A year of ups and downs

How has this year been from a business point of view?

Richard: Not too bad. It’s been hard work and margins have been hard to come by so we’ve had to search them out, but it’s not been a bad year.

Raj: Challenging. We had to close one of our stores, in Market Harborough, in April, but it’s onwards and upwards. You have to get on with it because it’s part of life and the trials and tribulations of being a retailer – you do your best and sometimes your best isn’t good enough. A lot of the issues were due to disagreements with the borough council, the fact I had minimal signage on the frontage and the fact it was in a secondary position despite it being a town centre store.

Nigel Dowdney: Slow and difficult. I think generally trading has been difficult for the independent sector and competition has got much more fierce as customers are realising the prices they can get in the discounters. I’ve noticed people using Lidl and Aldi more as they’ve become more price conscious. Also, the competition is getting better at what they do so we have to work harder to compete.

Paul: It’s always challenging with any new legislation coming through, but business has been good for us this year. We’ve included the post office into the Elm Tree Avenue store, which has been really successful.

What have been the biggest challenges you’ve had to overcome over the past 12 months, and how did you do this?

Richard: Range reviews have been our biggest hurdle. We’ve done a massive range review project to fine-tune the range in the shadow of the discounters, to make sure we’ve got exactly what the customers want. International cuisine is a particular area that we’ve focused on. For example, a year ago we probably had about four ready-cooked rice varieties and now we have more than 12, while the number of dried rice lines has gone down to about three. We’ve also gone for a lot more local suppliers to give us that point of difference. We’ve probably trebled the number of those and we’ve got a dedicated bay in all the stores. There’s been a positive response from customers.

Raj: The biggest challenge was that closure. That store was in the planning for two years and it was a huge financial, physical and emotional investment. I overcame that by focusing on the light at the end of the tunnel and taking advice from my peers.

Nigel: One of the biggest challenges was the Brexit vote – the uncertainty over how it’s going to affect independent businesses and prices of products. I’ve noticed an increase in the number of independent stores going on the market in the past few months and I think that’s down to Brexit. I think the higher prices will start to hit in January and February next year.

Paul: The minimum wage increase and the impact it has had on businesses has been the biggest challenge of the year. We have had to reduce the number of hours staff are working, but we have avoided reducing our number of staff, which was important to us. The biggest win has been the turnover of the Sunday trading legislation. Being a member of the ACS and seeing the work they’ve done for our sector was great to see.

How has your business evolved this year?

Richard: The Denvilles, Havant, store is the best example of a store evolving. We’ve only had it a couple of years so we have been getting a feel for the area and how to better  match the offering to the shoppers’ needs better. Next week we are putting another 7.5 metres of chilled food in as that’s the area where we are seeing growth.

Raj: We took over the Spar Hackenthorpe store about a year ago, which has been doing pretty well. It’s a very large store – 3,000sq ft – with a large turnover and a large number of staff. Trying to change the mindset of the team of 18-20 members of staff has been challenging. They had the same owner for some 25 years before I bought it and I have a very different way of working to him. The staff had previously been told not to let any sales reps into the store and never to give out the owner’s mobile number, whereas I’m always keen to talk to reps and want them to give out my business card if I’m ever not there to see them.

Nigel: We’ve not had a whole lot happening this year due to the uncertainty. In the past I’ve never been averse to taking risks, but this year we’ve decided to be cautious and see what happens. It’s been a huge change to the trading environment, to the point where we even have customers not wanting to talk to each other because of the way they voted.

Paul: We had a minor refit when we brought in the post office, but we’ve really evolved in the way we engage with the customer, the suppliers and the symbol group. We’ve been looking at each category individually and seeing if we can cross-merchandise and collaborate with different suppliers. For example, for the Euros we offered a deal of six cans of beer and get a glass free. You can only do that if you engage with manufacturers and the symbol group.

Where have you gone and who have you spoken to for inspiration in 2016?

Richard: I’ve been to the National   Convenience Show in Birmingham. It was good to talk to other retailers and share stories. Doing that is helpful as it allows you to see that you aren’t the only one seeing the trends or seeing or thinking the way you are.

Raj: I’ve spoken to loads of suppliers and worked closely with them. Whenever I’ve allowed a supplier to help me remerchandise my category I’ve seen sales rise by anything from 7% to 16%. I attended the ACS Summit, which was inspirational as always. The Blakemore Spar Retail Show allows you to see the challenges everyone faces and shows we are all in the same boat.

Nigel: I’m a member of ACS so I usually attend those meetings and get inspiration from the people I meet there. A particular retailer I will watch for inspiration is Jonathan James as he is an example of a great retailer very much ahead of the game.

Paul: David Rees and Convenience Store is one way to get inspiration and find out what other stores are doing! Also, I’ve been working with HIM a lot this year. They offer fantastic research and insight, and advice for everything from how to plan the store, to social media.

What’s been the highlight 
of the year for you?

Richard: Winning the award for Best Multiple Store at the Convenience Retail Awards. We’ve got the award proudly up in the store and we received a lot of press coverage for it. We use it as a footer to emails – we are milking it for all it’s worth. It adds a bit of gravitas to what you’re doing, and gives you a bit more credibility. It’s definitely had a good effect.

Raj: Managing to increase sales and margins in the new store has been a highlight.

Nigel: I’m not sure. It’s been a year of massive change. As well as the Brexit vote, we are yet to see how the new tobacco legislation affects our sales. Whether Brexit is a good thing or not remains to be seen, but I’m not feeling too positive as unfortunately it has caused a lack of confidence for me.

Paul: The post office. It’s taken us a year to implement and we did a lot of preparation and now we’ve got it, it’s going really well.

What have been your main learnings?

Richard: We’ve looked at our pricing quite closely this year to ensure that we are always competitively priced so that we don’t push customers away. We make sure we sell a 75p loaf, two 2ltr milks for £2 and all the basics competitive with supermarkets. We can’t just stick our head in the sand when it comes to the discounters.

Raj: To always fully engage with suppliers. I won’t be opening a store in a council-owned building again as it has caused me difficulties. 

Nigel: Never listen to politicians! We heard the government say quite clearly that they wouldn’t tinker with the minimum wage because it wasn’t a political issue, but then George Osborne went and turned it into a political issue which we weren’t prepared for.

Paul: Listen more to shoppers and do research to improve the shopper experience and adapt to their needs.

What have customers been telling you this year about what they like or don’t like?

Richard: Customers are getting into their craft beer so we’ve been extending that range. People are getting more sophisticated in their beer selections. They are also getting more time poor and looking towards more semi-prepared or prepared food. They want ready-prepared veg, stir-fry in a bag, fresh noodles, fresh pasta, bagged salad and ready mashed potato.

Raj: I’m not sure about what they’ve told me they like. The main thing for me, which lets me know that I’m doing a good job, is when customers notice when I’ve been away from the store and seem genuinely happy to see me again.

Nigel: We’ve had a lot of staff fluctuation this year, which has caused shoppers concern because we hadn’t had fluctuation for a number of years.

Paul: When we were looking to put in the post office, we asked shoppers what they wanted. We discovered there was concern about disabled access, the number of staff, the service, and the amount of space it would take up. They wanted it away from the checkout, at the back of the store, with a proper queuing system. We provided all those aspects and we managed to employ local residents with prior post office experience. If we had just done it our way without asking their opinions first we may well have ended up climbing over hurdles.

What’s been the most successful category for you in 2016, and why?

Richard: Other than fresh and chilled foods and food to go, slush is a standout product. We have put this in all the stores now. I was in the store Monday and saw a lad in his scarf, hat and gloves serving himself a slush. I buy it in bulk and so can sell it for 50p a cup and still be making a good margin. We are selling £150-worth a week in the Marchwood store in Southampton and probably more in the San Diego Road, Gosport, store. Self-serve is the way to go with that as it’s easier for us and for customers, and it’s not as messy as you’d imagine.

Raj: We’ve seen a really good uplift in our pet category after Mars Petcare came to the store and did a great job in bringing the category to life.

Nigel: E-cigs, surprisingly. That’s certainly where I’ve seen the fastest growth. I looked around the local One Stop yesterday and noticed that they’ve reduced their tobacco cigarettes selection even more than I have, so I think I might go down the same route. We had a vaping store open locally and there was a lot of cynicism as to whether they’d survive, but they are doing really well so there’s clearly a big market.

Paul: Fresh is massive and it’s going to keep going. We’ve been looking at changing the category throughout the seasons, keeping it looking fresh and bring in a sense of occasion.