Diversification has been the name of the game for Eurospar operator Chris Ward, who has had to react to growing competition in the Welsh town of Milford Haven
In the small port town of Milford Haven, amid the geographical isolation of Pembrokeshire in Wales, the retail landscape has become increasingly crowded. For Chris Ward, who operates a 3,000sq ft Eurospar in the town centre, diversification has been the key to survival since he moved to his current site in 2008.
The first major threat to his business came three years ago when the out-of-town Tesco re-opened after a 20,000sq ft extension. “The week Tesco closed to undergo an extension showed the damage that an out-of-town business does to the high street. There was no Tesco, so everybody was in the high street and sales flew with us,” he says.
So when it re-launched after its revamp Chris’ store suffered the consequences, with a significant decline in sales. But Tesco wasn’t the only threat, in fact there was a long queue of businesses lining up to take his trade. Chris explains: “The 99p store came, then Home Bargains came, the Factory Store came, Greggs came, Kwiksave came - there are about 13 different stores directly affecting what we do here and which have opened in the past three years.”
Eurospar Milford Haven
Size: 3,000sq ft (retail area)
Opening hours: 7am-10pm
Staff: 52, including 8 full-time
Average basket size: £5.80
Services: Subway, Costa Coffee, dry-cleaning drop-off & collection point, Lottery, health lottery, post office, ATM
Yet due to his forward thinking and ingenuity, sales are level on last year, “which I see as an achievement”, Chris adds.
His success has been based on a number of decisions, from switching to Eurospar in 2011, to opening a Subway outlet in May this year. “Eurospar’s pricing policy is completely different to Spar’s; there’s a 3-4% drop in margin, so our prices are quite keen,” he says. “We took on more than 400 pricemarked lines (PMPs), and the proportion of PMPs and round pounds have increased recently - you just have to sell the volume. We also had to work hard on areas that aren’t price sensitive, such as groceries and things that attract kids, such as ice lollies and confectionery.”
Last summer Chris introduced an in-store dry-cleaning drop-off and collection point, which he promotes by the post office. “I had noticed a lot of advertising for a new dry-cleaning company, so I approached the owner,” he says. “I asked him if he’d thought about a collection and drop-off point at another location and he agreed - he’s based remotely and our opening hours are longer than his.” Chris receives a percentage of sales each month, which ends up at £150-£600. “It’s never going to set the world alight, but it brings people in,” he says. “You wouldn’t be without a bottle of champagne if you’re an off licence.”
Tesco prompted the new pricing policy, but it was the opening of a local Greggs outlet that forced Chris to revisit his food-to-go section and ultimately inspire one of his biggest success stories. “When Greggs moved in, we had to look again at traditional pasties. We still do them, but we had to change.”
So they started selling meals, cooked in store by a specified member of staff. Customers can order “phenomenally” good value meals for up to £3.99, including staples such as chicken curry and pasta.
“At first we recycled other stuff from the store, such as fruit and veg or meat, if it was the last day on sale, to use in the meals,” Chris says. “But now we have to buy the ingredients in because it has surpassed our wildest expectations.”
However, soon he was taking food-to-go to another level entirely, resulting in a regional award. It all started in December 2012 when he had the idea of offering Christmas lunches every Friday throughout the month. “We did maybe 10 or 12 per Friday. Then last Christmas we were selling up to 35 dinners a day. When January arrived, people started to ask whether we would continue doing it regularly. So we sat down and said ‘Can we do it every Sunday?’.” The answer was yes: for the first Sunday they sold 40, then 50, then 60, then they employed a member of staff and sold 70, until it reached a plateau at between 100 and 150 lunches every Sunday.
For £3.99, customers bring a plate and take the meal home to microwave. Alternatively, £10 buys two roast dinners and a freshly-baked apple pie and custard. “It’s taken off to such an extent that someone down the road is opening a business to do takeaway Sunday dinners,” Chris adds. “But they’ll just have a shop with only a carvery, whereas we’re more than just a shop - none of the parts work without the other.”
Chris’ Sunday lunches also come with the prestige of having won ‘best Sunday lunch in Pembrokeshire’ title, beating restaurants and pubs to the crown.
With the in-store Subway recently opening, the food-to-go section could have suffered, but this hasn’t been the case. “Food to go hasn’t been affected by Subway, it’s a totally different product. At lunch, for example, people who were going to food to go are now going to Subway and vice versa - new customers who were going to Subway have discovered the food to go; they see its value.”
The Subway concession, which covers 300sq ft including seating and prep area, is growing each week and has “definitely brought in footfall and a new type of customer”, Chris enthuses. It has also brought in 12 new jobs to the business, making him the biggest employer on the high street.
Subway replaced the off licence cold room, which he says was a fantastic idea in 2009, but times have changed. “People stopped buying alcohol in there like they used to, once the supermarkets got on to the slab deals and Home Bargains opened, and our off licence took a hit,” he says. “Then the Subway idea came to us and it seemed like the natural thing to do.”
They now also offer three lines of coffee: Costa Coffee (£2.59); Subway (£1.30); and a £1 freeze-dried line in the food-to-go area. “The £1 line does the most volume, Costa is the biggest catch, and Subway is relatively new and is just starting to grow,” he says. Other services include the post office, an external ATM, an internal post box to draw in footfall, and an in-store dry-cleaning drop-off and collection point.
Alcohol is now located where household used to be towards the back of the shop, while an extra gondola accommodates the latter category. “We were really struggling with beer sales, but we cut our prices to the lowest recommended price, which has really helped,” Chris says. “The Kwiksave 200 yards up the road was really chasing us for price when it opened, so we had to focus heavily on promotion. But we have a good range of ales now, too.”
He says fresh is growing steadily at about 40-50% year on year, driven by Spar brand chilled ready meals. “We’ve always had good participation of own brand; there’s lots more margin.” He does sell local products, such as fruit and veg, cakes and eggs, but overall he likes to remain “totally loyal” to Spar.
But in terms of the local community, Chris is completely immersed, helped by the introduction of the plastic bag levy in Wales three years ago. “The carrier bag charge has been phenomenally successful for me,” he says. “We donate the proceeds every month to somebody in town; it works out at about £200 or £300.”
The local school has been a regular recipient, recently gaining a football kit for the first time, and Chris has also donated to a local pet shelter and homeless charity. Furthermore, the legislation has been successful in slashing plastic bag usage. “It’s tremendous, we’ve given away thousands of pounds and usage has been cut by half,” he enthuses.
There is no doubt that Chris leaves no stone unturned in his quest to move with the times and appeal to his customer base. “We’ve done four major refits since 2009 and moved the tills four times and the fridges three times,” he says. “I worry for people who are not diversifying - times have changed. We need to attract tomorrow’s customers, who are used to using Subway, food to go and the post office. In fact, my hashtag on social media today was #morethanjustashop.”