As someone who confesses he's not a big fan of the independent sector, Conveco boss Allen Hutchby cuts an unusual figure at the helm of one of the fastest growing convenience store chains in the south-west. With a stint as planning and merchandising director at Asda under his belt and years trotting the globe as a consultant for the giants of continental grocery, Hutchby says he's under no illusions about the market he is operating in.
"The brands just aren't strong enough and the whole sector suffers from appalling prices because of immaturity and fragmentation in the marketplace. It's also relatively inefficient in logistics."
And cash & carries will be the first casualties of the slow but inevitable march towards greater consolidation, claims Hutchby: "I just can't see cash & carry being viable in the longer term. In 30 years time, there will probably be only two or three key players in the market."
Ironically, he heads a company that has just added another name to the plethora of brands in the marketplace by pulling away from Alldays, and setting up a new chain branded Localplus. The name change was a risk, admits Hutchby, but a necessary step in the process of "getting away from Alldays".
Conveco comprises three former Alldays regional joint venture companies, which bought out Alldays' interest in the businesses in late 2000 after months of wrangling.
After the protracted breakaway, things moved at lightning speed as he and partner Richard Tipper put together a management team, struck a supply deal with Nisa, installed a new scanning system and poached Lawrence Wilson from Budgens to build an accounting infrastructure.
There was also the small matter of rebadging the 58-strong estate before the licence to trade under the Alldays name expired in May this year. After a lengthy period of research and development, execution was swift, with the rebranding exercise completed in four months.
The format and range has been tailored to demographics, although broadly the portfolio is divided into three groups, says Hutchby: village store, neighbourhood store and city centre store. "The Alldays range was inadequate for our larger stores, despite a good licensed and CTN offer. The Nisa deal allows us to offer a far stronger fresh, chilled and grocery offer."
About 70% of goods are supplied by Nisa direct to stores, although Conveco is considering building its own warehousing facilities for ambient in a few years, he says.
Meanwhile, buying director Joe Dooley has met all the chain's suppliers to raise the new company's profile. Sales-based ordering will be rolled out in the next eight months as part of a general systems overhaul ready for expansion. Conveco has acquired six stores since the split with Alldays, and expansion will continue, says Hutchby. "There are many opportunities in the south-west. We want a £20,000 average from our store base, so we're picking sites carefully." Conveco has 59 sites, with another four coming on board by the end of August.
Like for like sales were up 6.5% in Conveco's first year. "But many stores have had no real marketing activity for four to five years," Hutchby says. As soon as the estate was rebranded, however, Conveco embarked on a marketing drive, distributing new Localplus promotional leaflets to several thousand households in the catchment area every three weeks. But there hasn't been a radical shift in price.
Competition is diverse, says Hutchby, so instead of getting hung up on price, it's a question of getting the basics right. "It's amazing how many convenience stores do not have the obvious top-up products in stock. You deserve to be crucified if you're out of milk and bread.
"The key issue in this sector is finding the right people and keeping them motivated. To some extent, success is largely dependent on store managers.
"If I could take the best one and replicate him across the estate, I'd be a happy man."
{{FEATURES }}
No comments yet