The latest survey from Storecheck Marketing shows Kwik Save's fortunes beginning to turn around, but will it be enough for it to face the challenge of Christmas?

The company has struggled since it was sold to the Back To The Future consortium in February.

At the time, Kwik Save had declared a complete overhaul of its supply chain, with a focus on discounted branded goods.

From that point, the battle was on to equip its 184 stores to cater for customer demand.

Events reached a flashpoint in July when store managers voiced their frustrations about the process of placing orders and a drastic reduction in product choice. Their outburst followed results of the first Storecheck survey commissioned by The Grocer revealing the extent of its availability nightmare.

MD Andrew Villars swiftly responded by boldly promising visible improvement within a month. Experts were sceptical, particularly in the wake of recent reports that BTTF had hired PricewaterhouseCoopers to advise on a £30m fundraising deal.

Sources suggested it had been forced to do so because of heavy losses, though others hinted it might be for a new store format. Villars remains tight-lipped, but a follow-up examination of the same shops visited by Storecheck representatives in July suggests he is beginning to make headway.Bread, chillers, freezers and gondola ends have all shown improvement. The tobacco gantry has shown the most startling transformation, with average availability rising from 62% to 85%.

In three of the six stores visited for the first Storecheck visit, chillers and freezers were described by mystery shoppers as "quite empty" or "very empty". Those descriptions only applied to the frozen and chilled sections of one store in the latest feedback.

Previously, in four stores results showed a 63% average availability record for bread mirrored in availability levels in other areas not specifically targeted. Now, a 75% availability average in bread is reported as "worse" than other areas in three of the stores visited. An average 70% availability record for freezers was reportedly the same or better than other areas in all stores visited last time. Now, an average level of 77% is the same as or worse than other areas in three stores.

Some of the findings even downplay the real picture, claims Villars: "If anything, bread is now nearer 20% out of stocks and chillers are nearer 85%. I would like to think the tobacco fixture is 2-5% out of stock in most stores."

He says current improvement has partly been achieved by enhancing the ordering process: "We have moved away from fax-based manual ordering to electronic ordering." He adds: "There is no doubt in my mind that we will continue to maintain this pace."

In response to store managers' frustrations over the lack of ranges available to order, Villars says: "We are going to increase the number of new lines and will continue to do so as we build up towards the Christmas period."

However, communication with store staff still seems to be lacking. The latest Storecheck data shows that though they are proving easier for shoppers to locate, three out of five are still unsure when their next delivery of out of stock products will be.

Supply chain analysts underline that viewpoint. Chris Bassano, managing consultant in the supply chain practice at PA Consulting, says that Storecheck's assessment of Kwik Save's availability levels suggest it is still way behind the top supermarkets.

How it fares over the festive season will be the real test, he adds: "Christmas is a big test of consumer perception. Everybody is more stressed and if they have to go back to stores again to get products they missed before, they are not going to be happy."

However, he says: "It does come back to what the current Kwik Save shopper looks like. Their expectations might be different to Tesco or Asda shoppers."

Another analyst said Kwik Save probably had about two weeks to put an action plan together for Christmas if it had not already done so and six weeks to implement it. He said: "The core questions are, is the range going to change in the build up to Christmas and are they bringing in additional Christmas lines? How much of a handle do they have on demand and do they have a strategy to implement that?"

These are questions that only the next three months will reveal the answers to, but if Storecheck's latest research is anything to go by, reports of Kwik Save's demise may prove premature. n