Parfetts has outlined its estate and financial ambitions for the company, as it officially enters the south of the country.
Speaking to Convenience Store on the opening day of its new Southampton depot, joint managing directors Guy Swindell and Noel Robinson explained how the move into the south was part of Parfetts ambitious plans for the next three years.
“We’ve got a big target - our immediate ambition is to surpass 2,000 stores across the group,” explains Swindell. “This [site] will give it another big shot in the arm and quite rapidly, between 18 months and two years, we’ll be hitting that 2,000 store mark. While the numbers are important, we’re really focused in investing in stores and people so we’ve really invested in the store development side. It’s not just quantity, it’s the quality of the stores that is just as encouraging as the numbers.”
Robinson outlined what the company’s financial goal was for the next three years. “Our vision is that within three years, we’re a £1bn turnover business, we’re currently at £733m. All roads lead to that.”
One of those roads is own label which the company has been focused on of late. “Own label is a big part of that vision. We’ve got an aggressive own label programme. We’ve just rolled out paracetamol, with a 40-60% margin for the retailer. We’re sitting on around 200 own label products, with plans for another 100 within the next 12 months. We see in today’s marketplace, where cash is king, value for money for retailers and their customers is very important. Over the counter medicine and confectionery are big opportunities and then cakes and biscuits - the sweet snacking area there is opportunity as well.”
The new Southampton site marks a big opportunity for the business. The 113,000 sq ft building is the first new cash and carry to open in the region for 25 years and will employee more than 100 people.
Even before the Southampton depot officially opened, it was delivering to 90 stores in the area, highlighting the demand for the service. Robinson believes that the site could handle up to 750 delivered customers. “We’ve been bedding into the site but now that we’re open for business, the optimum number is between 500 and 750.”
Swindell says that although it’s just open officially, the customer acquisition really began around Easter. “Once we secured the site, the work started then and we’ve had guys out on the road since Easter recruiting customers and pushing the Parfetts name out there. There was a lot of understanding for Go Local but we wanted to give that background around the overall business. Even before we opened, we were using the site as a trans-shipment base for our delivered network so we’ve already got 90 customers on that network for the past three months. That’s given us great encouragement straight away, and on the back of that work, we’ve opened three Go Local Extra stores across the region - so a big response and the pipeline is looking strong. We’re really encouraged by the response so far but it opens up the south for our delivered offer.”
Robinson outlined the reach of the depot. “It goes all the way from Twickenham in London, Exeter [to the west] and past Brighton to the East. We did a lot of research on the location - I knew this was a good area, and a lot is dictated by the site availability, and when you look at this site, it’s a 130,000 sq ft site with a great delivered network capability, there’s a lot of things going for this location.”
Swindell says the move south began when Parfetts opened its Birmingham depot two years ago. “We are quite unique in the industry - we are employee-owned and we’re built to grow and reward the colleagues. Everything is geared around reinvesting back into the business. We were blown away with the success of Birmingham, that gave us a natural reach towards the south and then this site connects the dots on reach from the south.”
Given it’s still early days for Southampton, Robinson and Swindell were keen to focus on that site but did add they’re always looking at the next opportunity. “We’re always looking for business growth opportunities, whether that’s acquisition or renovating an existing site. We’re really focused on making this site successful and then we’ll look at future sites. Wales could be an opportunity or Scotland as we’ve just opened our first symbol store in the country.”
Looking ahead, the duo highlighted the major stumbling blocks for the convenience sector. “Costs and legislation will be the biggest challenges for retailers over the next 18 months and our job is help them navigate through all that,” says Robinson.
“The economic climate is tough at the minute and if people are watching the pennies, they’re going to look and ask if they cut out treats etc - but that creates opportunities, we’ve seen in the past how the on trade have struggled due to people not going out, does that create opportunities for the independent retailer?” adds Swindell. “We think it does and that’s why we want to support them. It’s been a tough few years for retailers, combined with legislation and crime. It never gets easier but that’s why we’re here to support. We work hard on efficiencies within the business just so we bear costs rather than the retailers, with margins in mind.”
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