Spinneys focuses on bringing in products with a lengthy shelf life, importing 50 20ft sea containers each month, while less durable goods travel by air. Imported faves include Thorntons chocolate, Baxters soup, Branston pickle, Summer Isle and Bernard Matthews meats, Rachel’s Organic yoghurts, Ford Farm cheese and last but certainly not least, a range of Waitrose-branded products that it sells as part of a tie-up with the retailer.
The company – which was given permission to use the Spinneys name by the otherwise unconnected major Middle East retailer Spinneys Group – operates 43 outlets across the UAE and Oman comprising 18 c-stores and 25 full supermarkets. Johannes – or Jannie – Holtzhausen, the engaging Namibian-born CEO, predicts another five stores will have opened by the year-end, three of which are likely to be supermarkets, and estimates total sales will be “close to $500m (£281m)” for 2008, up from $375m the previous year. Even so, the nomination from FFB was something of a bolt from the blue, he admits.
“I was a bit surprised, as we are a relatively small company and I didn’t think we were doing enough business with the UK,” he says with characteristic candour. To him, the business’s lack of critical mass is not a weakness. Indeed, he preaches a credo altogether removed from the obsession with margins at the UK’s largest retailers.
His vision is to create in each store a ‘theatre of food’ that offers genuinely enjoyable shopping. Holtzhausen joined Spinneys Dubai in 2002, when the business had just eight retail outlets in Dubai and a further two in Abu Dhabi. Under Holtzhausen, growth accelerated rapidly and he wants to keep up the pace.
“We have not previously been active outside the UAE and Oman,” he says, “but now are actively exploring the other Gulf Co-operation Council countries and the Middle East and North Africa. We are quite cautious; I don’t believe you should expand until you have the support systems and logistics. But we now have those.”
One element of that support is the supply deal to stock lines from Waitrose, which – alone among the UK’s top supermarkets – could argue it shares the ‘theatre of food’ ethos.
“We were initially attracted to Waitrose as it has similar values,” he says, pointing to a focus on “quality, health and attention to customer service” as three pillars the businesses have in common.
Departments with interacting store assistants are critical for the success of the company, Holtzhausen says. “Some 50% of our sales are fresh – all our stores have bakeries and many have butchers,” he adds. “Maybe 5% of sales by value are pre-packed goods. That is the main difference between the UK and the Middle East. In the UK there are labour-saving devices for retailers, such as vast crates of oranges and milk. They may be efficient for retailers but they have not made shopping a more pleasant experience for customers. Our ethos is that we do beautiful displays of food.”
Meanwhile, the c-stores are “doing incredibly well”, working to a formula with an emphasis on getting right the location, product mix, focus on fresh, pack size, store ambience and back-up stock. Seventy percent of Spinney’s revenue is generated by ex-pats, so getting prime location space in and around the areas they live is important, but Holzhausen says it is not always easy to find locations as a couple of large developers control a lot of real estate.
“If you don’t run your business well enough to keep them happy, you won’t get a location. So there is a limit to what you can pay for real estate,” he says. Nevertheless, UK exporters will have noted the company’s expansion plans. “We are very interested in dairy,” says Holtzhausen, pointing to cottage and speciality cheeses from the UK in particular, “and some of the yoghurts are absolutely a pleasure to go pick from the shelves.“
And if it were not for the well-documented difficulties exporting UK meat, that, too, would have a more substantial presence. Holtzhausen says Spinneys used to sell “a huge amount of Irish beef” before the export bans, while Welsh lamb is only now returning to the retailer’s shelves. Holtzhausen recalls travelling to the UK to meet a Waitrose pork supplier and stepping off the plane to discover the foot and mouth crisis had erupted en route.
However, circumstance has also worked in his favour – he “did have a giggle” after chance prevented him from making a rare mis-step.
“For three years I was pushing to get more fruit and vegetables pre-packed,” he says, “and it took a long time to get it agreed within the business. Now the tide has turned against extra packaging. We nearly invested a lot of money in that.”
Instead, Spinneys has invested in taking the best of home-grown produce to a new market. It’s an opportunity that UK suppliers shouldn’t ignore.