Type of operation: supermarket chain
As the deadline for the Competition Commission's findings on the grocery market comes ever closer, Mark Proudfoot, joint MD of the Proudfoot Group, will be leading the applause if it curbs the might of the multiples. Proudfoot and his eponymous northern supermarket group were on the receiving end of the multiples' power in 2004 when Tesco opened a supermarket in the town of Withernsea, Yorkshire - right in Proudfoot's backyard - with a 40%-off voucher scheme.
Sales at his store fell 35% in the first year and have never recovered. In May this year, Proudfoot finally threw in the towel and sold it to Aldi. “When we were approached we thought hard about it but realised if a discounter were to open a store in the town it would have been the last straw,” he says.
The incident has taken its toll on the Proudfoot Group. Its profits slid 27% in the past year. But after selling off its Withernsea store it can finally concentrate on its remaining four outlets in Lincolnshire and Yorkshire. This year Proudfoot plans to widen product ranges and improve store standards with better merchandising and updated fixtures. His aim is for Proudfoot stores to be an indispensable part of the community by offering products and services that compete with the bigger players.
All Proudfoot stores, which range in size from 3,500 sq ft to 18,000 sq ft, have a non-food range, which is sourced by an importer in Manchester that brings in products from China at competitive rates. The company focuses on household and gardening products rather than larger white goods. Non-food accounts for 9% of the company's turnover and this is set to increase. “We try to carry a wide range of products - about 16,000 lines including non-food - which is a lot compared with other smaller stores,” he says.
Its larger stores already boast a post office, butcher, bakery, delicatessen and a strong fruit and veg offer and there is an emphasis on news, tobacco and off-licence. But Proudfoot believes more can be done. The company has started sourcing chickens from a nearby supplier and is looking to secure more locally sourced products. The company's image is also getting a makeover. In June it refurbished and extended its oldest store in Seamer, North Yorkshire, at a cost of £150,000, to include more chillers for beers, wines and dairy and more shelf space for pre-prepared butchery.
Environmental changes are also being made to show the group can be a greener operator. The store is fitted with 28 'sky tunnels' that channel daylight through the aisles. Not only does this save energy, it also increases sales because products look more appealing in natural light.
The store also uses insulation designed by NASA, heat exchange pumps, high-efficiency refrigeration compressors and a solar-powered water heater, which have resulted in a 30% saving on utility bills. The company is seeking planning permission to put a wind turbine on the roof.
And all the while Proudfoot has to run the chain while dealing with the Nisa Today's saga. As chairman of the Nisa Members' Association, he accused Nisa of losing touch with the membership and helped scupper a merger deal with Costcutter. However, the two have since found agreement in how the group is to move forward.
After disbanding the rebel Nisa members group and burying the hatchet with Nisa Today's, he has more time on his hands. “The NMA did what it needed to do and now members are looking forward to seeing the new plan work its way through,” he says. “It was tough being the chairman and running the company. We gave up a massive amount of our time.”
Proudfoot is keen to get back to the business of running his stores, but whether this new-found time will lead to more store openings is unclear. He admits he is looking at stores to buy but says that, with most sizeable properties carrying a price tag of millions, the company will focus on smaller stores.
But even these are proving difficult to pin down and Proudfoot says his first concern will be focusing on his existing business. “We've no plans to open any more stores at the moment - finding sites in our distribution area can be tricky.”