The discounter is staying true to shopkeeping’s core values as it modernises. Sean McAllister reports

Clockwise from above right: Fresh fruit and veg lifts the store’s ambience; deli meats prove popular; flowers and plants flank the fresh fruit

The Kwik Save’s heritage goes back to 1965 when its first store opened, in Rhyl, North Wales. But it is the performance of the regenerated stores that is instilling a new optimism about the future. The 39 stores revamped as part of its ongoing refurbishment programme have had an average sales uplift of 23% while on the opening day of its 40th refurbished store in Canning Town, East London, it pulled in the same takings in three hours normally achieved in a 12-hour day.


Some managers would be fearful for the future of a business that has underperformed for years and just posted a drop in sales. But Kwik Save’s top team is confident it can turn round the fortunes of the discount chain.

The like-for-like sales dip was 4.7% in the seven weeks to August 16, according to the company’s last trading statement. But says MD Robin Whitbread: “Despite the lacklustre performance the brand stood out very strongly and one of the things we feel really excited about is the strength of the Kwik Save brand - customers are very loyal to Kwik Save.”

Whitbread believes the challenge facing Kwik Save is to update the brand to meet the expectations of today’s shoppers. “It has a fantastic heritage,” he says, “so we have to be absolutely true to the core constituent of the brand but present it in a modern and relevant way.”

The 8,000 sq ft store in Canning Town points the way forward for Kwik Save, says Whitbread. It is certainly brighter, fresher and more colourful than the traditional ‘no frills’ Kwik Save store, with new flooring, shelving and refrigeration units, better lighting and a revamped layout to improve ease of shopping. It now also boasts a delicatessen, a hot food counter featuring a rotisserie, a frequently changing non-food range from German retailer Tchibo and a new fresh and chilled offering.

According to marketing director Gill McComas, the store is now a “proper supermarket” - light, bright, modern and clean while the new fresh offering has an “enormously big halo factor” across the rest of the store. It has also worked on its meat offer, says McComas, explaining: “Selling good quality meat at great prices is a real pull into the store.”

Whitbread believes that the new-look store has also altered perceptions. “Customers think we have extended the store,” he says. “In fact it is the same size.” New shelving, allowing for better product presentation, has created the impression that the store stocks a greater range of products.

Another 25 stores will be converted before Christmas with the possibility of accelerating the regeneration programme in 2004.

The converted stores are key to attracting new customers and encouraging existing customers to increase their basket size but they are only one part of the strategy, says McComas. Pricing, promotions, range and availability are all important components of the new Kwik Save mix. A combination of low prices and promotions is one of Kwik Save’s core brand values and why it launched its £20m Price...Less campaign at the end of May to permanently reduce prices across a number of categories under a ‘low prices for life’ strapline.

“The store’s heritage is in low prices and the campaign reinforces the price message,” says McComas. She adds that early signs from Price…Less, which she compares to Asda’s Rollback campaign, are very encouraging and show customers are beginning to understand the concept.

To reinforce its price message, Kwik Save has also improved its promotional activities. Thanks to new IT systems, it can offer multi-buy and bogof promotions - something it was unable to do six months ago.

It is also improving its product range through the introduction of a category planning process which replaces old underperforming lines with new ranges. This has been bolstered by the relaunch of Kwik Save’s own label and a cheapest-on-display sub-brand called Simply earlier this year - two of Kwik Save biggest success stories in 2003. Kwik Save’s revamped own label boasts 500 lines and within seven months was bought by 60% of Kwik Save shoppers with a 90% repeat purchase. The 200 Simply lines achieved similar success. “Own label does a lot for a store’s brand while Simply has played a key role in delivering value for money,” says McComas. So the introduction of another 1,000 own label lines over the year should help Kwik Save’s recovery.

Observers will be keenly watching the progress of the regenerated stores, the new own label lines and the success of its new promotional and Price…Less campaigns.

As for Whitbread, he sees the future of Kwik Save in terms of a return to retailing basics. “We are dealing with the fundamentals of being a good shopkeeper - clean stores, good checkout service and excellent availability. This is a long journey, but we have the direction very clear.”