Inspired by an article in SLR, Inverurie retailer Scott Graham has refitted his entire store to allow him to shift much more focus onto lines that deliver at least 30% margin – and the results are spectacular.
by Antony Begley
It has unquestionably been a tough year or two for Scott Graham, one of Scotland’s most progressive and proactive retailers. Tough trading conditions were making life hard enough, but Scott was also drawing to the end of his 10-year lease and was having a difficult time working out what to do next. Although he won’t reveal the details, it was clearly a difficult negotiation but in the end he managed to hammer out a deal he was happy with and finally signed on the dotted line, committing him to another 10 years in the store.
Scott explains: “The 10-year lease I had on the shop ran out last year and I took a while to decide whether I wanted to renew it. Because of that, we had stopped properly investing in the store for the last 18 months or so, but we finally got a deal sorted to renew the lease and we knew that we had some catching up to do.”
As part of signing the new lease, Scott also had a few important decisions to make. He had to decide whether it was the right time to look for a new wholesale partner and he also mulled over the possibility of going with a symbol group for the first time. “In the end we decided to stick with the McLeish’s name, rather than go with a fascia,” he says. “And we also decided to renew our deal with JW Filshill as they were the most proactive in supporting us.”
With the new lease in place and a new supplier deal agreed, Scott decided it was the right time to look at a full refit to incorporate a lot of the ideas and concepts he’d been picking up over the last few years during visits to other stores.
Inspired by SLR
So what was the ethos behind the refit? Flatteringly enough for us, it was an interview with SLR that originally got Scott to thinking about a new strategy for his store, one that he believed would drive him well over the next decade.
“This idea for the refit actually started over a year ago when I did an interview with SLR for a cover story on ’30 being the new 20’. The idea was that – with costs rising left, right and centre – retailers now had to be looking to make 30% margins and not the 20% that was industry standard at the time. I’d been thinking about that for months and months, and I’d basically been collecting ideas that would let me grow margins in the store while also improving my offer to my customers.”
When coronavirus came along, the consummate entrepreneur in Scott saw an opportunity. “When we learned that we were able to access a £25k non-repayable coronavirus business grant and that we were also going to get a year rates-free, we realised that – combined – it would basically let us pay for the bulk of the refit,” he says.
Having said all that, it could have been so very different, as Scott recalls: “When lockdown first kicked in I initially convinced myself that we should just shut. No school kids, no workies, no office staff, no passing trade. Thankfully, I couldn’t have been more wrong!”
Stellar sales
As it turned out, the store has been performing exceptionally, averaging about 40% above pre-Covid sales levels.
With the store having dodged that particular bullet, Scott set about planning a full-scale refit, pretty much gutting the inside and exterior and starting over.
“We had originally planned to do the refit over the Easter weekend, but the way lockdown was going killed that plan stone dead,” he says. So he bided his time until, towards the end of last month, he was finally able to pull everyone together and get the team together he needed to do the refit as quickly as possible.
He says: “We spent a long time planning it but we finally swung into action in July. We closed the store on the Sunday and reopened on the Thursday. The retailer in me was desperate to keep it open if possible, just to keep the money coming in, but we just couldn’t do it. The whole shop frontage was replaced and we needed to close the store for that, so we decided to just bite the bullet and do it right.”
Keeping it local
As part of his long-standing commitment to the local community and local economy, Scott used local tradespeople for everything he could, as he comments: “We’ve always been committed to supporting the local community as much as we can, so we used local joiners and electricians and so on. The new frontage was done by a local company too. We did have to use Vertex for some specialist bits and pieces but a lot of it was done by local businesses and tradespeople.”
So, what’s new? “Just about everything,” laughs Scott. “The whole frontage was redone, as I say. The old signage looked ok, but it was tired and a bit worn. We added much bigger entrance doors and a new entrance area. The whole idea was to make the store ‘pop’ when you passed it. One of the things that so many people have said to me is that the store already looked great, so why refit it? But for me, on a high street setting like this, the store must really pop and stand out, and I think we’ve achieved that. I’m really pleased with how it’s turned out. I think it looks fantastic.”
Inside, he also concentrated on making the new store ‘pop’ and he’s certainly achieved that. “We were trying to make a store that really popped, and I was also keen to make sure that it was unique and didn’t look like any other store,” he says. “We’ve used a lot of old red brick and timber and I think it works really well. There were times during the fit-out when I thought to myself that it wasn’t coming together the way I had envisaged it, but once the signage guys came in and wrapped everything and put all the signage up it just pulled it all together and ended up just how I wanted it. I was as relieved as I was pleased!”
Higher margins
The whole concept, however, was driven by a focus on prioritising higher margin lines, whether that meant making more of them in-store or by simply giving them more shelf space. “One of the more contentious discussions before the refit was around changing the shelving in the store from 500mm base to 300mm,” he suggests. “But we decided to go for it and it’s freed up a lot of space and allowed us to add a fifth gondola. I was nervous about that too but it has really worked well and we get comments every day about how the store looks bigger, even though it’s actually the same four walls. We also moved the till point which helps make the store feel more spacious.”
The ‘30 is the new 20’ strategy manifests itself in many ways throughout the store, as Scott discusses: “We did a lot of work analysing margins from every category in the store and that informed a lot of what we chose to do. Lower margin lines and categories were either de-prioritised or removed altogether to make room for better margin lines, but obviously lines that we still believed could deliver volumes. We added a lot of new higher margin products like F’Real and Skwishee, we’ve expanded the food-to-go section from 4m to 6m, we’ve upgraded our coffee machine and we’ve added a lot of new dessert options like waffles and scooping ice cream and so on. We’ve also added a frozen range for the first time ever.“
He has also added a lot more fresh and bakery, a lot of it from local producers. “We’ve also grown our soft drinks space from 2.5m to 4m, because we were always a bit cramped in that category, and we’ve grown our wine range significantly,” he adds. “We’re just reflecting the trends we’re seeing in sales and, obviously, focusing on higher margin lines everywhere we can.”
Grocery growth
And what about that enigma of coronavirus, the grocery category? He comments: “Yes, that’s a bit of a weird one. We’ve spent years backing out of packaged grocery then coronavirus came along.” This led to a dramatic change in shopping habits, as Scott explains: “Impulse lines fell off a cliff but grocery went through the roof. I sold three tonnes of flour in six weeks at one point! I don’t think I’d sold more than about half a dozen bags of flour a week in the previous 10 years!”
As a result, the refit sees space allocated to grocery but in a way that can easily be changed or switched to something else as required. However, for the time being his customers want it.
When we spoke to Scott, the store had only been trading again for a few days after the refit, but the immediate results certainly put a smile on his face. “We re-opened on the Thursday and the first weekend was banging! We were probably about 40% above ‘normal’ sales levels during coronavirus anyway, but the weekend we re-opened we were absolutely flying. I don’t know whether it was just customers coming by for a look at the new store but on Sunday we were up 100% on a pre-Covid Sunday.“
Most satisfying of all, it was the new lines that Scott added that were driving the growth. “The scooping ice cream was just crazy. We went with a company called Stew and Drew from Lossiemouth, again just to keep it local and to have a product that no one else in Inverurie was selling and they were brilliant. I had never done ice cream before, so I had no idea what to do but they guided me through the process and at the weekend it was a massive hit. It takes a little more time and effort to serve and I’ve added another member of staff to dedicate to it, but it more than pays its way. Skwishee is also doing really well. The rest of the store has been well shopped too, so it’s definitely so far so good.“
Coronavirus effect
Scott is also quick to recognise that while coronavirus has been a frankly horrible period for most people, it has definitely helped his business in various ways. “We’ve obviously done well in terms of sales, but I see lots of evidence that the local community appreciates the fact that we’ve been there for them all the way through. It’s feels more like a true community store now than at any point in the last decade.“
Best of all, Scott has rediscovered his retailing mojo. “I’ve got the buzz back again,” he exclaims. “The last couple of years were tough but it feels like it did back when I first got the store in 2009. It’s exciting and I’m enjoying it.
It’s great to see all my ideas and plans brought to life in the store and it’s fulfilling to be able to provide a really valuable service to the local community – and to see that they appreciate it.
It’s an inspirational tale from an inspiring retailer. The only thing he needs to work on now is his timing, as he concludes: “Timing doesn’t appear to be my strong suit! When I first got this store about 11 years ago it was 2009 and the global banking system had just collapsed. And now I decided to do a major refit during the worst pandemic in living memory. Apparently, I like a challenge.”
