Sales at the 130-strong convenience store chain My Local are currently £25m below the levels achieved when the stores were still owned by Morrisons, CEO Mike Greene has admitted.
Speaking at My Local’s first-ever supplier conference in Leeds this week, Greene said the new chain was hit by an initial availability crisis when it failed to reach agreement with Morrisons over the value of the unsold stock. This resulted in Morrisons clearing all stock from the stores two days before they were due to begin trading.
Greene said My Local had lost customers due to sourcing enough product for stores to open viably and be brought up to speed.
It also lost customers because of the quality of the fresh offer, he admitted. My Local’s fresh lines are being supplied by Nisa as part of a £1bn five-year agreement and while Nisa did fresh better than anyone in convenience, said Greene, it was not as good as the Morrisons offer.
My Local is now working with Nisa to deliver an improved fresh offer for its stores. This will begin next week with fresh veg lines being given best-before dates instead of lunar codes, which are common in convenience but can be confusing to staff and customers in terms of just how fresh products are. Sourcing higher quality meat products is also a priority.
The ranging work is being carried out on a category-by-category basis, kicking off this month with confectionery, crisps and snacks, soft drinks and produce range reviews. In February it will move on to beers and ciders, chilled food, biscuits, bakery and food to go.
Trading director Neil Turton said a key priority was to reintroduce the £3 meal deal which Morrisons had been running, featuring a sandwich, crisps and a drink. Nisa don’t have an own label sandwich range which meant My Local had to find a new supplier that could compete with the multiples in terms of price and quality. It has now done so and the deal will be launched in March.
Turton also explained that driving footfall was the big focus with a regular c-store shopper being worth around £1,200 a year to a store. He said average basket spend was actually up but it was the lost customers that resulted in a fall in sales. The My Local average basket size was over £5 which was above the industry average, he added.
Turton also revealed that My Local’s failure to find a cream cake supplier - after discovering Morrisons sold around £75,000 a week - was the equivalent of two My Local stores weekly takings. A new supplier than can service some of the My Local estate has been added.
Greene expects My Local to begin outperforming the previous sales levels by April as it introduces Paypoint and other footfall drivers. It is trialling partnerships with high street names such as Costa and the Starbucks-owned Seattle’s Best Coffee.
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