Come on, be honest. How long would it take you to decide to take a on a brand new store that was just doors away from a newly opened and powerful Sainsbury’s Local forecourt? Indeed, would you consider it at all?
Jack Singh and his business partner Amer Younis had just a day to decide when the existing owner of a store in Glasgow city centre panicked at the appearance of all that orange. To be fair, Amer had worked in the store – a 24-hour operation – and knew it had plenty of potential, but that was before the giant took up residence close by.
What made the decision easier for the duo was the knowledge that Scottish Key Lekklerand wholesaler J W Filshill was prepared to back them in what turned out to be the 100th Key Store in Scotland. Ian Craddick, the duo’s Filshill regional manager, dropped everything to join them at the store at 6am on a chilly morning at the end of last year to crunch final numbers and assess location. The duo would not have gone ahead without the nod from Filshill as they believed that only a partnership with Key would give them the edge needed to steal a few golden eggs away from Sainsbury’s. That said, Jack says candidly: “We did take a big risk in buying it. Sales dipped by 30% immediately after Sainsbury’s opened and by then the deal had gone through. But we did get it at a good price!”
Amer adds: “The Sainsbury’s Local has a big footprint and is a good store but that doesn’t mean we can’t survive next to them.”
Jack already operated a Key Store on the other side of Glasgow in Paisley, near the airport, but in terms of location and customer base, the site of the 100th store in the West End is entirely different; it has a more affluent customer base comprising students, office workers and local residents, plus scope to capture plenty of passing trade.
What the two bought was a dark, 900sq ft 24-hour store without an off licence, lottery, utilities payment or any daytime sales to speak of. Sales, based on a range of core grocery and CTN lines, were squeezed in after dark. There was minimal chilled. And in addition to the Sainbury’s Local, an established Oddbins outlet sits at the end of the parade of stores. But the early indications are better than good if truth be told. Within five weeks of opening as a Key Store, the duo confirm sales were up 60% overall and, importantly, up 40% between the hours of 10am–4pm. That said, the average basket spend still remains at its highest after 5pm. The store is already tracking close to the target turnover of £25k a week and the duo are “well happy” with progress, with plenty more plans yet to implement.
The investment in the store has been substantial, at around £98k estimates Jack, with the major lump spent on gutting and refurbishment including adding air conditioning, new lighting, ceiling and floors, wrapping chillers around all three internal walls, putting in CCTV and installing a new KeyPos epos system. The big difference as far as Jack, Amer and Filshill are concerned is the slick city fascia. The original plan, to stake its claim on trade, both local and passing, was for an aluminium frontage, with frosted windows. Glasgow City Council eventually said no, delaying the much-need refurbishment by three months in the process. The compromise is a highly successful mix of light wood with frosted windows and mirrored accents both inside and out. Gone are Key’s familiar royal blue and yellow window vinyls that Filshill sales director Ian McDonald admits look dated compared with the airy modernity conveyed by the frosted look. The open, modern feel continues inside, with a clear acrylic basket system used for displaying the 5m run of crisps, for example. The store also houses one of the first chrome effect Lucky Strike vend-style cigarette gantries in the UK. Supplied by BAT, the gantry is operated by a keypad system, with codes corresponding to each tobacco line.
It provides additional security for the 24-hour operation and gives real-time stock readings. Right now, Jack and Amer are working with BAT to combine the gantry’s own vending pad with their KeyPos till pad.
Jack confirms: “We wanted a quality look when customers drove by. We were adamant we wanted big airy windows so you could see the light and bright interior of the store.”
So extensive was the work undertaken that the store was forced to close for three weeks – something Filshill tries to avoid when helping Key customers update. Only the two tills remained in the same place, sited directly to the right of the front door. “This 100th store is an evolution of what’s in our portfolio at the moment,” confirms McDonald. “Probably 99% of the stores refurbish before they become a Key Store. Customers want a nice place to shop and come back to and there are some smashing stores out there for them to choose from.”
Filshill attracted 25 retailers to its Key package last year and services stores all over Scotland and as far south as Carlisle. Key Store business accounts for approximately 20% of its annual £150m turnover, the rest coming from direct delivery to independents and 15% from cash and carry. McDonald continues: “We are comfortable attracting two to three retailers to Key each month. It’s not about numbers it’s about people like Jack and Amer. We get a good level of discipline from our retailers commensurate with the level of support we attract for both unique and regular promotions from our suppliers.”
Hand in hand with the new look came a total overhaul of the range. Jack and Amer relied heavily on advice from Filshill to merchandise the store and optimise sales. Securing a licence was key in the process. No Scottish Key Store operates without a licence and now alcohol accounts for a third of the store’s total range. All the beer is sold chilled, with Tennent’s, Miller and Grolsch selling well and an unusually high proportion of niche beers like Cobra and Tiger catering to the taste of the local student population. Shutters come down over the beer chillers at 10pm when the licence closes under Scottish law, reopening at 8am. Overall, there are 6.5m of chilled beers on offer. The same space again is devoted to chilled foods and dairy. There are also two upright freezers sited along the back wall.
Using Filshill’s established relationship with both Camelot and PayPoint, as well as giving credible arguments on need, Jack and Amer have been able to add the lottery and utilities payment to the store’s repertoire; they’re also waiting for an internal ATM to be set up. They have installed a fair-sized hot food to go offer under the Cuisine de France brand and are looking into selling bus passes.
Snacks play a big part in the reviewed range and as such a metre bay of ‘healthy’ snack and cereal bars has been trialled, sited opposite the 4m run of confectionery. The bay caters to the health-driven urbanites living in Glasgow’s West End. “Sometimes you have to take a risk,” says Jack. “In this instance, it’s done really well.”
A sizeable core range of grocery remains in the store and the staff of six pride themselves on keeping everything in pristine, faced-up condition. Customers like it that way too, and even under the previous ownership, explains Amer, would take the item they wanted off shelf, then pull the others behind neatly forwards. “It’s ingrained!” he laughs.
Filshill delivers twice a week, with chill and freeze coming via a third party distribution agreement, and milk from Fyfe Dairy. Establishing a lower price point across the store and adding a heavyweight promotional calendar have been top priorities too.
Amer explains: “Because the former owner relied on night trade, he believed customers would pay anything for the items they wanted and as such wasn’t very competitive. The prices of course looked very high during daytime shopping hours and people were put off from coming in at 9am and paying 90p for a bottle of Coke. With Filshill’s help, we’ve brought all prices down to the rrp when not on promotion, and aim at an average margin of 28%. That might seem high to some, but you have to remember, everything was priced at a real premium before.”
Leaflets personalised to the store now go out to the students, local flats and houses every three weeks. Jack plans to copy the tactics he adopted at his Paisley store to get them delivered efficiently by linking with youngsters from a local youth club. They deliver a proportion each in return for a boost to club funds, football kits and so on. Jack confirms: “It’s so important to ensure you have the right promotional labels in place across the store. We have to be very strong on promotions to compete and thus our aim is to ensure everything is perfect.”
On promotions, the duo are helped by the dedicated competitions run regularly by Filshill for its Key customers with fmcg suppliers. A recent ‘Win a car with Walkers’ competition was a runaway success, boosted by the special consumer-driven website, www.keystore.co.uk. The site complements the leafleting schedule and runs competitions and a store location finder. Going forwards, McDonald doesn’t rule out the site enabling consumers to order shopping and collect it ready-bagged from their nearest Key Store on their way home. “The space is there on the site,” he confirms. Jack asserts: “We have a lot of belief in Key Stores and what they’re doing. We never considered for a moment running the store without a fascia. If we buy another store we won’t hesitate to put it into Key. It offers a high level of service and if you have a problem the team at Filshill deals with it fast. There’s a real-time printer running in the corner of the trading department to highlight every out of stock as customers’ orders come in, and someone dedicated to checking it hourly and getting it sorted. He adds: “In a city it’s very hard to operate and create the right in-store theatre. Under Key we’ve drawn the customers in. We now have lots of mums and kids coming in, and consumers using the store much more regularly.”
With a Sainsbury’s Local and an Oddbins alongside, who could ask for more?