>>Independents need to raise standards not white flags, says Ed Ferguson, managing director of CJ Lang & Son
It is time for independent retailers to raise their standards instead of hanging out the white flags in the wake of the growth of the major multiples in the convenience sector.
Events in the good old corner shop sector are now prominently featured in the media. Some in the sector are becoming battle-weary, while others are even speaking of defeat in the face of growing competition from the multiples.
Let there be no doubt - the multiples will take independents’ customers if we don’t fight to keep them.
Doing things that were successful 10, five or even two years ago may not continue to deliver that success.
It is not inevitable that the multiples will take over our market. They still have much to learn about our marketplace, so we must not make it easy for them.
But one thing is certain. Our customers are intelligent and discerning. Their loyalty is hard won and easily lost and we can be sure they aren’t going to use their local shops just because they feel sorry for us.
The answer for many traditional convenience stores lies in investment - investment in the shopping environment, in people, in technology and investing time and effort in simple systems.
CJ Lang has invested £500,000 in the last year in store refurbishment and a similar sum has been earmarked for 2004/2005.
One store to have benefited from such investment is the Spar in Gatehouse of Fleet. Faced with a possible threat of Tesco Express due to open soon in the area, we spent £70,000 to double the sales area to 1,600 square feet, added 14 metres of chilled equipment and brought the store up to Spar Millennium standard.
In almost every category we saw massive growth, even across those traditional categories that are meant to be in decline like grocery. Overall profit grew by 107%.
Retailers have to invest in their people also and we approached staff retention by completing exit interviews with all leavers.
Surprisingly, they did not complain about poor pay, long hours or not enough holidays. What they did mind were the uniforms, lack of facilities, not being made to feel part of the team and a lack of training. So we developed a staff forum to choose the new uniforms, there is an upgrade of staff facilities with staff consulted whenever a store is refurbished, and we
rolled out Lifelong Learning to all stores. We also introduced an in-house trainee manager programme. The first three managers have now graduated and are due to take over stores. The result - absenteeism across our own-store estate is down 23% and staff turnover is down 22%.
We have also rolled out touchscreen technology across our estate. Scanning is a must-have - we do not accept any independent stores into Spar who do not have it.
Retailers and store managers need to know what sells and what does not and to be able to share that information with their Spar peers.
All company stores in Spar Scotland are also on an automatic ordering system.
However, stores need to be made easier to
run. Retailers and store managers should not be in back offices surrounded by paper and computer printouts.
Let personnel at the regional distribution centres and Spar central office do the number crunching.
Retailers should be out on the shop floor talking to customers, leading staff and knowing what the competition is up to.
Stores must concentrate on looking at the business through the eyes of your customers and delivering what matters most to them such as freshness and availability day in and day out.
When you next read of independents’ demise or hear people saying it is the beginning of the end, ignore them.
It’s not time for independent retailers to give in - it’s time to dig in!
It is time for independent retailers to raise their standards instead of hanging out the white flags in the wake of the growth of the major multiples in the convenience sector.
Events in the good old corner shop sector are now prominently featured in the media. Some in the sector are becoming battle-weary, while others are even speaking of defeat in the face of growing competition from the multiples.
Let there be no doubt - the multiples will take independents’ customers if we don’t fight to keep them.
Doing things that were successful 10, five or even two years ago may not continue to deliver that success.
It is not inevitable that the multiples will take over our market. They still have much to learn about our marketplace, so we must not make it easy for them.
But one thing is certain. Our customers are intelligent and discerning. Their loyalty is hard won and easily lost and we can be sure they aren’t going to use their local shops just because they feel sorry for us.
The answer for many traditional convenience stores lies in investment - investment in the shopping environment, in people, in technology and investing time and effort in simple systems.
CJ Lang has invested £500,000 in the last year in store refurbishment and a similar sum has been earmarked for 2004/2005.
One store to have benefited from such investment is the Spar in Gatehouse of Fleet. Faced with a possible threat of Tesco Express due to open soon in the area, we spent £70,000 to double the sales area to 1,600 square feet, added 14 metres of chilled equipment and brought the store up to Spar Millennium standard.
In almost every category we saw massive growth, even across those traditional categories that are meant to be in decline like grocery. Overall profit grew by 107%.
Retailers have to invest in their people also and we approached staff retention by completing exit interviews with all leavers.
Surprisingly, they did not complain about poor pay, long hours or not enough holidays. What they did mind were the uniforms, lack of facilities, not being made to feel part of the team and a lack of training. So we developed a staff forum to choose the new uniforms, there is an upgrade of staff facilities with staff consulted whenever a store is refurbished, and we
rolled out Lifelong Learning to all stores. We also introduced an in-house trainee manager programme. The first three managers have now graduated and are due to take over stores. The result - absenteeism across our own-store estate is down 23% and staff turnover is down 22%.
We have also rolled out touchscreen technology across our estate. Scanning is a must-have - we do not accept any independent stores into Spar who do not have it.
Retailers and store managers need to know what sells and what does not and to be able to share that information with their Spar peers.
All company stores in Spar Scotland are also on an automatic ordering system.
However, stores need to be made easier to
run. Retailers and store managers should not be in back offices surrounded by paper and computer printouts.
Let personnel at the regional distribution centres and Spar central office do the number crunching.
Retailers should be out on the shop floor talking to customers, leading staff and knowing what the competition is up to.
Stores must concentrate on looking at the business through the eyes of your customers and delivering what matters most to them such as freshness and availability day in and day out.
When you next read of independents’ demise or hear people saying it is the beginning of the end, ignore them.
It’s not time for independent retailers to give in - it’s time to dig in!
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