When most retailers open a new store, they're not too bothered if the local competition suffers. For Local4U, the offshoot of Parfetts Cash & Carry, however, while Tesco and Sainsbury's are fair game, independents have to be given a wide berth. It's vital no harm is done to the core cash & carry business.
That's why a four-man team spent a year studying the feasibility of entering convenience before Parfetts opened its first store, in New Mills, Stockport, in June - 18 months after it had acquired it.
"At the front of our mind the whole time was that we must not be too near our existing customers," says Richard Mason, retail operations manager. "We didn't want to take their business, so we have to think even harder than most about location."
The team also had to make sure the 900 sq ft store packed a punch. Following an extensive refurbishment, it now boasts new ceilings, roof, floor, internal and external lifts, steelwork, disabled ramps and improved delivery access. Unsightly pillars have been removed and a new frontage erected. The work presented operational challenges. "We kept this store open while it was refurbished but it might have been better to have closed to speed up the process," admits Mason.
There was also the question of ranging. Mason sought advice from other wholesalers with retail arms, such as AF Blakemore and Mills Group. Unlike competitors, Parfetts is shying away from a large fresh offer for the time being.
"Everyone was saying that fresh was the way forward, and we believe it probably is, but if you don't get it right there's a lot of money to be lost," says Mason. "So we are sticking with what we know at first, and concentrating on convenience items such as ready meals and top-up shopping. In time, and at bigger stores, we will look to explore fresh lines but we have to walk before we can run. We're not trying to bring a new concept to the market, but offer a traditional c-store."
The New Mills store will retain the focus on drinks it had in its previous guise as an off-licence, while its chilled section makes up about 10% of the store. Local 4U is using Parfetts' Go Local display stands and PoS material for promotions, and has installed digital advertising.
It also has an in-store ATM and Payzone terminal and a lottery terminal is on the to-do list. Early sales have been encouraging, running at about £12,000 a week, and are expected to hit £20,000.
"It's been a very successful first few months," says MD Steve Parfett. "We're on a steep learning curve but I'm very proud of my team. They have created a truly modern store with high standards."
Local 4U pulls in trade from Swizzels Matlow factory workers and also commuters to Stockport.
"'Wow' has been the typical response when customers have come in," says supervisor Pete Higginbottom. "The store has played a part in New Mills' life for decades. It's a very close-knit community so a successful local store matters."
Three more sites have now been identified, and the intention is to open eight company-owned Local4Us within a year, all within a 50-mile radius of Parfetts' depot in Somercotes, Derbyshire.
Future stores will have a larger grocery offer. "Our range is restricted by size at New Mills, but for larger stores we intend introducing food to go and using local bakers and butchers as suppliers," says Mason.
Once Parfetts is confident the concept is a goer, Local4U will be rolled out to independents as a fascia. For now, the biggest challenge is acquiring sites. "You have to be quick or the best sites are snapped up by the multiples," says Mason, commenting on competition from Tesco for the New Mills store. "If we waited for the perfect site we could still be looking now. We were offered the store by a customer at our C&C business and decided it was an opportunity we couldn't miss."n