You won't hear David Sands muttering about the tough trading environment for the independents.

And why would he? The David Sands chain of 24 c-stores in Fife, Perthshire and Kinross-shire - which has just been named Responsible Drinks Retailer of the Year (see news, page 11) - is thriving despite being located in one of the densest concentrations of supermarkets in the UK. Last year the company reported profit of £960,000 on sales up 25% to £25m - not bad going given that in Perth alone its four convenience stores are up against three Tescos, a Morrisons, an Asda, an Aldi, a Lidl and an M&S.

The secret, says Sands - MD, part-owner and fourth generation of the family to run the business - is not to get obsessed with the competition and concentrate instead on the retail detail that makes a chain successful.

"The multiples are good competition but too many independents are fixated by them," he says. "They should concentrate on developing their own businesses."

Sands, who cut his teeth at Sainsbury's, says one of the major challenges for any independent is to offer a genuine point of difference. And what he reckons his chain can offer is a genuinely local service.

Nearly all the stores are open from 6am to 10pm seven days a week, except Christmas day when they close. They offer a range of services - newspapers, lottery, Post Office, freshly baked bread, cash machines, DVD hire, phone cards, parking meter cards and dry-cleaning. A wine club was launched recently with free membership and no minimum purchase requirement.

David Sands also has a keen eye on pricing, with 300 promotions running at any time. Unlike other businesses of its size, he is not afraid to find out what his customers really want. "Opening up your business to scrutiny from customers is the most effective way of learning where improvements can be made," says Sands.

In the past two years the chain has invested heavily in focus groups, using Harris International Marketing, to get a steer on its customers' needs. The results have encouraged the retailer to increase its focus on fresh and chilled food and produce, which already accounts for a third of total sales and is growing rapidly. Large refrigerated displays near the door are now par for the course.

Another immediate outcome of the consumer research was "a very clear message" that local sourcing generates local loyalty. Last month the chain's buyers, more used to purchasing in bulk from Nisa-Today's, sat down with 50 local suppliers. Almost immediately, the stores started stocking beer, bakery, eggs, juices and other products from nearby suppliers.

Sands takes the view that if the chain can help the more isolated local suppliers to get their products to its stores, it's good news for them, for the chain and for consumers.

In August David Sands opened a chilled distribution facility at its warehouse and HQ in Bridgend, Kinross-shire, that provides a hub for regional suppliers such as West Fife-based Puddledub Pork and Fifeshire Bacon Co.

It allows suppliers to drop off goods for distribution by the chain's three-truck fleet to 24 stores and so far take-up has been good, reports fresh foods controller Laura O'Brien.

There's more mileage to be had in local sourcing, believes Sands. He's also keen to expand the business in terms of store numbers. It has been opening two or three new outlets annually at a cost of £500,000 each.

In late summer the chain bought a run-down CTN in Perth about 50 yards from a Morrisons but right outside the city's hospital and it is now awaiting planning permission to expand it.

"We've never had a land bank, never will," says Sands in a joking reference to the Competition Commission inquiry. Instead the management buys sites, all of which are wholly owned and average about 2,000 sq ft, only when the price is right. "If the multiples push prices too high, we walk away. We can afford to wait," he says.

Wait and watch. If there's one thing that keeps the chain competitive, says Sands, it is its ability to learn from the competition - however big. "I used to worry about everything," he says. "Now I come in and ask myself: 'How am I going to improve the business today?' It's easy to get distracted from the main goal. That's the big lesson to learn from Tesco." n

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