It’s been a year since we re-opened our Londis store in Southwater, West Sussex, after a major expansion and refit, and so it is a good time to look at our original objectives and review our progress.
Our vision was to make our shop the best in the area and we are happy with where we have got to. We’ve had a great response from our customers and a lot of people within the industry have been down to look at our store. But, of course, there are two sides to this kind of objective, as it is not just about presentation; it is also about performance. We don’t want a store that looks good just for the sake of it, we also need to make sure we get the best possible sales, profits and return on investment.
Before we re-opened as the new store we did feasibility studies about how much we needed to increase sales. The worst-case scenario was a 16% increase, which would have been roughly break-even on the investment, 20% was a conservative estimate of what we could achieve and 25% was the top end of our aspirations. The good news is that we are more than 20% up year on year, and I believe we will reach the 25% soon.
We were also hoping to achieve a 1.5% increase in gross profit margin, but that hasn’t happened. We have a better product mix with more fresh and chilled, but that has led to higher wastage, and we also went very heavy on promotions as we felt that we needed a strong value message. So GP will be very much a focus for us this year, and I’m confident we can improve it by managing our wastage better and reducing the number of promotions we run, as well as taking close control of our costs.
Two things have been a great success, though. First, bringing the Post Office in store has been great for footfall, and we are making good progress on converting post office customers into sales in the retail side as well. And second, our succession planning has been a success. My son Alpesh is now part of the business and taking ownership of the Southwater store, meaning I can look for additional sites in the area. I hope to have a second and possibly a third store by the end of the year. In retail, the journey is never finished, and that’s what makes it so exciting.