The newly appointed MD of Kwik Save, Paul Niklas, has exclusively revealed to The Grocer his plans for the 171 stores bought from Somerfield for an undisclosed sum this week by acquisition vehicle Back to the Future.
The strategy will revolve around returning Kwik Save to its roots as a grocery-focused discount business. And own label and non-food ranges are to be axed as Niklas claimed they interfered with its message.
“We will pursue a simplified product offering, trusting in quality grocery brands,” said Niklas. “We will stock more branded lines and there will be no own label ranges.”
He added that simplifying Kwik Save would involve some range rationalisation. But he said that talks had begun to increase the amount of regionally sourced products in a bid to boost the chain’s reputation as a community retailer.
He avoided the term ‘discounter’, saying simply: “Pricing will be consistent and affordable on the basis of quality brands.”
The acquired Kwik Save stores would be revamped and refreshed, he said, adding that many were looking tired and had been neglected.
However, the immediate focus will be on renegotiating supplier contracts and settling into the company’s newly acquired Huddersfield HQ.
The three-storey, 10,000 sq ft base is expected to house 100 staff, while recruitment is under way for another 120 to help with the smooth running of head office and undermanned stores. A total of 3,000 Kwik Save employees are set to transfer over to BTTF following the deal.
Niklas said another challenge was reorganising distribution through the depot it has bought from Somerfield in Sherburn-in-Elmet, North Yorkshire.
The initial handling of that process has been criticised by some suppliers.They said deliveries to former Kwik Save depots had been rejected without warning as they were abruptly transformed into dedicated Somerfield depots.
Niklas, however, said: “That’s news to me. We’re aiming for a continuation of contracts with all our suppliers.”
Once the initial practicalities had been addressed, he said he expected to formulate a detailed strategy in three months.
Somerfield plans to convert 102 remaining Kwik Save stores to the Somerfield fascia, giving it more than 1,000 outlets. A further 77 have been sold off to a range of retailers, with four going to Iceland and Netto netting 19, which will transfer to its ownership on April 5. Aldi is understood to have bought 20 and Lidl is believed to have acquired seven.
Property investors have snapped up most of the rest. Somerfield has made more than £200m through the combined sale of the Kwik Save stores.
The changes are expected to lead to the loss of at least 500 jobs out of 1,800 at Somerfield’s Bristol HQ. Consultations have already begun.
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Rod Addy