Opening up a convenience store in a new-build location brings its fair share of challenges. Amy Lanning finds out what they are from those who've done it
New-build estates and villages are springing up all over the country. And of course every community needs a local shop, but there's more to operating a c-store in a new-build area than having a swanky new property.
For Andy Patel and his business partner Hitesh Patel, persistence was a prerequisite when opening their Budgens store in Virginia Quay in London's Docklands. Their store opened in November last year but the saga of leasing the unit dates back to 2003 when it was just a pile of rubble.
"It took us four years to get this unit," says Andy. "I spotted the site being built and from day one I phoned developers Barratt Homes every day - they got tired of my phone calls. I thought that there had to be a shop here so when I looked at the complex and the flats, I saw they had a plan for one."
Their store is on a big site still being developed by Barratt Homes, but conditions of the development state that 20% of the area has to be council-owned. The Patels' store is owned by Toynbee Housing Association, with the 120 flats above the shop designed for key workers such as firefighters and paramedics. The store was to be leased from the housing association.
"The developers wanted to leave this to the last minute because they don't make money from it," says Andy. "They kept saying the plans hadn't been drawn and when they eventually said they had, I was told it was going to Tesco. I phoned again and they said they had given the site to Toynbee Housing Association, so I phoned them and they told me they'd given it to an agency. They took my number, but I continued to push. You've got to persist."
And persist he did. "I was here on the site first thing in the morning when it was a mound of dust. The agent drafted a letter of tender for me and gave it to Toynbee. I wasn't competing with anyone else and because I had good references the process went faster. We also put a lot of our own money in so they knew we wouldn't let anybody down."
One of United Co-op's latest stores is in West Park Village, a new residential development next to junction 58 on the A1 in Darlington. When the group first agreed to open there, it was just a wasteland. The new-build development is currently two years into a 10-year plan.
Some 700 houses will be built eventually - 250 have been finished so far, along with the primary school, pharmacy and dentist. There are commercial units above the store and residential apartments above the other retail units - a hairdressing salon and coffee bar which open soon.
John Briddon, senior operations manager at United Co-op, says: "When we were in negotiations with the landlord we had to make sure that each retail unit complemented one other - that was very important. The idea is that our location will be the centre of the new community."
But agreeing to set up shop when the area is just wasteland requires vision. "Two years ago we were given a pack outlining the developer's proposal and thought it was a good opportunity. We came up here one day and drove around the muddy field. "We could see the potential for it straight away."
The group jumped in early as the site "exactly mirrors the Co-op's ethos and is where we want to be, which is a community retailer".
Risky business
Operating in a new-build area is largely an unknown quantity, so retailers must be prepared to take a risk. Says Andy Patel: "If it doesn't work out, you may have wasted a lot of money. That's why we had to get in with a well-known brand. Before we got the tender we went to Budgens. We wouldn't tell them where the site was, just that it was in Docklands. In January 2006 Budgens said yes, and we signed the contract with Toynbee in July 2006.
"One of the challenges is that trade is uncertain - you don't know what you're going to take from day one. You're not guaranteed customers. People had been living in the flats here for four years without a shop and are used to shopping on the internet. We have to break that habit, which will take time."
Andy says wastage is big issue because of the doubt surrounding sales. "You need the availability otherwise people won't come back, and you've got to be prepared for wastage with a new build."
Jim Leese, whose Londis store is in the new-build village of Charlton Down in Dorset, says the uncertainty over the catchment area also brings challenges. The development of his village started in 1998 and will finish any day now. "It's difficult to say how many people live in the village because there's not been a census, but there are 450 houses and 300 apartments.
"Out of four people I meet on my route home, one will never have been in the shop. We have people who live in social housing - they're my best customers - and we have people who have retired from London and have a bit of money to spend; they tend to +think that unless food is from Waitrose, it's not worth buying.
"There's no passing trade here and that's often a downside of having a new-village store," adds Jim. "I have no idea what is and isn't going to work. I threw away a case of lemon curd the other day because it sat on the shelf and went out of date; that's one lesson learnt."
United Co-op's West Park Village store is in a better position in terms of its location. "Potential customers can see the store from the main road into Darlington from the A1," says John Briddon. "People recognise the fascia and that gives us a lot of passing trade. Being seen from the road is important with a new build. Once you get people through the door, customers have the confidence to come again. The demographics are good so people feel secure shopping here."
Work in progress
For some new-build developments, like West Park Village in Darlington, retailers must compromise to fit in with the surrounding area. Working with a developer meant United
Co-op had to alter some of its usual store features to match the builder's vision.
"We had meetings with the builder to get an understanding of where he was coming from. He was very choosy about who he would partner with for the store. And he was very meticulous. Rather than having normal ram raid bollards, we have attractive stone ones - that was the quality he wanted."
The Co-op fascia is on both the front and back of the store. "You wouldn't normally see the same sign on the back of the store, but it's an attractive building wherever you look at it. The window graphics are in keeping with the building, too."
This United Co-op store wasn't able to adopt all of its usual energy-saving features, either. "Because it wasn't our own build, we couldn't put everything in. We couldn't put in a frog box [a system that recycles heat from the chillers into air conditioning] because of the building constraints. The frog box goes on the back of the store, but here all the plant is on the roof."
The problems aren't always over when the unit is built, however, as Andy and Hitesh found out. "It took six to eight weeks to fit out the store, but when it opened the electricity supply wasn't sufficient so we had to rely on generators. It costs us £12,000 for five-and-a-half weeks."
You could also find yourself operating on a building site. Virginia Quay is far from complete so Andy and Hitesh's store is still surrounded by builders. "There are 405 flats being built opposite and the road will open once they are finished. The road will be on a bus route and three more towers of flats are under way. I have no idea how many - there's still four or five years of development left.
"You've got to be patient, which Hitesh is good at, and I'm not."
When United Co-op's West Park Village store opened in September last year, only 150 houses were built, but the builders working on the rest of the development are some of their best customers. "The hot food sold well from day one. Builders love a bacon sandwich in the morning - it's part of the job! But we did launch earlier than probably most hard-nosed retailers might want to," says Briddon. "There was a risk in going in so early but at least the foundation was there with the school, shop and family pub, so everything will grow and evolve around us."
He believes that trading in a new-build location means that forging close links with the community becomes even more important. "We have given the children from the school guided tours of the shop. It teaches them how to shop and helps the families feel part of the store, and hopefully that keeps them coming in. It's all about us linking into the community.
"To ensure new residents feel right at home immediately we give them welcome packs when they move into the village."
But it's not all risks and challenges. Operating a c-store in a new-build location brings its share of benefits, too. "We could look at what space we wanted," says Briddon. "At first, the builder was looking at 4,000sq ft, but that was too much for what we wanted, so it's now 2,500sq ft."
Andy Patel agrees: "We have made the space exactly as we want it. We've got a very spacious goods-in area - most convenience stores don't have that. We visited a lot of Budgens stores and most didn't have enough space out the back. The store is 4,800sq ft, but it has the range of a 3,000sq ft shop. We wanted to give it an airy feeling so everything is very spread out."
New-build estates and villages are springing up all over the country. And of course every community needs a local shop, but there's more to operating a c-store in a new-build area than having a swanky new property.
For Andy Patel and his business partner Hitesh Patel, persistence was a prerequisite when opening their Budgens store in Virginia Quay in London's Docklands. Their store opened in November last year but the saga of leasing the unit dates back to 2003 when it was just a pile of rubble.
"It took us four years to get this unit," says Andy. "I spotted the site being built and from day one I phoned developers Barratt Homes every day - they got tired of my phone calls. I thought that there had to be a shop here so when I looked at the complex and the flats, I saw they had a plan for one."
Their store is on a big site still being developed by Barratt Homes, but conditions of the development state that 20% of the area has to be council-owned. The Patels' store is owned by Toynbee Housing Association, with the 120 flats above the shop designed for key workers such as firefighters and paramedics. The store was to be leased from the housing association.
"The developers wanted to leave this to the last minute because they don't make money from it," says Andy. "They kept saying the plans hadn't been drawn and when they eventually said they had, I was told it was going to Tesco. I phoned again and they said they had given the site to Toynbee Housing Association, so I phoned them and they told me they'd given it to an agency. They took my number, but I continued to push. You've got to persist."
And persist he did. "I was here on the site first thing in the morning when it was a mound of dust. The agent drafted a letter of tender for me and gave it to Toynbee. I wasn't competing with anyone else and because I had good references the process went faster. We also put a lot of our own money in so they knew we wouldn't let anybody down."
One of United Co-op's latest stores is in West Park Village, a new residential development next to junction 58 on the A1 in Darlington. When the group first agreed to open there, it was just a wasteland. The new-build development is currently two years into a 10-year plan.
Some 700 houses will be built eventually - 250 have been finished so far, along with the primary school, pharmacy and dentist. There are commercial units above the store and residential apartments above the other retail units - a hairdressing salon and coffee bar which open soon.
John Briddon, senior operations manager at United Co-op, says: "When we were in negotiations with the landlord we had to make sure that each retail unit complemented one other - that was very important. The idea is that our location will be the centre of the new community."
But agreeing to set up shop when the area is just wasteland requires vision. "Two years ago we were given a pack outlining the developer's proposal and thought it was a good opportunity. We came up here one day and drove around the muddy field. "We could see the potential for it straight away."
The group jumped in early as the site "exactly mirrors the Co-op's ethos and is where we want to be, which is a community retailer".
Risky business
Operating in a new-build area is largely an unknown quantity, so retailers must be prepared to take a risk. Says Andy Patel: "If it doesn't work out, you may have wasted a lot of money. That's why we had to get in with a well-known brand. Before we got the tender we went to Budgens. We wouldn't tell them where the site was, just that it was in Docklands. In January 2006 Budgens said yes, and we signed the contract with Toynbee in July 2006.
"One of the challenges is that trade is uncertain - you don't know what you're going to take from day one. You're not guaranteed customers. People had been living in the flats here for four years without a shop and are used to shopping on the internet. We have to break that habit, which will take time."
Andy says wastage is big issue because of the doubt surrounding sales. "You need the availability otherwise people won't come back, and you've got to be prepared for wastage with a new build."
Jim Leese, whose Londis store is in the new-build village of Charlton Down in Dorset, says the uncertainty over the catchment area also brings challenges. The development of his village started in 1998 and will finish any day now. "It's difficult to say how many people live in the village because there's not been a census, but there are 450 houses and 300 apartments.
"Out of four people I meet on my route home, one will never have been in the shop. We have people who live in social housing - they're my best customers - and we have people who have retired from London and have a bit of money to spend; they tend to +think that unless food is from Waitrose, it's not worth buying.
"There's no passing trade here and that's often a downside of having a new-village store," adds Jim. "I have no idea what is and isn't going to work. I threw away a case of lemon curd the other day because it sat on the shelf and went out of date; that's one lesson learnt."
United Co-op's West Park Village store is in a better position in terms of its location. "Potential customers can see the store from the main road into Darlington from the A1," says John Briddon. "People recognise the fascia and that gives us a lot of passing trade. Being seen from the road is important with a new build. Once you get people through the door, customers have the confidence to come again. The demographics are good so people feel secure shopping here."
Work in progress
For some new-build developments, like West Park Village in Darlington, retailers must compromise to fit in with the surrounding area. Working with a developer meant United
Co-op had to alter some of its usual store features to match the builder's vision.
"We had meetings with the builder to get an understanding of where he was coming from. He was very choosy about who he would partner with for the store. And he was very meticulous. Rather than having normal ram raid bollards, we have attractive stone ones - that was the quality he wanted."
The Co-op fascia is on both the front and back of the store. "You wouldn't normally see the same sign on the back of the store, but it's an attractive building wherever you look at it. The window graphics are in keeping with the building, too."
This United Co-op store wasn't able to adopt all of its usual energy-saving features, either. "Because it wasn't our own build, we couldn't put everything in. We couldn't put in a frog box [a system that recycles heat from the chillers into air conditioning] because of the building constraints. The frog box goes on the back of the store, but here all the plant is on the roof."
The problems aren't always over when the unit is built, however, as Andy and Hitesh found out. "It took six to eight weeks to fit out the store, but when it opened the electricity supply wasn't sufficient so we had to rely on generators. It costs us £12,000 for five-and-a-half weeks."
You could also find yourself operating on a building site. Virginia Quay is far from complete so Andy and Hitesh's store is still surrounded by builders. "There are 405 flats being built opposite and the road will open once they are finished. The road will be on a bus route and three more towers of flats are under way. I have no idea how many - there's still four or five years of development left.
"You've got to be patient, which Hitesh is good at, and I'm not."
When United Co-op's West Park Village store opened in September last year, only 150 houses were built, but the builders working on the rest of the development are some of their best customers. "The hot food sold well from day one. Builders love a bacon sandwich in the morning - it's part of the job! But we did launch earlier than probably most hard-nosed retailers might want to," says Briddon. "There was a risk in going in so early but at least the foundation was there with the school, shop and family pub, so everything will grow and evolve around us."
He believes that trading in a new-build location means that forging close links with the community becomes even more important. "We have given the children from the school guided tours of the shop. It teaches them how to shop and helps the families feel part of the store, and hopefully that keeps them coming in. It's all about us linking into the community.
"To ensure new residents feel right at home immediately we give them welcome packs when they move into the village."
But it's not all risks and challenges. Operating a c-store in a new-build location brings its share of benefits, too. "We could look at what space we wanted," says Briddon. "At first, the builder was looking at 4,000sq ft, but that was too much for what we wanted, so it's now 2,500sq ft."
Andy Patel agrees: "We have made the space exactly as we want it. We've got a very spacious goods-in area - most convenience stores don't have that. We visited a lot of Budgens stores and most didn't have enough space out the back. The store is 4,800sq ft, but it has the range of a 3,000sq ft shop. We wanted to give it an airy feeling so everything is very spread out."
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