The multiples’ invasion holds no fears for Rusts, says Anne Bruce
Rusts is creeping up The Grocer’s Top 50 chart of independent grocers. The 12-store Swindon-based operation scraped in at number 50 when we compiled our annual league table in February 2004. But times are changing. Some key companies have fallen by the wayside as independents - Bells (no 15), Adminstore (10) and Aberness (33) have been absorbed by Sainsbury, Tesco and Somerfield respectively - which means Rusts is heading for the 47th spot in our league.
As the multiples continue their feeding frenzy, is there any danger that Rusts might go the same way?
Definitely not according to John Cox, managing director of the Londis-supplied chain, which celebrated its 25th anniversary last year.
He rules out any idea of selling up. “We have had plenty of approaches from the multiple grocers in the past, but our chairman John Emeny has vehemently and constantly stated that the company is not for sale,” he says.
Cox says he has other things on his mind.
Rusts, as one of Londis’ bigger customers, is heavily involved in the Londis takeover saga. Both Emeny and Cox want Londis shareholders to reject this week’s £360m approved bid from Musgrave (see p35).
They would prefer Londis to remain a mutual company, but think it should liaise with another wholesaler to improve its buying power and chilled food range.
Supermarkets are able to get more favourable terms from suppliers and their fresh fruit and chilled ranges are superior, he explains.
Wholesalers working together would be able to get an improved deal for independents, he says.
The management, headed by Emeny, who founded the company, is not fazed by competition from the multiples in the convenience sector, Cox insists.
He says: “Tesco can get on with it. Rusts is a neighbourhood chain and we see our competitors as shops within half a mile of our store. “So unless a supermarket opens a convenience store in the same parade as us, we won’t be affected.”
He has good reason to feel confident. Sales are on the increase. The retailer reported sales rising from £12.1m to £12.9m for the year ending January 2004, excluding VAT and lottery.
That is not to say it is immune to the common problems of convenience retailing - from the red tape burden of regulatory compliance to high staff turnover. But sometimes a little lateral thinking can help tackle these problems, says Cox.
Take the example of shoplifters, who target high value items like bacon, hairspray analgesics and coffee.
Last year Cox put up closed-circuit television stills of three shoplifters in action on the noticeboard of Rusts’ Covingham Square store in Swindon.
A notice offered £100 reward to shoppers who could name those involved. Three names were duly put forward and passed on to the police, and two arrests were made.
Emeny says he tried a similar exercise again, displaying a picture of another shoplifter, but the picture was stolen from the noticeboard. But all was not lost - security camera footage later revealed that it had been removed… by the suspect!
Rusts is now on the acquisition trail, ideally for a cluster of five or six stores in the Swindon area,although it would consider buying suitable single stores as well.
The larger the chain gets the better, according to Cox. New sites are needed to grow turnover.
And, of course, Rusts needs more stores if it wants to progress further up The Grocer Top 50. It cannot rely on the multiples buying up its competitors.
Rusts is creeping up The Grocer’s Top 50 chart of independent grocers. The 12-store Swindon-based operation scraped in at number 50 when we compiled our annual league table in February 2004. But times are changing. Some key companies have fallen by the wayside as independents - Bells (no 15), Adminstore (10) and Aberness (33) have been absorbed by Sainsbury, Tesco and Somerfield respectively - which means Rusts is heading for the 47th spot in our league.
As the multiples continue their feeding frenzy, is there any danger that Rusts might go the same way?
Definitely not according to John Cox, managing director of the Londis-supplied chain, which celebrated its 25th anniversary last year.
He rules out any idea of selling up. “We have had plenty of approaches from the multiple grocers in the past, but our chairman John Emeny has vehemently and constantly stated that the company is not for sale,” he says.
Cox says he has other things on his mind.
Rusts, as one of Londis’ bigger customers, is heavily involved in the Londis takeover saga. Both Emeny and Cox want Londis shareholders to reject this week’s £360m approved bid from Musgrave (see p35).
They would prefer Londis to remain a mutual company, but think it should liaise with another wholesaler to improve its buying power and chilled food range.
Supermarkets are able to get more favourable terms from suppliers and their fresh fruit and chilled ranges are superior, he explains.
Wholesalers working together would be able to get an improved deal for independents, he says.
The management, headed by Emeny, who founded the company, is not fazed by competition from the multiples in the convenience sector, Cox insists.
He says: “Tesco can get on with it. Rusts is a neighbourhood chain and we see our competitors as shops within half a mile of our store. “So unless a supermarket opens a convenience store in the same parade as us, we won’t be affected.”
He has good reason to feel confident. Sales are on the increase. The retailer reported sales rising from £12.1m to £12.9m for the year ending January 2004, excluding VAT and lottery.
That is not to say it is immune to the common problems of convenience retailing - from the red tape burden of regulatory compliance to high staff turnover. But sometimes a little lateral thinking can help tackle these problems, says Cox.
Take the example of shoplifters, who target high value items like bacon, hairspray analgesics and coffee.
Last year Cox put up closed-circuit television stills of three shoplifters in action on the noticeboard of Rusts’ Covingham Square store in Swindon.
A notice offered £100 reward to shoppers who could name those involved. Three names were duly put forward and passed on to the police, and two arrests were made.
Emeny says he tried a similar exercise again, displaying a picture of another shoplifter, but the picture was stolen from the noticeboard. But all was not lost - security camera footage later revealed that it had been removed… by the suspect!
Rusts is now on the acquisition trail, ideally for a cluster of five or six stores in the Swindon area,although it would consider buying suitable single stores as well.
The larger the chain gets the better, according to Cox. New sites are needed to grow turnover.
And, of course, Rusts needs more stores if it wants to progress further up The Grocer Top 50. It cannot rely on the multiples buying up its competitors.
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