When Peter Kealy, group director of wholesaler group BWG, joined the company in 1983, Spar in the Republic of Ireland was, in his own words, “on its knees” and the company had to make a rapid decision about what to do with the business.
He spent a week driving around the UK to see what c-stores were doing over here - and where. Spar UK had a strong image under its ‘8 till late’ banner, with long opening hours and an emphasis on impulse purchases.
Kealy returned to Ireland to persuade his retailers to follow the UK model but with one important exception - to keep the deli and not opt for pre-packaged items.
In 1997 Kealy, at that time BWG sales and marketing director, decided to segment Spar into three formats: EuroSpar - larger stores for local family shopping, which account for 22% of all BWG’s Spar sales through just 30 stores; Spar neighbourhood and city centre convenience stores (now 330 stores); and Spar Express stores - exclusively petrol forecourts (60 stores).
Kealy says: “We’d been growing the brand steadily but realised that to make a significant improvement in our market share we needed to go into large format stores, so EuroSpar was an ideal solution.
“Rather than just develop EuroSpar, we decided to bolt on at the end a solution for petrol forecourts as well, so we ended up with the three formats.”
By the late Nineties, the Irish arm of Spar was no longer following the UK’s lead but had carved out its own market, more in tune with the US than anywhere else. “Trends in the US inevitably happen here,” says Kealy, “and the time lag is getting shorter and shorter. Now the lag is less than two years.”
Right now, BWG is considering launching in its forecourts a US phenomenon - fresh hand-poured coffee. Another idea is to develop juice bars for the city centre and neighbourhood stores.
The most recent idea from the US to be rolled out (three so far) is Dish ‘n’ Dash - help-yourself ethnic hot meals which are displayed in a unit similar to a salad cart - launched at the end of February. Kealy says Spar wants to become known for something, to have an edge. Dish ‘n’ Dash is a move in that direction.
The Dish ‘n’ Dash unit holds popular food from around the world, such as Thai chicken curry, chicken korma, beef stew, roast potatoes, stroganoff and pilau rice. The food is cold so as to prevent unnecessary wastage, with a three-day life. There is a microwave at one end of the unit to give customers the option of heating their dish in-store.
One store which has this new concept is the Milltown Spar, in a suburb of Dublin. The store attracts lots of passers-by from local businesses. When Convenience Store visited the store, the Dish ‘n’ Dash unit had been in place for three weeks. The store was selling 35 meals a day and 90% of customers were heating their food on the spot. At Milltown, the deli, Dish ‘n’ Dash and bakery together account for 11% of the store’s sales. In a city centre store, it could be as high as 30%.
At 10,000sq ft, EuroSpars are about four times the size of a neighbourhood Spar, and they cater for a different market. There is a heavy emphasis on fresh across the group but at EuroSpars the fresh food section is right at the front and takes up about one third of the store’s total floor area. Grocery content is also higher. Value for money is a recurring theme at all BWG stores. In the Inchicore EuroSpar there is a Real Deal area, with pillars displaying everyday value items such as toilet roll and ambient groceries, creating a value line along the back of the store. Each pillar is angled toward the customer to highlight the latest deals.
There are also a number of ‘buy one get one free’ deals, as well as cross-merchandising; for instance, KitKats are merchandised with the ambient coffee and naan bread is next to Uncle Ben’s sauces.
Kealy says there is intensifying competition in Ireland brought about by Tesco and the increasing emergence of discounters. And although Superquinn is in the same industry, Kealy says it is not a direct competitor and that it’s difficult to know what will happen now Superquinn has been acquired by Select Retail Holdings - a consortium of private investors headed by Simon Burke.
As in the UK, many independents are opting to join a symbol group or fascia group associated with a cash and carry, and also have the same concerns over their rising cost base, due to the minimum wage.
But one of the greatest aides to the business, and something which prevents below-price selling, is The Grocery Order Act of 1987. The Act, Kealy says, has prevented Irish retailing following the trend that has happened in the UK.
“There are retail deserts in many UK villages but that’s something you don’t see in Ireland. And the multiples are still here - it’s a nice mix. People have plenty of choice.”