Our man in Havannah

CJ Lang’s new Spar store in Havannah St in the east end of Glasgow is more than just an outstanding newbuild store, it’s a statement of intent from a rejuvenated 100-year-old company.

by Antony Begley

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Since Colin McLean took the helm at Spar Scotland wholesaler and retailer CJ Lang early last year, every move he has made has come under close scrutiny from all quarters. Far from shrinking under the limelight, however, McLean has positively flourished and has presided over a remarkable renaissance of this iconic 100-year-old Scottish company.

Where his predecessor Scott Malcolm was a dour and largely anonymous character in the trade, McLean has made his presence felt with an energy and drive that has quickly spread to the wider Spar community in Scotland.

There’s definitely a feeling that Spar is back in the game – and not before time as far as Spar retailers are concerned.

McLean hasn’t been afraid to make tough decisions like overhauling the senior management team, offloading a sizeable portfolio of under-performing company-owned stores and rebooting the company’s newbuild stores programme.

Which takes us to the latest bricks and mortar embodiment of the rejuvenated CJ Lang approach, the newly opened Havannah St store in the east end of Glasgow.

Food for thought

Just around the corner from Tennent’s Wellpark Brewery, the new store is – to put it frankly – stunning. In fact, it’s more than just a beautifully designed, well-thought-out new store: it represents a statement of intent from CJ Lang. In some senses, Havannah St could be viewed as a distilled version of the much larger Halbeath store the company opened in March last year, but that would be doing the new unit a disservice.

Built into the ground floor of an eight-story student apartment block, the store is undeniably pretty to look at and the shopfitting by Vertex is top-drawer as always, but that’s not what makes Havannah St so special. Look a little closer and it becomes clear that Havannah St is actually built on an entirely new model, one that wouldn’t be out of place in, say, Dublin.

Which, as it turns out, is no coincidence. On the day of my visit, the day after the unofficial ‘soft’ opening and a week before the full opening, I was treated to a guided tour of Havannah St by Stephen Brown, the man Colin Mclean brought with him from Scotmid to head up CJ Lang’s food-to-go team.

Irish influence

Stephen, as anybody who knows him is aware, spends more time in Dublin than Bono – and that’s where he has drawn much of his inspiration for the next generation of company-owned Spar stores.

“I’ve been going to Dublin specifically, and Ireland more generally, for years and years because they just do convenience so well over there,” he explains. “They’re just on a different level, particularly when it comes to food-to-go, and we wanted to import some of that into our stores over here because food-to-go is critical in convenience right now, absolutely critical.”

Which partly explains why it’s tempting to come away with the impression that Havannah St is more of a high-end food-to-go outlet with a convenience store built into it, rather than the other way round.

The first sight that greets customers as they walk through the door, for instance, is an immaculately presented bank of food-to-go solutions: a F’real milkshake machine, a Skwishee machine, a Costa Coffee unit and a Dots doughnuts stand. Likewise, the entire back wall of the store is given over to a Daily Deli serve-over counter.

In between is an extensive range of chilled food-to-go products including baguettes, salads and sandwiches made fresh each day in-store in the purpose-built restaurant-grade kitchens.

Grocery gone

What’s notable by its absence is anything resembling a standard ambient grocery range and even the core traditional convenience range is pretty narrow. This is not a new store, it’s a new direction.

Let’s get one thing straight however, and it’s an important point: the store is not serving a traditional convenience store audience. The vast majority of regular custom is certain to come from just two sources: the 1,200 students that live in the apartments that surround the store, and the 1,100 council workers who occupy a nearby set of offices.

In that sense, CJ Lang can afford to take a bit of a flyer on a new ‘urban transient’ style store with food-to-go very much at its heart.

“We know it’s not a standard Spar store,” explains Brown, “and we built it expressly with these two key audiences in mind, so we could afford to be a little more adventurous than we’d be in a store that sits in the middle of a housing estate or on a main street.”

One concern of all stores that rely on students is the inevitable drop off in footfall when term times end, but that’s not an issue in this case. The student accommodation is privately owned so even when term time ends the apartments still see plenty of use. Occupancy levels are 97% so the store in theory should have year-round custom.

It’s also worth noting that a large percentage of the students – around 30% of them – are Chinese, which explains a dedicated Chinese foods bay.

Destination profit

“It’s all about making the store a destination store,” says Brown. “We were trying to add as many great reasons for customers to visit as we could, products and services that they can’t easily get anywhere else nearby.”

The Chinese range is a good example but so too is the American candy bay, the fresh baked speciality bread offer, the free-from section, the better-for-you nuts and seed display, the vaping range, the gifting island. There is very little in the store that shoppers can get anywhere else without having to jump into a car.

There is also a strong focus on local and regional sourcing with big ranges from companies like Brownings the Bakers. A strong fresh offer is also in place, in line with the healthier approach to life that today’s students appear to be taking.

“It’s not like back in the day when the staple diet for students was a bottle of vodka and a Pot Noodle,” laughs Brown. “They tend to eat much better these days and we’ve tried to cater for that in the store.”

With an Aldi just a few minutes’ walk away, the decision to almost entirely do without a grocery range makes even more sense. “We don’t see the store competing with Aldi,” muses Brown. “If customers want cheap tins of beans or a cheap loaf, they can go to Aldi. What we have done in our store is give our customers something different. It’s not all about price in this store.”

And that is the nub of the matter. Havannah St is not about offering cheaper prices than the competition or better promotions. In fact, you need to work hard to even find promotions in the store. No, the focus is clearly on building USPs and reasons why customers should visit the store – and none of those USPs involve being cheaper than the competition.

Margin makers

A desirable consequence of this approach is that most of what’s available in the store delivers exceptionally high margins, often 60% or higher. “With costs like the minimum wage rising every year the focus has to be on products and services that deliver both volume and margin,” says Brown. “Coffee, shakes, the Skwishee machine, the hot food-to-go offer, the Rollover hotdog machine, the freshly-prepared wraps and sandwiches – all of these offer great margins and our experience already is that customers are happy to pay for that enhanced experience.”

The store is also embracing quick, convenient payment options with two self-service tills that sit to the right of the manned counter. Many retailers have reported mixed findings from installing self-scan units but Brown insists that this option is important to a lot of the shoppers that come to the store.

He explains: “Today’s customers expect the option to self-checkout so we’ve given them that option. Not everyone does, of course, which is why we still have the manned tills but we’re already seeing lots of customers, particularly the students, quick to start using self-scan. It’s just the way the world is going these days.”

Conclusion

It’s hard not to be impressed by Havannah St and the bold new direction that CJ Lang is heading in, with a very clear commitment to building a destination store with a laser focus on margins and a welcome side-lining of the role of cheap prices and wall-to-wall promotions.

Convenience is at a critical point in its evolution and the industry-wide addiction to price and promotions needs to be addressed sooner rather than later.

Spar Havannah St is an inspirational example of how that challenge can be met – and is another marker laid down by Colin McLean and his team that Spar is very much back in the game in Scotland.