The 127 Central Convenience stores recently acquired by Conviviality Retail will be fully supplied by the group by the end of February, with most scheduled to be converted to the Select Convenience brand over the next 18 months.
In its first half results, Conviviality Retail said all of the Central Convenience stores would switch from being company-owned to fully franchised and that 10 existing franchisees were already interested in operating some of the stores, which are predominantly located in the South and South West of England.
“We expect to achieve buying synergies of approximately £0.2m and cost synergies of approximately £0.8m in the first full year of ownership,” the company said in a statement.
Like-for-like retail sales through Bargain Booze, Wine Rack and Select Convenience stores were up 2.3% excluding tobacco in the 26 weeks to 29 October, its half year results revealed.
Including tobacco, like-for-like sales were up 0.4%, while total retail sales were up 10.0%, “reflecting the quality and number of new stores brought into the group,” the group said.
The group said it viewed the imminent mergers of Booker and Tesco and of Nisa and the Co-operative Group as “as positives for Conviviality Retail, which continues to hold a differentiated position in the convenience market through being off-licence-led convenience retail”.
In line with its strategy of increasing multi-site franchisees, 16 existing franchisees opened 45 more stores in the first half, some of which were acquired from existing franchisees. In addition, 15 new franchisees joined the group in the period.
Franchisee margin for the period also improved 0.8% points and 220 franchisees were awarded 1,214,650 shares under its Franchisee Inventive Plan.
Plans to engage with the local community also continued apace, with the creation of a new digital club which already has 50,000 members. Facebook followers also exceed 128,000.
Conviviality chief executive Diana Hunter said: “Our customers and franchisees have continued to recognise the strength of the Conviviality proposition and the opportunities a single supplier and distribution solution affords them. This has been evidenced by our above market growth in both the on trade and the off trade during the period.”
Overall, Conviviality Plc – which includes Conviviality Direct, Conviviality Retail and Conviviality Trading – saw revenue increase 9.2% to £836.3m. Gross margin was down 0.3% points to 12.5% due to increased sales to large national account customers, and adjusted profit after tax was down 1.6% to £12.3m.
Conviviality acquired the Central Convenience business from WS Retail Limited - a subsidary of collapsed wholesaler Palmer and Harvey - on 15 December 2017.