The convenience sector is in a period of seismic change, even if the reverberations can’t be fully felt yet, and for independent retailers, the benefits of joining symbols groups are growing as competition intensifies, prompting SLR to examine the playing field. by Kevin Scott
When Costcutter announced in March that it was leaving Nisa to join forces with Palmer & Harvey, launching a new buying group in the process, it was a sign that confidence in the convenience symbol arena was high, and growing. Last month, the move was cleared by the OFT, with Darcy Willson-Rymer, CEO of Costcutter Supermarkets Group, describing the decision as “great news”, adding that the company would now “press ahead at pace, so that Mace, Supershop and Your Store brands moving across to Costcutter are taking advantage of our market leading retail service and support as soon as possible.”
The new group, The Buyco, will also begin serving Costcutter stores when its distribution agreement with Nisa ends in June 2014. That will certainly change Nisa’s business model and Willson-Rymer said at the time that the deal was just the beginning of consolidation in the symbol groups. He added: “With the way the supermarkets are moving into convenience what we will see are groups looking for better marketing support.” That, in a nutshell, is one of the major benefits of being part of a symbol group. And with the rate at which supermarkets are moving into the convenience space, independent retailers are all too aware that they need as much assistance as possible – whether that be through marketing, buying power, promotional activity, or the many aspects of back-end support that are available from symbol groups.
Tesco and Sainsbury’s convenience stores continue to open apace and Morrisons has finally targeted Scotland with its M-Local brand. For indies, it means increased competition and even though more consumers are visiting c-stores, and more money is being spent in c-stores than ever before, running a successful store is getting harder – retailers need to continue to develop their offering, show that they can vie with the big boys with their promotional deals, and do all of this in bright, clean, friendly stores. Being part of a symbol group can help achieve all this. In fact, it is estimated that being part of a symbol group can be worth up to an extra 33% in sales. And symbol groups have grown their share of the convenience-store market from 22% in 2002 to almost 40% in 2012. According to recent IGD data, this could rise to 50% by 2020.
The figures highlight the role symbols are playing in improving the quality of a convenience sector that will outgrow the overall food and grocery market for the foreseeable future and could top £43.6bn by 2017, from £33.9bn today. So as a retailer, whether currently unaffiliated and with complete freedom, or as a member of a symbol group but currently looking to see what else is on offer, there is a huge array of options out there, and in a fast-changing landscape, finding the perfect fit to match your business goals can be a lengthy process. Over the following pages we’ll be examining what many of the major symbol groups can offer, and what they’ve been doing in Scotland this year. Armed with that knowledge, retailers can then contact any or all of these groups and begin a discussion that could transform their own business.
Costcutter
Costcutter has truly found its place in Scotland over the last number of years, and this was cemented back in June when Gordon and Debbie Mair, owners of Costcutter Aviemore, were named Scottish Local Retailer of the Year at the SLR Awards. While the firm hasn’t concentrated on Scotland throughout its existence, it is now a serious player with over 26 years experience. The company is not resting on its laurels though, as highlighted above.
Through the creation of a new buying company called The BuyCo, Costcutter Supermarkets Group will give its members access to significantly more buying power – just one of the many benefits of being part of our group. The groups claims that its flexible range of fascia brands are designed to help independent retailers make the most of their stores, and are all backed-up by a bespoke and ever-growing tool kit of industry-leading support services.
Its distinct fascias also present different options for retailers, giving them the opportunity to get the right fascia for their business. Kwiksave provides retailers with a flexible option with the support you would expect from a famous high street name. In its new convenience store format it offers low prices and great value to its customers, reinforced with a brand they know and trust. Costcutter itself has strong brand heritage, giving customers confidence before they have walked into the store, knowing it is a brand that delivers on its promises. This gives retailers a platform from which to grow their business and is backed up with the support and advice of Costcutter’s expert team.
Angela Barber, Trading Director, Costcutter Supermarkets Group, comments: “Consumer demand for regional products is growing which is why Costcutter Supermarkets Group has continued to invest in its Direct Supplier Directory with the launch of a new website which gives retailers the ability to quickly identify local products available in their area, with the ease of purchasing them centrally to save administration time for retailers. We now have over 400 regional suppliers in the directory and demand is rapidly growing.” This increased focus on local products is increasing across every symbol group, as is investment in IT infrastructure.
Kevin Widdrington, IT Director, Costcutter Supermarkets Group, adds: “We are investing heavily in our IT systems and 2013 is a big year for Costcutter. A totally new version of our industry renowned EPoS system, CPoS, is nearing launch and has been developed in conjunction with our retailers. The feedback they have provided having used it day in, day out has informed several new features. In addition we have developed a new Order Capture System that is currently being used in our company owned stores that have migrated to the new buy and supply system and is ready for the full transition for all of our members.” The group is also developing a new retailer portal which will house all of the new systems and streamline the IT functions for members. On the marketing front, Costcutter provides its members with one of the most robust and targeted marketing strategies which includes themed POS, three-weekly promotional campaigns featuring hundreds of offers, customer leaflets and national press advertising.
Dedicated in-store radio stations for both Costcutter and kwiksave brands are also available. Barber adds: “Retailers continue to benefit from our expert development team that uses the latest technology to design stores that maximise the available space to generate maximum sales. Coupled to this our category management team produce live image planograms, giving advice on product position and store flow to increase sales.”
Nisa
While Costcutter retailers will be lining up questions over the new distribution structure set to commence next year, Nisa retailers will be wondering who, if anyone, will be stepping in to fill the void left by Costcutter. Chief Executive Neil Turton remains confident the business can do that of its own accord if existing members spend more with Nisa – while a deal with McColl’s bring also go some way top make up the revenue that will be lost with Costcutter. The fact remains that over the course of the past year more and more independent Scottish retailers are choosing to join Nisa to benefit from its range of products, own label range and profit making promotions as well as its Making A Difference Locally charity.
Joining Nisa can cost retailers as little as £860+VAT per year and its members benefit from regular visits from retailer development managers who help provide key support and business advice and ideas. Nisa offers its retail members a range of over 12,000 skus and a strong three-weekly promotional programme with great offers such as ‘buy 1 get 2 free’. Nisa also invests money in ad hoc promotional deals to help support its members. For example in 2013, and for the second consecutive year, the company invested £10m in ‘WOW’ deals to help drive customers into stores during traditionally quieter periods for retailers – typically throughout January and February. Nisa has three own label ranges, Value, Heritage and Heritage Select – the more premium brand.
In the past year Nisa has relaunched over 50 of its Heritage products to help its members and every single Heritage line also contributes to the Making A Difference Locally charity, which was created to enable retailers to donate money from selected products sold instore to local charities or good causes. The company strategy is to help Nisa retailers be better retailers in the market place and in order to do this the company has implemented lots of new concepts in order to give its retail members the best support and communication. For example the company’s Circle of Care launched which provides maximum support to retailers who join the company.
In 2012, at the request of its members, the symbol group appointed a training manager to help members to develop their employees’ knowledge as well as developing a qualification and specifically designed training for Nisa retailers. This helps Nisa to provide a better service for its members and develop the standards of service within stores. In addition to the training manager assisting with the developing of services within stores, Nisa also conducts Mystery Shopper audits and Test Purchases which see all symbol group members being visited every quarter and rated on the service they give to their customers.
Nisa invests heavily in consumer advertising including a bespoke offer leaflet which is distributed to five million homes throughout the UK on a three-weekly period. In addition to the leaflet, Nisa also has regular adverts in the national tabloid newspapers such as the Daily Record, Daily Mail and Daily Express. On the back of Nisa’s success with television advertising, it has, for the third consecutive year, produced a brand new television advert featuring Wolfred, the Nisa dog.
The benefits delivered by the Nisa business model are wide ranging, and its mutual style means that members also take a share of its profits. In August 2013 the company announced that £3m is to be paid to its members in the form of a surplus distribution, with a further £0.6m paid in dividend payments. Nisa says its message is clear: it seeks to make money for independent retailers and not out of them.
Best-one, by Bestway
In the 10 years since Best-one was launched by Bestway, the company has grown to have 950 stores nationally across the UK, with 102 trading in Scotland. “It’s about much more than simply fascia and promotions,” says James Hall, Group Director of Symbol, Bestway. “A good symbol group invests in its members to help them better meet evolving consumer needs for shopping little and often.
This is the changing face of convenience – and independents need to keep pace if they are to be successful in the future.” Driven by the long-term economic downturn, shoppers are using their local shops more, with more frequent, smaller trips. It’s a trend exacerbated by busy lifestyles and high fuel prices. This puts independent retailers in a strong position, provided they cater for the changing ways in which shoppers are using their stores. “At Best-one we know that independent retailers need all the support they can get,” Hall explains. “That’s why we’re working to help them better understand why a shopper is in their store and what they’re looking to buy.
Now more than ever, independents must have the right mix so that every square foot works as hard as it can for them.” Every Best-one retailer undergoes a review of their sales and profitability potential to identify the areas in their store that underperform and can be improved taking into account modern consumers’ shopping needs. As a result a revised store layout, based on shopping missions rather than traditional category-based layouts, includes distinct food-for-now, take-home and emergency top-up areas.
The offer is underpinned by Bestway’s commitment to provide the lowest prices and widest range in the wholesale sector and a drop shipment network of 500 suppliers all at centrally-negotiated terms. The Best-in and Best-in Essentials own label ranges offer retailers and their customers a quality alternative to branded equivalents. Best-one also offers a free EPoS system and fascia for qualifying retailers and its marketing programme and loyalty card are designed to attract shoppers and have them spend more in-store.
The four-weekly promotions feature the strongest deals negotiated across the Bestway group so retailers can be sure they’re getting the best deals possible in the wholesale sector to pass on to their customers. Hall concludes: “Scotland offers different challenges from other parts of the UK – not only different regulations and legislation, but also best-sellers are often different in certain categories. Best-one BDEs are committed to working with retailers to ensure greater profitability throughout our 102 sites.
I am also please to announce that the first of our new Best-one+ format, which places a greater emphasis on fresh and chilled produce, is due to open in Aberdeen this month. Best-one’s continual growth in Scotland shows that independent retailers who offer shoppers a truly convenient shopping experience, demonstrate value for money and engage with their local communities are well able to compete. At Best-one we help retailers to meet these challenges and help them to secure their future.”
Xtra-Local
Best-one isn’t the only offer from the Bestway stable either. Through its Batley’s Cash & Carry brand, comes Xtra Local, which offers customers exclusive member deals running over a four weekly promotional period. Essentially set up as a retail club, Xtra Local has developed into a national disciplined group which offers retailers the opportunity to compete on price and promote effectively to their customers. Xtra Local is open to all retailers who wish to take their independent store to the next level. Currently there are 187 Xtra Local retailers across Scotland Membership of Xtra Local is entirely free but members have to be forward-thinking and reliable retailers who agree to purchase all promotions in each given period, display provided POS and distribute consumer leaflets to ensure agreed promotional mechanics are executed in-store.
Retailers benefit from a comprehensive marketing campaign with 13 promotional cycles throughout the year covering all the major categories and the current CORE cash-back discount initiative. In addition each member is kept fully up-to date with the latest trends and category information via their own dedicated Impact customer magazine. Impact gets to the heart of a different key category each issue offers in-depth analysis on how to stock, display and promote the right ranges to develop sales and margins.
A striking Xtra Local fascia is also available to qualifying retailers and which projects a professional image for the store while still retaining the retailer’s trading name providing another example of how Xtra Local works with its members to signpost their store while maintaining their own identity. To encourage consumer footfall, 300 personalised promotional consumer leaflets for each activity alongside shelf barkers and posters are available to each member to reach out to their local community. A key element of Xtra Local is fantastic promotions available to members. Promotions are negotiated centrally by the Bestway group so retailers are assured of getting the best possible prices and consequently the best possible margins. Club members also have direct access to their local cash and carry depot support Retailers also need to agree to stock a defined number of own-label products and have access to over 600 own-label products, including Best-in, across all key categories.
As part of the retail club agreement, retailers must stock 40 top selling grocery SKUs and the top five licensed SKUs. Convenience retailing continues to grow year on year and 2013 will be no different. Xtra Local is working hard to ensure the right promotions, at the right prices, are delivered so as to ensure 2013 is a winning year for retailers allowing them to make the most of every opportunity that comes their way.
Spar
Spar has the advantage of being one of the most internationally recognised convenience store brands in existence. It’s a brand that’s also hugely well-known in Scotland. The group benefits from having extensive advertising support – including a new TV campaign, which marks Spar’s return to screens after a bit of an on-screen sabbatical.
The company also has an extensive own-label range of over 1,000 lines for members and a wide range of promotional items available on three-weekly cycles. There are also store development packages which provide retailers with a dedicated development manager that will work with the retailer on a long-term basis. Members can save £2,500 in their first year while receiving up to £20,000 to help refit their store. This includes free project management of the development. There is also inclusion in the new store introduction scheme and participation within fresh food sales projects. Bespoke advertising is available for each store, as well as benefitting from the national campaigns, while part of the latest package for members includes lower cost prices and additional margin opportunities through over-riders on all purchases.
Spar has also recently opened its first Spar-branded forecourt store. Spar UK and Harvest Energy revealed the branded forecourt concept, which is designed to help convenience retailers compete against the multiples and major oil companies, in April 2013. Mark Steven, Spar UK Business Development Controller, said: “I am delighted that our Spar branded forecourt concept is now live. Retailers can now gain access to one of the most competitive fuel supply deals in the market. The alliance offers retailers a host of benefits, and we are looking forward to opening new Spar branded forecourts in the near future.”
Lifestyle Express, from Landmark Wholesale
From the first line of its pitch, Landmark is keen to highlight to retailers the financial incentives of being part of the Lifestyle Express group. Retailers can receive up to £1,000 Cash Back on top of an already comprehensive, award-winning and highly effective, yet free, package. Lifestyle Express is Landmark Wholesale’s professional store re-development programme, offering retailers support and impartial advice on pricing, promotions, product ranging, own-brand, store re-fits, layout, merchandising and technology. The group also provides comprehensive category-focussed planograms for all areas of the store based on what actually sells and is proven to work. This is reviewed every year to keep them up to date. Retailers also have access to excellent promotional initiatives, competitive pricing, a familiar and recognisable brand, enhanced support, advice and marketing to help them grow their businesses.
What’s more it’s free to join and typical average sales growth of 30% is achieved after conversion to Lifestyle Express. Over 350 SKUs are available in the company’s own-brand ranges and new products are developed and added regularly, with both ‘Lifestyle’ and ‘Lifestyle Value’ ranges available. The own brand products guarantee a minimum 30% POR across the entire range. Lifestyle own brand will build shopper loyalty by offering a quality, low price alternatives to the major brands.
Core Range Advisors are also available to retailers. Every month, one of our Core Range Advisors will visit your Store and check if you’re stocking the Best Selling products, thereby helping you to maximise your sales and profits. At the end of each Store visit they will leave a ‘shopping list’ aimed at helping you on your next visit to your local Landmark Wholesale Cash & Carry Depot. Key lines are promoted every month nationally with regional additions from your local Cash & Carry for Lifestyle Express Store promotions. Landmark Wholesale Cash & Carries also offer three-weekly Counter Attack promotions and quarterly Retailer Winners promotions to give Retailers great promotions year round. Raj Singh, Lifestyle Express Retailer, says: “The Lifestyle Express Retail Development Team from Landmark Wholesale, working in unison with the United Wholesale Grocer Member Team has done a terrific job of guiding, advising and supporting us through the whole development process from start to finish. More importantly the team is always only a phone call away if we have any problems or need any advice or support. We cannot recommend them enough!”
Londis
By partnering with Londis, independent retailers are best placed to meet their customers’ needs and see their sales rocket. With specialist expertise and over 125 independent retailers in the Scottish estate, Londis can offer tailored support for all businesses. Londis aims to ensure its prices are the most competitive in the market. It invests annually to enable 300 key lines to be price-matched on a weekly basis and a further 900 to be price-checked against leading competitors on a monthly basis.
Through working with its retailers, it sets a compelling calendar of wholesale and retail promotions which focuses on delivering margin. Weekly ‘WOW’ deals which have included Surf at £2.70, lead the market, driving footfall to Londis stores and helping to increase in-store spend. Londis is a flexible symbol partner that has a service package to suit any store from 3,000 to 500sq ft. Retailers can join as a Londis Partner where they receive free membership, a free fascia and free promotional leaflets. Retailers can also choose to become a Brand Essentials partner, receiving a higher level of business development support and an additional loyalty payment in return for their commitment to the brand. All Londis retailers receive compelling promotions, daily support from the experienced team and access to the group’s extensive product range.
Walter Bryson of Prestwick and Londis Retailer for 12 years, picked up the accolade of Forecourt Retailer of the Year title at this year’s SLR Awards. Walter’s store also won him the title of Scottish Local Retailer of the Year in 2011. According to latest research from Him!, consumers now spend less on their weekly shop in big supermarkets and do more of their grocery shopping locally, with regular top-up shops in local convenience stores for fresh.
To help retailers to best capitalise on this growing category, Londis has a dedicated team of fresh trainers who provide retailers with ongoing industry-leading advice, information to increase sales, merchandise the fixture, grow margins and drive footfall in stores. Last year, in just three months, this advice helped to increase the sales of fresh produce by an average of 28% across participating stores. Londis retailers also have access to over 1,400 fresh, 400 frozen and 160 bread lines with products fitting into clear price points. The price-marked packs offer everyday low prices, whilst ensuring retailers’ margins are protected across the range. Londis also offers its retailers an exclusive award winning online ordering tool, Webshop, which has been a huge success with its retailers since its launch last year.
The launch target of 800 retailers signing-up was significantly exceeded with over 1,200 retailers now regularly ordering online. It’s easy to navigate and has full search functionality, storing orders for easy repeats. Driving sales, embracing technology, simplifying the business model and reducing retailers’ costs are all priorities for Londis in 2013. One of the biggest developments has been the centralisation of key categories and suppliers, including bread and frozen. Londis retailers are now able to order more products on their main Londis order, giving them more flexibility and saving them time spent on separate orders and deliveries. Londis has also recently introduced The Londis Family, a new framework designed to help Londis retailers share best practice and ideas to help grow their businesses.
Consisting of three new programmes, Cluster Families, the Londis Mentor Scheme and the Londis Voice, the Londis Family creates a close-knit family network of retailers, helping them to share the challenges and experiences of running a convenience store for mutual success.
KeyStore, from JW Filshill
As a symbol group firmly rooted in Scotland, KeyStore has a reputation for providing professional, ambitious convenience store operators with a trading format that is flexible and allows them to do what they do best – be independent. As KeyStore wholesaler JW Filshill’s Sales Director, Ian McDonald, explains: “A real point of difference we have over other groups is that we will provide a tailor-made package for you – we know that there is no ‘one size fits all’ trading format so we work in partnership with our retailers to find the solution that provides both flexibility and a competitive edge in the marketplace.”
For the customer, KeyStore offers familiarity and the peace of mind that they will always get their bread, milk and other everyday essentials in their local store. But what they can also guarantee is a friendly, warm welcome from staff and a shop that is clean, well laid out, well stocked and offering a pleasant shopping environment. Add ongoing promotions to the mix and your customers will come back time and time again. Of course, the best way to find out how KeyStore operates is to visit a store already trading under the eye-catching blue and yellow fascia. McDonald says: “We will sit down with any retailer interested in joining the KeyStore group and outline all the benefits of membership. But we also recommend that you speak to existing KeyStore retailers because they are the ones operating at the sharp end – they are the ones who are best placed to tell you how KeyStore has helped them grow and develop their businesses.” Retailers should also take on board Filshill’s many years of experience.
It’s a family company, based at Hillington in Glasgow, and widely recognised as a driving force in the Scottish convenience retail marketplace. As a six-times winner of the Scottish Wholesale Association’s prestigious Champion of Champions award and Scotland’s Most Innovative Haulier in 2012, the company goes the extra mile to understands the needs of the convenience retailer and has fine-tuned its operation accordingly.
Currently supplying 168 independent KeyStore outlets in Scotland, the company is a member of Today’s Wholesale Services. All KeyStore retailers qualify for membership of the Scottish Grocers’ Federation or Association of Convenience Stores. McDonald is not surprised that a growing number of independents are now seeking to adopt a more disciplined approach to running their business. “Trading as an independent means you have freedom to run your business the way you choose,” he points out. “But it also means that you need to have certain disciplines in place if your business is going to have any chance of growing and developing. We can help you achieve this. Our fascia is instantly recognisable and our mix of services and benefits for retailers has helped many independents up their game and become more professional.
We also offer a low membership fee and loyalty bonus scheme which is attractive to retailers.” Increased investment in marketing, promotions and improving operating cost efficiencies through technology have helped JW Filshill stay ahead of the game in the current challenging trading environment. Scotland’s oldest independent food and drink wholesaler has ploughed significant resources into consumer-facing marketing and advertising campaigns to support KeyStore retailers. Earlier this year, the company launched its new Hydro Meter app to provide consumers with another tool to help them live a healthier lifestyle. A collaboration with Highland Spring, the leading UK-produced brand of bottled water, the free app for iPhones enables consumers to monitor their water consumption on the go, showing how hydrated you are by providing eight notifications throughout the day until you are 100% hydrated.
Using geofencing technology, it also alerts shoppers when they are within 500 metres of a KeyStore and notifies them of any exclusive Highland Spring promotions available in the store at that particular time, such as two 750ml bottles for £1. Consumers, who can download the app via a QR code on POS in-store which takes them straight to the App Store, can also use it to make “brag” posts on Facebook and Twitter. Representing a major investment for JW Filshill and recognising steps being taken by the Scottish Government to encourage Scots to adopt a healthier lifestyle and drink less alcohol, the app has been heavily promoted and is the latest in a long line of forward-thinking initiatives from JW Filshill. In 2012, JW Filshill also launched a bespoke Epos system designed to save retailers both time and money, help them run their businesses more cost-efficiently and maximise sales opportunities. The RE-SCAN system is available free on loan to all of JW Filshill’s KeyStore customers, and incorporates various functions that enable retailers to enhance margins. It also updates retail prices automatically.
Premier by Booker
Premier remains the biggest convenience store brand in the UK, with over 2,750 stores. With no joining or membership fees it’s immediately an attractive proposition – then add in that Premier also provides a fascia and imagery free of charge and you begin to understand why it’s the biggest.
And why it’s managed to grow store numbers by 9% in the last year. All of which has taken Premier closer to being the a £1bn turnover business – one of Booker’s stated aims for the symbol group. As part of Booker, Premier retailers have access to a vast range of products, along with low prices and a great service. Among Booker’s exclusive own-brands are Euro Shopper, Happy Shopper, Butcher’s Market and Farm Fresh, all combining to ensure Premier retailers have own-brand products that consumers want to buy; providing both quality and value to satisfy every shopper. They also provide high margins with Euro Shopper and Happy Shopper guaranteeing 30% POR for retailers. The other major plus point for Premier retailers is the backing of Booker itself.
This ensures Premier has market-leading consumer deals and added value promotions such as give-aways and free prize draws to increase both sales and footfall in stores. As well as great value for shoppers Premier members can also benefit from up to Premier also has three store formats: Big, Medium and Small. The big format is specifically for stores over 2000 sq ft, the medium for stores between 800-2000 sq ft and the small format for those stores between 500-800 sq ft, which is branded Premier Express. Head of Premier, Martin Swadling, says; “Premier’s convenience store and small store offer delivers more profits for retailer and a better shopper experience thanks to the UK’s biggest sakes force and cash and carry branch network to market-leading promotions, among other things.”
The group also realises the importance of the local aspect of independent stores. All stores have an internal logo that includes the name of the store to bring Premier closer to the local community and still maintain the character and entrepreneurial spirit of the retailer. The national brand of Premier and the individual store name come together through their fascia, leaflets, internal signage, shelf edge labels and uniforms to maintain the local community aspect of the store.
All supporting POS including posters, shelf barkers and 1,000 personalised leaflets are free to charge to retailers. Members can also benefit from a range of discounts and savings on operating costs such as business insurance and energy bills. There is also a team of over 100 dedicated Sales & Merchandising managers who are there to offer Premier retailers the best possible advice to drive their sales and profitability.
