The group has earmarked funds to acquire 20 more stores during 2005, all of which will be run by independent retailers under the licensed stores scheme that has seen a number of loss-making outlets turned into profit during the past two years. There are now 115 stores in the scheme, 86 of them run by independents.
In September, the group will advertise on national terrestrial television for the first time with a two-week campaign on GMTV. The campaign, which around 10 million people will see at least once, will emphasise the local nature of shopping at Costcutter and highlight promotional deals available at the time.
Strong deals will also be advertised on a relaunched Costcutter radio service. TeamTalk will take over the contract as service provider on July 15, when the service will be relaunched as Intune radio with new content including more competitions and links to the group’s website.
Next year a broadband radio service will be available, allowing retailers to choose one of five channels to reflect the shopper profile of their store and their chosen customer leaflet.
The group’s managing director Colin Graves told delegates at the group’s conference in Tenerife last week that defections from the group such as Sainsbury’s acquisition of Beaumont’s cost the symbol £31m in retail sales but, despite this, sales through head office for the year to April were up 6.8%.
He said: “Without doubt it’s a war out there, but this is not a new phenomenon in retail. Some have taken their pot of gold and sold their soul to the enemy but the multiples cannot buy every shop in the UK. “Independents have more flexibility and can use that to their advantage. “We need to provide the retailer with what he wants, so we’re busy negotiating on areas of opportunity such as specialised and local products plus fresh foods. We have 1,300 quality stores and expect another 80 to join us by the year end. In the next two to three years we will prove beyond doubt that we are the best symbol group.”
Costcutter’s plans for 2005/6
20 more stores to be purchased and licensed to independents
TV advertising on GMTV in September
New store image
New epos system
Relaunched in-store radio
New franchise centre set up
New store image
A new store image for Costcutter retailers is ready for roll out following a six-month development programme at a store in Dronfield, Derbyshire.
The new image features split aisles with more gondola ends, enabling retailers to create more ‘in-store theatre’, while graphics feature smiling faces to make stores appear more inviting.
Costcutter has also invested in C-Pos, a new Windows-based epos system that is easier to use and will allow retailers to offer discounts for bulk buys and meal deals. C-Pos’s source code is owned by Costcutter so it can remain in control of the system over time.
Costcutter’s bank HSBC has set up a national franchise centre specifically for members to discuss their investment needs.