The Spar conference in Cape Town, South Africa, has been described by bosses at the symbol group as one of the most significant in its history - with good reason. As speaker after speaker acknowledged from the platform, the world of convenience retailing is changing rapidly and Spar, like its independent rivals, needs to evolve at pace if it is to exploit the opportunities opening up, or it will be threatened with extinction.
Delegates might have thought they had heard it all before - particularly calls for greater discipline, better store standards and more collaboration within the disparate Spar family. But this time, there was a different vibe; you got the feeling that while some of the words may be the same, the group is starting to dance to a more impressive beat.
Setting the tone was MD Jerry Marwood, who told delegates: “Our vision is to be the biggest and best convenience retailer in the UK.” As corporate mission statements go, you have to say it is beautifully simple, if a tad ambitious. But Marwood and his colleagues are not fools. They believe Spar should be aiming for the top spot and outlined a clear four-pronged strategy they believe will realise their ambitions.
Yet they also acknowledge that Spar will have to develop much deeper collaboration between retailers, wholesalers and suppliers. That, for some, will mean being prepared to break the habits of a lifetime and do what they said they would do, rather than going off and doing their own thing.
Spar’s critics will no doubt point to its seemingly complex, almost federalist, structure - six wholesalers, 1,600 owners and more than 2,700 stores - as one very good reason why the group will stumble.
Not so, said Spar chairman Peter Blakemore, who said it was its entrepreneurial spirit and structure that had been at the heart of its success, allowing it to be a pioneer and an innovator in convenience. “Our management team is 1,600 of the most experienced and most able operators of c-stores in the UK.”
Blakemore believes this is what will set it apart from the budding franchise groups and the multiples who are its newest rivals: “Tesco Express stores are designed by a head office in Cheshunt and controlled by one man - Colin Holmes. Sainsbury Local is controlled by the glass palace in Holborn. We can be much better than the corporate monoliths. But we all recognise that flexibility must not lead to anarchy.”
Therein lies the rub. If Spar is to be better than Tesco Express, which achieves a sales density of £22 per sq ft compared with Spar’s £11, then its members must truly collaborate on essentials such as store standards and compliance. High standards, along with good ranging and efficient, friendly service, are what consumers expect from every c-store. As marketing director Susan Darbyshire put it: “These are the starters for 10. Not being really different means consumers are left looking at prices.”
So what does Spar have to do to differentiate itself from its rivals? She hopes the answers will come out of a major piece of research involving the group’s retailers, wholesalers and customers. The work, starting this week, will define the Spar experience from every perspective as well as getting close and personal with shoppers.
Existing research shows that consumers are keen to support local businesses. While there’s no doubt Spar should do more to shout about the fact it is a network of independents, not a faceless corporation, Darbyshire is not convinced this is by itself a compelling enough reason for consumers to shop in one of its stores. “Once we know what our customers want, we can create an offer that is totally unique, with marketing support to differentiate us and provide compelling reasons to use us more often.”
Putting shoppers at the heart of the business is part of creating the Spar of the future. And delegates heard about a raft of other initiatives. Take Operation Excellence - a store improvement programme designed to help all retail members raise standards and profits and which should be launched in April. Then there’s the Virtual Academy, an impressive web-based training and information tool for retailers that should go live in January. And there is Smart Savings, a buying scheme that allows stores to reduce overheads that has been extended so that savings now account to £7m.
It’s all good stuff. And there were other impressive signs that Spar means business. Through its inbound supply chain project with Exel, Spar will consolidate the buying of a range of goods through one point, which could ultimately lead to savings of £6m a year. A case of Spar thinking what would previously have been unthinkable? You bet. As is the work now under way on turning Spar brand into a true brand of choice for the business and creating a core range for wholesalers and retailers that will help Spar leverage its relationships with suppliers.
As we reported last week (The Grocer, November 6, p4), Marwood also wants to develop world-class retail solutions. That could involve the introduction of new formats or being flexible enough to embrace different ways of doing business - whether it is introducing franchise schemes or driving more corporate deals (a small trial under way with Thresher is a sign of things come).
With so much work under way, there’s no denying a new Spar is being forged. It will be fascinating to see how far it has been able to grasp the opportunities it now faces by the time it gathers for its next national conference - in Cancun, Mexico, in 2006.
Spar’s ambition is to be the biggest and best convenience retailer in the business, says MD Jerry Marwood. And he wants the symbol group to achieve that goal by adopting a four-point strategy:
Spar will only achieve its ambition, says Marwood, if it is able to drive much greater collaboration between retailers, wholesalers and suppliers. He admits: “There’s no silver bullet. We need to be good at lots of things at the same time.”
Get it all right, and he believes Spar can build into a chain of 5,000 stores - operating to the highest standards.