BWG Group, which operates the Mace and Spar franchises in the Irish Republic, has always been recognised as a market leader. And the launch last December of a pioneering new Spar format - complete with juice bar, coffee concession and foodservice counter - epitomised its willingness to tear up the convenience rule book and start again.
By coincidence, The Grocer was visiting three of Spar Ireland's four pilot stores, in Dublin, just as news broke that BWG's backers were looking for an exit.
Group chief executive Leo Crawford, who is also chairman of Spar Ireland and president of Spar International, was not saying anything - hardly surprising given that the last time BWG was put up for sale, by Pernod Ricard, it took two years to go through. But whether it takes two years or two months, no buyer could fail to be impressed by what's on offer.
The pilots are variations on a theme that Spar Ireland has dubbed 'new convenience' and are the culmination of more than 12 months of research and product development that underpin The Spar Food Strategy, developed in conjunction with Spar International and convenience retailing consultants SRCG. The strategy, which forms a central plank of Spar's E90m expansion programme this year, represents not just a radical rethink in store design, but also of products and packaging - and indeed the whole concept of convenience.
Last month, the fourth pilot opened, opposite Gary Rhodes' new restaurant, RhodesD7 on Capel Street, and just 300 yards from one of the first pilot stores in Abbey Street. The first thing customers will notice is how spacious the 3,200 sq ft store feels and how high-spec the decor looks with its stylish ceramic floor tiles, matt black ceiling and state-of-the-art fixtures and fittings. The second is how foodservice oriented it is, arguably pitching Spar Ireland against local cafés and bars competition-wise, rather than rival c-stores.
The layout reflects five mission categories identified in the research: 'enjoy now', 'take home', 'let's celebrate', 'stock up' and 'your usual'. Every product has been taken out of its original category and reclassified. Spar's logic is simple: fresh food and foodservice lines generate circa 40% margins - much higher than anything in mainstream grocery.
The store boasts the largest of the pilot Treehouse juice & smoothie bars, developed in partnership with juice ingredients supplier Sunshine Juices. There's also a 24-seat, 600 sq ft in-store cafe, operated in partnership with one of Ireland's leading coffee chains, Insomnia. (At the Abbey Street and Castlebar stores, Spar is trialling a different coffee concession, in partnership with leading Canadian coffee and donut brand Tim Hortons.) And there's a substantial New York-style deli counter catering primarily to the breakfast and lunchtime markets with freshly-made sandwiches, salads and hot meals.
Traditional ambient grocery is conspicuous by its absence. Franchisee Michael Dawson estimates that the store stocks 2,000 such lines, compared with the usual 4,000, and a significant part of one fixture is devoted to Polish food to cater to the local demographic. Despite its proximity to the Abbey Street store, sales have not been cannibalised, insists Dawson. Footfall is running at about 1,500 a day and he expects that to increase to 2,500. Turnover is 20% ahead of expectations, he says.
The customers clearly like it. It's a definite plus that they can pay for their coffees and smoothies at dedicated till points rather than having to queue up again at the main cashier desk. The only reservations that franchisees have about the new format is the touch-screen terminal. In theory, it allows shoppers to order customised sandwiches before picking them up at the food counter, but one of the terminals at the Abbey Street store isn't working on our visit and franchisee John O'Neill admits that usage has been low. The main problem, he says, is that people want to make changes to their order when they pick up their sandwich.
Crawford accepts that some elements may not work and that anything this ambitious involves teething problems. "It's not as easy as it sounds. It does create challenges for retailers in terms of service levels. But the economy here is booming and growth is going to continue. "
Sales are up 70% year-on-year at the Abbey Street store, a refit of an existing store.
Despite being aimed mainly at a wealthy urbanite market, the model is robust enough to thrive in an economic downturn, he believes. "People still have to work," he says. "We have an offer that is not totally focused on price. The other thing is that we'll continue to open new stores."
It currently boasts 434. By the end of next year, BWG expects to have opened 70 new stores and taken the number featuring all or some of the new elements to more than 200. There is potential to develop the concept with independent retailers as well as franchisees, says Crawford. He is also keen to develop the 'let's celebrate' concept with stronger cross-promotional offers that are more attractively packaged.
Meanwhile, plans are under way to overhaul Spar's supermarket-sized format, Eurospar. A pilot store is expected to open on Barrow Street in November.
Crawford is excited by the catering idea being piloted at the Merrion Row store and thinks it would work particularly well in a Eurospar context. "If you take Eurospar's pull in rural areas, you've got first communions and birthday parties. It's a real opportunity, though ideally we'd want to do hot food as well."
The team is also planning to introduce a new evening meal solutions proposition at Eurospar, which takes a leaf from the Dream Dinners concept that is taking the US by storm, though the concept has yet to be finalised.
Fortunately, speculation over BWG's future hasn't distracted Crawford from his mission. Last year, Spar sales topped E1bn for the first time, and he is intent on maintaining that momentum. "As long as we continue to see double-digit growth, I will be very happy, given that the grocery market is growing at 4% to 5%," he says. "We've got a very good offer that's innovation and design-led. Our business model allows us flexibility with retailers and we've got a strong management team.
Crawford describes Spar's reinvention as "evolution, not revolution". His rivals may beg to differ.
By coincidence, The Grocer was visiting three of Spar Ireland's four pilot stores, in Dublin, just as news broke that BWG's backers were looking for an exit.
Group chief executive Leo Crawford, who is also chairman of Spar Ireland and president of Spar International, was not saying anything - hardly surprising given that the last time BWG was put up for sale, by Pernod Ricard, it took two years to go through. But whether it takes two years or two months, no buyer could fail to be impressed by what's on offer.
The pilots are variations on a theme that Spar Ireland has dubbed 'new convenience' and are the culmination of more than 12 months of research and product development that underpin The Spar Food Strategy, developed in conjunction with Spar International and convenience retailing consultants SRCG. The strategy, which forms a central plank of Spar's E90m expansion programme this year, represents not just a radical rethink in store design, but also of products and packaging - and indeed the whole concept of convenience.
Last month, the fourth pilot opened, opposite Gary Rhodes' new restaurant, RhodesD7 on Capel Street, and just 300 yards from one of the first pilot stores in Abbey Street. The first thing customers will notice is how spacious the 3,200 sq ft store feels and how high-spec the decor looks with its stylish ceramic floor tiles, matt black ceiling and state-of-the-art fixtures and fittings. The second is how foodservice oriented it is, arguably pitching Spar Ireland against local cafés and bars competition-wise, rather than rival c-stores.
The layout reflects five mission categories identified in the research: 'enjoy now', 'take home', 'let's celebrate', 'stock up' and 'your usual'. Every product has been taken out of its original category and reclassified. Spar's logic is simple: fresh food and foodservice lines generate circa 40% margins - much higher than anything in mainstream grocery.
The store boasts the largest of the pilot Treehouse juice & smoothie bars, developed in partnership with juice ingredients supplier Sunshine Juices. There's also a 24-seat, 600 sq ft in-store cafe, operated in partnership with one of Ireland's leading coffee chains, Insomnia. (At the Abbey Street and Castlebar stores, Spar is trialling a different coffee concession, in partnership with leading Canadian coffee and donut brand Tim Hortons.) And there's a substantial New York-style deli counter catering primarily to the breakfast and lunchtime markets with freshly-made sandwiches, salads and hot meals.
Traditional ambient grocery is conspicuous by its absence. Franchisee Michael Dawson estimates that the store stocks 2,000 such lines, compared with the usual 4,000, and a significant part of one fixture is devoted to Polish food to cater to the local demographic. Despite its proximity to the Abbey Street store, sales have not been cannibalised, insists Dawson. Footfall is running at about 1,500 a day and he expects that to increase to 2,500. Turnover is 20% ahead of expectations, he says.
The customers clearly like it. It's a definite plus that they can pay for their coffees and smoothies at dedicated till points rather than having to queue up again at the main cashier desk. The only reservations that franchisees have about the new format is the touch-screen terminal. In theory, it allows shoppers to order customised sandwiches before picking them up at the food counter, but one of the terminals at the Abbey Street store isn't working on our visit and franchisee John O'Neill admits that usage has been low. The main problem, he says, is that people want to make changes to their order when they pick up their sandwich.
Crawford accepts that some elements may not work and that anything this ambitious involves teething problems. "It's not as easy as it sounds. It does create challenges for retailers in terms of service levels. But the economy here is booming and growth is going to continue. "
Sales are up 70% year-on-year at the Abbey Street store, a refit of an existing store.
Despite being aimed mainly at a wealthy urbanite market, the model is robust enough to thrive in an economic downturn, he believes. "People still have to work," he says. "We have an offer that is not totally focused on price. The other thing is that we'll continue to open new stores."
It currently boasts 434. By the end of next year, BWG expects to have opened 70 new stores and taken the number featuring all or some of the new elements to more than 200. There is potential to develop the concept with independent retailers as well as franchisees, says Crawford. He is also keen to develop the 'let's celebrate' concept with stronger cross-promotional offers that are more attractively packaged.
Meanwhile, plans are under way to overhaul Spar's supermarket-sized format, Eurospar. A pilot store is expected to open on Barrow Street in November.
Crawford is excited by the catering idea being piloted at the Merrion Row store and thinks it would work particularly well in a Eurospar context. "If you take Eurospar's pull in rural areas, you've got first communions and birthday parties. It's a real opportunity, though ideally we'd want to do hot food as well."
The team is also planning to introduce a new evening meal solutions proposition at Eurospar, which takes a leaf from the Dream Dinners concept that is taking the US by storm, though the concept has yet to be finalised.
Fortunately, speculation over BWG's future hasn't distracted Crawford from his mission. Last year, Spar sales topped E1bn for the first time, and he is intent on maintaining that momentum. "As long as we continue to see double-digit growth, I will be very happy, given that the grocery market is growing at 4% to 5%," he says. "We've got a very good offer that's innovation and design-led. Our business model allows us flexibility with retailers and we've got a strong management team.
Crawford describes Spar's reinvention as "evolution, not revolution". His rivals may beg to differ.
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