Spar’s managing director Debbie Robinson talks about ethics, pricing, seasonality, store concepts - and taking suppliers to task
You’ve been in the hot seat for almost a year. What impresses you about the operation and what needs fixing?
The most inspiring part is spending time with the retailers. I have the job I have because of them. At the moment we have great entrepreneurial flair but we could benefit enormously from a much more joined-up approach and rational decision-making based on fact and evidence.
After 20 successful years at The Co-op Group how’s it different?
The opportunities are different. With Spar there is a real desire to succeed because livelihoods depend on it, so the hunger for success is actually much greater.
You helped develop award-winning formats at The Co-op. How has this experience helped you drive the Spar business model?
We’re currently working on a new format, which will harness the best of the best from the existing Spar proposition but with a more scientific approach to macro-space allocation. We’re classifying categories as ‘hero, drive, hold and squeeze’ so we’ll be looking to give extra display space to hero categories to allow them to grow.
It’s often observed that men dominate the industry, and particularly the convenience sector. How does being a woman help?
Women tend to control the household income, so understanding the motives and intent through purchase decision making is really valuable. I’ve always personally tried to pick the best person for the job but do think that we need to have robust support networks that make people feel comfortable at work.
Is there scope to bring health, nutrition, ethical sourcing and other issue-led agendas to the Spar customer?
Absolutely. Most of our shoppers shop in Tesco too and I think the route to success is meeting them on the basic standards and then differentiating through Spar’s charitable and sporting links and the fact, structurally and entrepreneurially, we’re so different.
Milk pricing has been in the headlines recently. How does Spar source its milk and how much do you pay for it?
It’s sourced by the five wholesalers independently so I don’t know. All products should be sold at a fair price that allows cost and a realistic plus to be paid to primary producers, processors, distributors, wholesalers and retailers. We also need to ensure the price offers value for money to the consumer, so all margins are under pressure and all costs are scrutinised. That’s good business.
Spar is sponsoring British Food Fortnight, which began on Friday. Why did you sponsor it and what activities do you have planned?
It’s an absolute gift for us because the vast majority of our fresh foods are British. We probably go further than any other retailer in terms of dairy products, meat and bakery and this is a fantastic opportunity to share with our consumers the activities we’ve had in place for a long, long time.
Can British products be crowd pullers for retailers and command the right price for retailer and producer?
Absolutely. I think the patriotism is long overdue and is a real motive for consumers, provided it continues to offer value for money and is the right quality.
Does that mean you don’t intend to take Spar more upmarket?
I don’t think it’s about being upmarket, it’s about being the best you possibly can be and offering the best you can for your customers in that retail environment.
Some of the symbols are upping their fruit & veg. What are your plans?
I’ve introduced consumer surveys, and the desire for a better range of fresh fruit and vegetables was one of the top three issues. So next month we’re launching Fresh for Less, where we’ll be offering great value fresh produce at £1 on a comprehensive range of products.
The discounters are growing fast. What are you doing to address their growth?
The current economic climate has legitimised purchases in the discounters and what they’re doing has to be admired. I think the simplicity of their offer and round pound pricing is a key element of that. In Spar we’re increasing the number of products we feature at a pound. We’ve benchmarked the grocery multiple convenience stores and we’ll look to have more round-pound products than anyone else in the market. Pound value, fresh for less, baby prices and the meal deals offer consumers clarity and consistency, and it creates the space for some excitement, particularly around seasonality and specific events.
The symbol sector tends to underperform during events. How will you reverse that?
One important thing is to highlight products we’ve already got in store. It’s not about importing high-risk goods from overseas that will expire the day after the event. We’re working with Nielsen to highlight products that take off at particular times of the year. We look at the market and our own data and see where we peak, where the market peaked and we look to fill the gaps. If we’d have looked at our own data we wouldn’t have realised what a big spike there is in fish sales on Good Friday, for example.
Morrisons is looking at buying Costcutter. What do you think about the prospect of one of the big four offering a franchise to independents?
I think the mults would struggle with the complexity of fulfilment to a diverse range of independent stores, and also being able to fulfil the retailers’ passion, flair, and entrepreneurial spirit. But it’s a prospect we all have to consider. We have to continually raise our game and have compelling consumer propositions that compete with the multiples.
And are the multiples still the biggest threat to Spar?
I think the biggest threat to the industry, including Spar, is online and the radical changes it could bring. The other threat is the merging of foodservice with convenience. We have to embrace that by being able to deliver direct to your home.
Rival symbols have put a lot of work into pricing. Peter Blakemore is leading a group to reduce the cost of goods to retailers. How will this work?
There have been occasions when it’s been in the interest of suppliers to give the wholesalers something different that didn’t qualify for the best terms, so we’ve got a project which is looking at range rationalisation. We’re also tracking Tesco retail prices. There have been occasions when it has been cheaper for us to buy from Tesco than the terms we’re getting. Those suppliers are responsible for managing those brands but we’re taking them to task. We simply won’t be buying from them if we can get their products cheaper from Tesco.
How much duplication is there at the moment?
There are probably 15,000 lines in total across the business and the average store is stocking around 3,000 products. So the potential for rationalisation is significant. But equally it’s important that we complement that with a substantial, locally sourced range.
The average basket spend at Spar is £4.16, compared with £4.53 for the symbol sector as a whole and £5.65 at Sainsbury’s Local. How can you up your game?
Pricing’s part of the issue but the other activities I’ve mentioned are all about growing the basket spend. We’ve got a target over the next five years to have the biggest basket in the sector and we’re trying to underpin the activities that will help achieve that. Christmas, for example, presents a huge opportunity for us. We lose market share at a time when people are spending more money.
Tackling Christmas in a much more commercial way could have a profound impact on our basket. Sometimes it’s drilling into the detail and identifying specific occasions that are bringing the average down.