Sean McAllister reports on developments at five small but sharp companies we identified as rising stars in February
The first time we reported on The Grocer’s five Ones To Watch (The Grocer, February 21, 2004), we said if you’re not big in the competitive world of grocery, then you have to be clever.
Well, if that’s the case, our Ones to Watch should all be applying for membership of Mensa. All of them have had a successful first half of 2004.
Two, Cook and Cooltrader, have opened new stores and the others have all undertaken new initiatives to increase their amount of business.
Hudson’s has revamped its customer service and been immediately rewarded with a hefty uplift in sales. Jeroboams has made the most of a bright start to the summer and Eismann has introduced a new catalogue which has boosted sales.
And, rightly, every one of the companies is attracting attention for their achievements. Hudson’s has just been voted the best independent retailer of the year 2004 in the Booker Prize for Excellence Awards for the second year in a row.
Cook is receiving franchise requests and interest from venture capitalists on a weekly basis, while Cooltrader has gone one stage further and actually completed a deal with a private equity house.
Jeroboams is set to be besieged by lifestyle and foodie magazines keen to learn about its Christmas offerings and Eismann is proving an attractive proposition for entrepreneurs who are hoping to set up their own franchised business.
Ones to Watch? Clearly these businesses are already being favourably scrutinised by the industry and you can be sure we’ll be hearing a lot more about their progress over the coming months.
Frozen food specialist Eismann has had a positive first year of independence.
The direct sales operation has exceeded by 50% its profit target, set when Eismann gained independent status in an MBO led by managing director Karl Schneider in July 2003. “We’ve achieved year two results in year one,” says Schneider.
This has been achieved by stripping out costs - but not personnel - and favourable exchange rates against the euro.
Less bureaucracy and greater freedom have allowed Schneider to anglicise the business. Its entire fleet of trucks has been converted to right-hand drive - previously they were all continental left-hand drive vehicles.
It also launched a revised catalogue in March with 280 products, up from 250. The new catalogue, with more impactful photography and nutritional information, has made an impact, says Schneider, as has a more motivated sales team.
But the former Nestlé-owned business is not resting on its laurels. It plans to open three new depots in Bristol, Plymouth and north Birmingham over the next six to 12 months to expand Eismann’s reach westwards and northwards.
It currently has 10 depots servicing 100 ‘shops on wheels’ and Schneider says he is still seeking new franchisees, in the south of England, and a master franchisee based in Dublin.
Cook’s delicatessen-style frozen food shops are going from strength to strength.
It has just opened its 10th shop in Pettswood, near Bromley, using the company’s new shop format. And it has already outperformed expectations by 25%. “We’re pretty damn confident about the new store model,” says retail director and founder Edward Perry.
The success of the new format has now
given Cook the confidence to open its first store in London. “London has always been a huge opportunity but we were not prepared to enter it until we were ready,” says Perry. But he admits he will be holding his breath when the shop opens in Barnes this month.
Cook has extended its kitchens in Sittingbourne, Kent, to cater for up to 16 shops. But a search for premises to accommodate larger kitchens to serve a least 50 shops is already under way.
“Growth will be dictated by our kitchens,” insists Perry. “Selling our food is reasonably easy - making it is difficult.”
The business is now attracting outside interest. “We receive three or four franchise requests a week plus approaches from venture capitalists,” says Perry. But he is not interested in franchising - not yet - and doesn’t want to hand over control to a VC. However, Perry admits he’d be interested in a Sugar Daddy wanting to silently invest a few million pounds.
Located in private residential communities, the success of Hudson’s convenience store format had been based on exemplary customer service.
MD Nick Cooper has been working his team hard over the last couple of months to take the company to new heights.
He admits his store in Wandsworth - the other is based on the other side of London in Bow - lost sight of the importance of customer service by focusing too hard on the operational side of the business.
So, in April a major customer service initiative was started which saw sales rise 20% in the first six weeks.
“We’ve trained our staff to talk to our customers and not just greet them. As a result we’re now establishing meaningful relationships,” says Cooper. “The only way to find out customers’ needs is to ask them.”
Empowering and training its staff to approach and engage with shoppers has improved the staff-customer relationship and driven up the time people spend in the stores. “Customers now feel it’s OK to spend time in the shop because they feel more comfortable,” says Cooper.
A reconfigured store layout and instore music in Wandsworth have also led to shoppers walking around more slowly with a resultant rise in basket size. “Any c-store that seeks to compete has to focus on customer service. It’s an area the multiples will find hard to do,” adds Cooper.
Cooltrader has upped the ante in its quest for growth, forging a deal to fund expansion with private equity house Gresham.
“Over the next two years we need help to fund expansion,” says Cooltrader’s chief executive Andy Pritchard. “But in 18 months’ to two years’ time, we should be large enough to fund our own growth.”
The frozen food discounter, set up by Pritchard, former Iceland chairman and
group chief executive Malcolm Walker and ex-director Andy Errington, now has 12 stores after recent openings in Ellesmere Port and Erdington, Birmingham - its southernmost store.
Pritchard’s plan is to open 10 new stores annually for at least the next five years, with plans for another eight stores this year, taking the total to 20 by the end of 2004.
This will almost ensure that Cooltrader appears in The Grocer Top 50 independents in 2005 but will require funding of around £2m a year, says Pritchard.
And this is where Gresham comes in. According to Pritchard, the banks were not entirely keen on financing Cooltrader’s growth as it was still viewed very much as a start-up business.
But Cooltrader is clearly a good investment. With its temperature-controlled distribution centre in Oswestry able to service up to 80 stores, it looks set to reach the upper echelons of The Grocer Top 50 in years to come.
Jeroboams marketing director Crispin Russell is already planning for Christmas thanks to the copy deadlines of lifestyle magazines such as Tatler and Harpers, which are read by some of Jeroboams’ upmarket clientèle.
“PR is important,” says Russell. “We’re always looking for any means to raise our profile. Third party comment is invaluable.”
To get desirable comments in the November issues, Jeroboams has to have its Christmas plans in order by August. That means the fine wines and speciality foods retailer has to prepare its Christmas gifts selections and hampers.
And what does everyone want in their stockings? “Port and Stilton, and claret and Cheddar,” says Russell.
The summer trend for more entertaining, picnics and drinks in the garden with friends has pushed up sales, assisted by a Wines for Summer Drinking promotion.
Jeroboams also continues to add new products to its shelves as Russell says his shops need to offer a more individual choice in order to stay one step ahead of the supermarkets.
This has included the successful introduction of Inverawe smoked duck, chicken, loch trout and organic salmon and spinosi pasta from Italy.
“Supermarkets are doing wonderful things now in speciality foods. But it’s not their main focus. It’s ours.”
Selling food is easy, making it is harder
Private equity funds enable expansion
Independent spirit soars above targets
Focus on customer service lifts sales
Genuine specialities provide USPs
The first time we reported on The Grocer’s five Ones To Watch (The Grocer, February 21, 2004), we said if you’re not big in the competitive world of grocery, then you have to be clever.
Well, if that’s the case, our Ones to Watch should all be applying for membership of Mensa. All of them have had a successful first half of 2004.
Two, Cook and Cooltrader, have opened new stores and the others have all undertaken new initiatives to increase their amount of business.
Hudson’s has revamped its customer service and been immediately rewarded with a hefty uplift in sales. Jeroboams has made the most of a bright start to the summer and Eismann has introduced a new catalogue which has boosted sales.
And, rightly, every one of the companies is attracting attention for their achievements. Hudson’s has just been voted the best independent retailer of the year 2004 in the Booker Prize for Excellence Awards for the second year in a row.
Cook is receiving franchise requests and interest from venture capitalists on a weekly basis, while Cooltrader has gone one stage further and actually completed a deal with a private equity house.
Jeroboams is set to be besieged by lifestyle and foodie magazines keen to learn about its Christmas offerings and Eismann is proving an attractive proposition for entrepreneurs who are hoping to set up their own franchised business.
Ones to Watch? Clearly these businesses are already being favourably scrutinised by the industry and you can be sure we’ll be hearing a lot more about their progress over the coming months.
Frozen food specialist Eismann has had a positive first year of independence.
The direct sales operation has exceeded by 50% its profit target, set when Eismann gained independent status in an MBO led by managing director Karl Schneider in July 2003. “We’ve achieved year two results in year one,” says Schneider.
This has been achieved by stripping out costs - but not personnel - and favourable exchange rates against the euro.
Less bureaucracy and greater freedom have allowed Schneider to anglicise the business. Its entire fleet of trucks has been converted to right-hand drive - previously they were all continental left-hand drive vehicles.
It also launched a revised catalogue in March with 280 products, up from 250. The new catalogue, with more impactful photography and nutritional information, has made an impact, says Schneider, as has a more motivated sales team.
But the former Nestlé-owned business is not resting on its laurels. It plans to open three new depots in Bristol, Plymouth and north Birmingham over the next six to 12 months to expand Eismann’s reach westwards and northwards.
It currently has 10 depots servicing 100 ‘shops on wheels’ and Schneider says he is still seeking new franchisees, in the south of England, and a master franchisee based in Dublin.
Cook’s delicatessen-style frozen food shops are going from strength to strength.
It has just opened its 10th shop in Pettswood, near Bromley, using the company’s new shop format. And it has already outperformed expectations by 25%. “We’re pretty damn confident about the new store model,” says retail director and founder Edward Perry.
The success of the new format has now
given Cook the confidence to open its first store in London. “London has always been a huge opportunity but we were not prepared to enter it until we were ready,” says Perry. But he admits he will be holding his breath when the shop opens in Barnes this month.
Cook has extended its kitchens in Sittingbourne, Kent, to cater for up to 16 shops. But a search for premises to accommodate larger kitchens to serve a least 50 shops is already under way.
“Growth will be dictated by our kitchens,” insists Perry. “Selling our food is reasonably easy - making it is difficult.”
The business is now attracting outside interest. “We receive three or four franchise requests a week plus approaches from venture capitalists,” says Perry. But he is not interested in franchising - not yet - and doesn’t want to hand over control to a VC. However, Perry admits he’d be interested in a Sugar Daddy wanting to silently invest a few million pounds.
Located in private residential communities, the success of Hudson’s convenience store format had been based on exemplary customer service.
MD Nick Cooper has been working his team hard over the last couple of months to take the company to new heights.
He admits his store in Wandsworth - the other is based on the other side of London in Bow - lost sight of the importance of customer service by focusing too hard on the operational side of the business.
So, in April a major customer service initiative was started which saw sales rise 20% in the first six weeks.
“We’ve trained our staff to talk to our customers and not just greet them. As a result we’re now establishing meaningful relationships,” says Cooper. “The only way to find out customers’ needs is to ask them.”
Empowering and training its staff to approach and engage with shoppers has improved the staff-customer relationship and driven up the time people spend in the stores. “Customers now feel it’s OK to spend time in the shop because they feel more comfortable,” says Cooper.
A reconfigured store layout and instore music in Wandsworth have also led to shoppers walking around more slowly with a resultant rise in basket size. “Any c-store that seeks to compete has to focus on customer service. It’s an area the multiples will find hard to do,” adds Cooper.
Cooltrader has upped the ante in its quest for growth, forging a deal to fund expansion with private equity house Gresham.
“Over the next two years we need help to fund expansion,” says Cooltrader’s chief executive Andy Pritchard. “But in 18 months’ to two years’ time, we should be large enough to fund our own growth.”
The frozen food discounter, set up by Pritchard, former Iceland chairman and
group chief executive Malcolm Walker and ex-director Andy Errington, now has 12 stores after recent openings in Ellesmere Port and Erdington, Birmingham - its southernmost store.
Pritchard’s plan is to open 10 new stores annually for at least the next five years, with plans for another eight stores this year, taking the total to 20 by the end of 2004.
This will almost ensure that Cooltrader appears in The Grocer Top 50 independents in 2005 but will require funding of around £2m a year, says Pritchard.
And this is where Gresham comes in. According to Pritchard, the banks were not entirely keen on financing Cooltrader’s growth as it was still viewed very much as a start-up business.
But Cooltrader is clearly a good investment. With its temperature-controlled distribution centre in Oswestry able to service up to 80 stores, it looks set to reach the upper echelons of The Grocer Top 50 in years to come.
Jeroboams marketing director Crispin Russell is already planning for Christmas thanks to the copy deadlines of lifestyle magazines such as Tatler and Harpers, which are read by some of Jeroboams’ upmarket clientèle.
“PR is important,” says Russell. “We’re always looking for any means to raise our profile. Third party comment is invaluable.”
To get desirable comments in the November issues, Jeroboams has to have its Christmas plans in order by August. That means the fine wines and speciality foods retailer has to prepare its Christmas gifts selections and hampers.
And what does everyone want in their stockings? “Port and Stilton, and claret and Cheddar,” says Russell.
The summer trend for more entertaining, picnics and drinks in the garden with friends has pushed up sales, assisted by a Wines for Summer Drinking promotion.
Jeroboams also continues to add new products to its shelves as Russell says his shops need to offer a more individual choice in order to stay one step ahead of the supermarkets.
This has included the successful introduction of Inverawe smoked duck, chicken, loch trout and organic salmon and spinosi pasta from Italy.
“Supermarkets are doing wonderful things now in speciality foods. But it’s not their main focus. It’s ours.”
Selling food is easy, making it is harder
Private equity funds enable expansion
Independent spirit soars above targets
Focus on customer service lifts sales
Genuine specialities provide USPs
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