Suppliers are key, says Sainsbury’s Local boss Simon Twigger
On Wednesday morning, Sainsbury’s opened its newest convenience store, in Southsea, Portsmouth. A bog standard, unassuming neighbourhood format store it is nevertheless an important milestone for the retailer - its 500th Sainsbury’s Local.
With sales of £1.3bn, around 11,000 staff and growth of nearly 20% year-on-year, the Sainsbury’s Local estate has come a long way since opening its first store in Hammersmith, London in 1998. And it’s no exaggeration to suggest that Local has played a key role in Sainsbury’s strong performance in recent years, and is continuing to open c-stores at the breakneck speed of one to two a week, while dialling down its big box space requirements.
So how big can it get? In his first interview since taking on the role seven months ago, convenience director Simon Twigger concedes there’s still a lot for Sainsbury’s Local both to learn and to do.
Suppliers have a crucial role to play, too. Twigger believes suppliers haven’t restructured themselves to the evolving convenience sector and a new breed of operators - the multiples.
Average SKUs per store: 3,000
Average items per trip: 4
Average time in store: 6.5 minutes
Best selling line: loose bananas
“Yes, there is the wholesale, independent and symbol group model, but there is also now a group of multiple operating and behaving differently,” Twigger explains. “We’re still getting the crazy promotions and the wrong pack sizes, so we need to all work together to translate the pack sizes and get the price points right. There’s no point having the wrong pack size on shelf because it won’t sell.
“Sainsbury’s has 180 smaller supermarkets that could also do with that pack size,” he adds.
Whether suppliers respond or not, Sainsbury’s has a number of initiatives planned for Local. As well as more stores, further refits are on the cards, with 12 stores refurbished this year.
Ranges will also continue to evolve for Sainsbury’s three Local formats - neighbourhood, fresh local and food on the move. “We look at the catchment and decide what store is relevant,” Twigger explains. “We’ll soon be opening a 1,500 sq ft food on the move on Fleet Street. We’ll look at time-of-day merchandising, focusing on lunchtime missions, meals for tonight, and a bit of breakfast.”
This is where Sainsbury’s Nectar data really comes into its own, Twigger says. Using the data, Sainsbury’s can identify what shoppers are buying in particular areas and range accordingly. “I’ve got 50 to 60 stores in student-dominated areas. They don’t buy much petfood, or flowers, but do buy alcohol, pasta and sauces, so we can be flexible in our offer.”
Nectar is an untapped opportunity for Sainsbury’s c-stores. Only 17 currently give out vouchers, even though some stores have the same rate of Nectar participation as their supermarket counterparts.
“Once you understand the shopping mission you can really use it as a tool in convenience. Nectar can only grow in terms of its usage,” he promises.
Sainsbury’s also plans to open more joint stores with existing businesses, following a novel site-sharing agreement with Fisher’s of Gerrards Cross, set to open next month.
“We’ve had some discussions with other businesses where the rent they are being asked to pay and the business they are running means that if we could use a bit of the store we could make the space work harder,” Twigger says. “It’s a great opportunity to work in a different way and help someone else be successful.”
And Twigger dismisses claims Sainsbury’s Locals kill off other trade. “There are 47,000 convenience operators out there. Sainsbury’s accounts for 500 of them,” he insists. “If you’ve got a good, high-quality operator on the high street, be it us or an independent, it is good for everyone, creating footfall as people visit more frequently, which everyone can survive off.”