tracy is new to retailing, she's taking everything step by step. "Taking over the shop last year was a career change for me, so it's all been a big learning curve. The key is to introduce new things slowly and not do everything all at once."
Nick Cooper's two Hudson's c-stores in Bow and Wandsworth in London have become very much more than convenience stores to their cash-rich, time-poor customers. Along with its well-established dry-cleaning business, Hudson's offers a full range of cleaning services - from homes and offices, to windows and carpets. The cleaning side of the business now makes up 3% of total turnover, which is on top of the 4% turnover in dry- cleaning.
Nick explains how it all works: "We take orders through the store and the staff manage the booking and deploy the resources. Each store has a small gang of cleaners. It's relatively straightforward because the business tends to be regular and so we know the volume expected. We just bring in extra resources for anything special, such as carpet cleaning."
Hudson's has 32 store staff and a further 18 full- and part-time cleaners. He used to offer a handyman service as well to carry out various odd jobs around people's homes, from fixing a leaking tap to replacing a broken window - but Nick says he's had to put a stop to that. "We didn't have enough financial control and found it difficult to verify which jobs had been done and what had been paid for, so we've drawn our horns in.
"We had a smaller core of permanent staff but one of the difficulties was that handyman jobs are irregular - the team could be too busy one day and have nothing to do the next. With the cleaning, we make sure everything goes through the stores. We have some account customers but they're usually businesses. We're very happy with the cleaning side - it's very profitable."
Nick says margins for cleaning services are about 25%. "Compared with what the industry makes overall, it's okay. Our rationale for introducing new services is that we have a finite number of customers coming through our stores so we want them to interact with us as much as possible, and spend as much money as possible. We want a good share of their wallet.
"The more services you offer, the more opportunities there are for customers to come to you and spend more money.
"You've got to provide more and more that customers can buy from you. If you do that you get more margins and develop better relationships with customers. They also come to rely on you for more goods and services. We have some customers who spend as much on services as they do on products."
Hudson's promotes the cleaning services in-store and via leaflet drops, and approaches businesses individually. "Services now make up 7% of our total turnover and it doesn't require a great deal of capital investment. Home and office cleaning services don't increase our overheads; they just increase our turnover and gross margin."
The desire to increase margins is what sparked Mohammed and Farhana Saleem to extend into catering. They run two Nisa Local stores in Isleworth, Middlesex, and Greenwich, London, but have introduced eat-in cafés linked to their c-stores under their own brand, Café Nisa.
Unlike usual bake-off operations, everything through Café Nisa is cooked to order in front of the customer. "When you're freshly cooking hot food and serving it, the return is greater," explains Mohammed.
"National margin is about 20-22%, but catering margins are almost 50% more. Retailers of hot food are usually squeezed because they're considered as commission agents, but when you put the gloss on it by cooking the food in front of the customer and presenting it well for eating in, you're suddenly getting into catering margins.
"About 60% of our café stock is frozen and supplied by companies such as Country Choice and Cuisine de France, and the rest comes through Nisa Chill - all our salads, sandwich fillings, pies and quiches come through Nisa Chill."
The benefits to branching out into catering aren't just about increased margins, though, says Mohammed. "The café creates a point of difference. The grocery market is saturated, but if you look at the Irish and Belgian markets hot food is not only creating good margins, it's creating a massive point of difference. That's what attracts more customers."
Mohammed says that c-stores are well placed to have adjoining cafés because they have an established customer flow ready to convert into café customers. "If you mix it with retail, you have extra customer flow that standalone catering doesn't have. The cafés are operating at 10-12% of our total turnover, and in each of our stores, we get 900 customers visiting daily, so at least 100 go into the café as well."