Just three years after purchasing their first convenience store, the Hodgkiss brothers from the West Midlands have now spent a little over six months in charge of their second shop — a new city format Spar in central Birmingham.
Young guns Paul, aged 27, and Michael, aged 31, have had to learn fast how to split their efforts between two very different stores.
While Michael works mainly out of the community format store in Boldmere, near Sutton Coldfield, most of Paul’s time is spent in Upper Dean Street, getting to grips with city trading.
The Upper Dean Street store is a completely new direction for the brothers, but the first few months have proved that the pair have what it takes, despite their relatively limited experience.
The store was built as part of Birmingham’s continued regeneration and is on the edge of the fast developing Chinese quarter. Although it caters for everyday shoppers, the store’s main custom comes from traders at the nearby markets and from office workers, who flock to the store’s popular food-to-go section. Sales are also boosted by business visitors staying in the hotel above the store. The hotel also lets apartments on a short-term basis.
“The first six months have gone well,” says Paul. “We’ve increased the turnover from about £8,000 a week (excluding services) in the first few weeks to about £13,500 now. There’s a big difference between what the two stores sell most of. Although beer, wine and mainline sales do well in the city, our bestseller in terms of profit is food to go. Boldmere is a lot more across the board with its grocery sales, and customers often pop in to buy top-up items such as bread and milk.”
The cold weather has meant that hot food-to-go products such as the recently introduced hot beef baguettes and pizza slices along with coffees are being snapped up. A circular self-serve salad bar has also proved popular with more than 200 servings sold each week in summer.
“The salad bar does a lot better in hotter weather,” says Paul. “Although we’re doing more like 50-60 servings a week now, it’s still worth keeping it running in the winter because of its good profit margin.”
An in-store flat-screen TV showing Sky News gives the store a modern feel and proves a useful service for customers looking to catch important headlines while on the move.
There’s a good reason behind which brother runs which store, as Paul explains: “We decided for the meantime that I would run the city store and Michael would run Boldmere because Upper Dean Street needs that extra person on categories such as hot food. Michael is better at the paperwork, which there tends to be more of at Boldmere.”
While Michael is delighted with the progress of the new store, he says he prefers to work out of the community format. “Our two stores are totally different and you can’t really compare the two,” he says. “I enjoy working at Boldmere because you get to know your customers a bit more. However, the city store is going well and has a good future. Boldmere is our established store but with all the development taking place in the city, Upper Dean Street has the potential to be even more successful.”
A possible development includes building more city-centre apartments, which the brothers hope will further benefit their store. “There’s a lot of building work going on at the moment, which should be a good thing as long as other benefits such as the markets are not lost as a result,” says Paul.
The pair hope the store, like the area it serves, will continue to build. “Dean Street has done well but it is still developing and we’re still learning exactly how to do things,” says Paul. “Every day, more and more people are getting to know where we are. It’s definitely a challenge on top of having to run the Boldmere store.”
The cost of setting up their second store is something the pair have had to keep a close eye on. Paul believes that controlling the running cost of any store, in particular a city centre store, is the hardest thing retailers have to deal with. “The rent is higher and although it has been easier to hire staff here, the basket spend doesn’t tend to be as high,” he says. “Making 25% profit is not always enough to cover costs and I would advise other retailers to have back-up funds if possible to cover any losses.”
One thing Paul and Michael didn’t anticipate was having to pay stamp duty in full on their 20-year lease. The tax cost them £6,500 and contributed to solicitors’ fees of more than £16,000.
What could help the business would be to open 24 hours a day. “I wouldn’t rule out going for a 24-hour licence,” says Paul. “I would have to be sure we were going to get the custom, though. Extending the hours could work as the wholesale market starts at 3am and it can get very busy with people buying alcohol on Friday and Saturday nights. Any move into 24-hour opening would have to involve a bit of research first.”
The first half-year at the store hasn’t been without incident. In September in a struggle with a would-be thief, Paul was bitten on the shoulder as he waited for the police to arrive.
The man has since been handed a four-month suspended sentence and a £100 fine. But Paul is adamant he would do the same again. “We get a lot of attempted theft in the city but so far people haven’t managed to get away with anything,” he says. “I think it was important that from an early stage we showed people that we weren’t a soft touch.”
With this determined attitude at the core of their philosophy the Hodgkiss brothers look set for a bright future. With two stores under their belts and age still on their side, a third store could well be on the cards.
Store facts (UPPER DEAN STREET)
store size : 1,700sq ft
opening hours : 7am-11pm (open until midnight Fridays and Saturdays)
average customer spend : £2.55
approx sales per hour : £105
staff : 12 (three full time, nine part time)
TOP 10 LINES BY PROFIT (DEAN ST)
Salad Bowl - medium
Sausage & Bacon Baguette
Salad Bowl - large
CARLING 500ML CANS
STRONGBOW 500ML CANS
Red Bull 250ml
Top categories as % of sales
Cigarettes and tobacco 26.5%
Wine and spirts 18%
Deli and food to go 11.5%
soft drinks 11.5%
dairy and chilled 8%