Makro takes The Grocer on a tour of the new-look depots, where sharper ranging has been accompanied by staff empowerment
The task facing Makro’s new board couldn’t be clearer. The company last made a profit in 2006 when Tony Blair was PM. It has accumulated losses of £147m.
So, with the management consultants finally leaving in January, and a plan in place, The Grocer went to visit one of the newly refurbished depots to find out what’s cooking.
On a tour of the 122,000 sq ft depot in Washington, Tyne and Wear, operations director Stephen Blan reveals how the customer will be at the heart of what it does.
A refurbishment of all 30 depots, begun in March, will be completed by the end of July. The 13 sites with an upstairs area had their travelator removed, so everything is now on one level. Only 20% of customers ever went upstairs - tricky with an industrial trolley - and Makro has received great feedback, says Blan, from customers who thought it had brought in new ranges.
Other non-core ranges, such as sportswear, have been dropped, so the surviving categories can be deepened.
Turnstiles have also been removed from the front of the store so customers can walk straight in after waving their card at front desk staff. They will then see more theatre in a seasonal area that will change every three to six weeks.
One third of Makro’s customers are known internally as SCOs - services, companies and organisations. This roughly means someone who buys coffee for their office, but uses Makro for personal shopping too. They will find the general assortment area much more aligned to a retail experience, with brighter colours, better spaced-out aisles, and gondola end deals. Products are on shelves to examine instead of stacked up to above eye level.
Retail and catering customers will find a greater focus on leading brands and own label. Suppliers will be invited to trial products more often.
Makro’s refurb programme also includes a four-week training programme for staff to learn about the products they sell and customer service. “Interaction with customers has not been front of our agenda. We’ve been product-based for years,” says Blan.
Staff engagement feeds into Blan’s mission to transform Makro from a top-down to bottom-up organisation. “Everything went to the store manager who would cascade the information out,” says Blan. “If we turn that on its head and say ‘what do the stores need?’ it should seep upwards.”
Buying influence will transfer to store managers, who can ask the renamed Manchester “support centre” to source what local customers want and also have a say on national ranges. “There’s nobody who knows what the fish customers in Bristol want more than the fishmonger in Bristol,” says Blan. “These guys must have the autonomy to know what their customers need and use the support centre and the board to deliver that.”
Makro’s focus is on HoReCa. The butcher reports a surge of former DBC customers. “I don’t think Costco or Booker are fishing in the same pond,” says Blan. “Costco doesn’t cater for hotels and restaurants like us. They don’t have a meat room where they’ll cut your beef into any fillet you like and repackage it. Booker doesn’t have fresh fruit & veg and fish like we do. I’m not sure where our new HoReCa customers are coming from and I don’t really mind. I think we’re better than our competitors in most areas. If we have to adjust our opening times and assortment to make the experience more efficient, then brilliant.”