Somerfield is benchmarking itself against its classiest rivals as it makes a success of Market Fresh says Siân Harrington
Announcing Somerfield’s fourth year of profit growth two weeks ago, executive chairman John von Spreckelsen said investment in modernising stores was paying dividends, both attracting new customers and delivering substantial sales growth.
The retailer’s Market Fresh store in London’s East Dulwich is proof of that. According to Market Fresh head of format Ed Owen, the store has been attracting a new clientele leading to higher customer numbers since opening last month and is the most successful Market Fresh to date.
In the first week sales were up 82% and are still up 50%. The Market Fresh concept is generating “over 30% in sales growth”.
Fresh food comprises 60% of sales and is delivering a margin benefit. Lunchtime sales have doubled, led by sandwiches, sales of which have trebled. And new lines, such as Cranks and Antony Worrall Thompson, have brought incremental sales.
“We are benchmarking Tesco Metro, Sainsbury Local and Simply Food,” says Owen, “and regard Market Fresh as like M& S and Waitrose, only better value for money.”
Somerfield spent £1.8m transforming the Lordship Lane store from 4,970 sq ft to 7, 063 sq ft with a completely new shop fit. This is the largest of the three pilot Market Fresh stores and, like Carshalton and Wanstead which opened last year, it challenges typical perceptions of a Somerfield store.
Chrome fittings, bespoke ceilings and floors, wooden fittings, low level displays and loft-style lighting conjure up an image more akin to a sophisticated bistro or designer coffee shop than a neighbourhood c-store. This image is bolstered by the freshly ground coffee, freshly squeezed orange juice and an olive oil dispensary. Buyers have helped develop specific products and the oils and coffee buyers have been particularly innovative, says Owen.
There are 300 lines of fruit and veg and every Somerfield Recipe Dish is on sale, as is every So Good line in fresh.Wanstead and Carshalton are already in the top 10 for Somerfield Recipe Dish sales.
Bakery commands lots of floorspace and service counters attractively display fresh fish, meat and cheese. “It proves you can put delis into small stores if you get the ranging and location right,” says Owen.
The store is one of 13 across Somerfield’s estate testing U Scan self-service checkouts.
Market Fresh is the result of Somerfield’s strategy to define optimum store formats, what Owen calls “defendable and robust formats where we could look at being best in class”. This strategy has also spawned the Essentials and Progressive formats.
“In a world tour of 65 individual stores across 42 retailers and five countries, we were bombarded with quality messages,” says Owen. “We came back with 150 lessons.”
The estate was analysed and a group found in which sales of fresh, bagged salads and Recipe Dishes were high. “These stores were probably urban, 4,000-7,000 sq ft and with a basket spend of £7-8,” says Owen. “There were lots of transactions and the stores were profitable, but could be more so.”
Hence Market Fresh was born and, judging by the amount of people the day we visited, is doing something right. In fact, some shoppers were doing a trolley shop.
There is a fine line to tread between the higher margins on fresh and wastage and a heavy labour investment. The wastage allowance is higher and the labour structure heavier than in a typical supermarket of this size. There is a policy of always manning all the tills while staff have been trained in charcuterie and cheese skills.
“It is about fresh food specialism backed up by expertise in people,” says Owen. And in manager Jason Butts Somerfield certainly has some specialism - he is a trained chef.
One of the keys to the success of Market Fresh will be to retain existing customers while attracting new ones. For this reason, Somerfield’s Saver message is still there, albeit more subtly communicated. There are fewer promotions though these are still an important element.
The challenge now is to value engineer the concept. The huge R& D investment will be offset by bulk-buying shop fittings as the format is rolled out to 15 this financial year and up to 100 stores eventually.
Announcing Somerfield’s fourth year of profit growth two weeks ago, executive chairman John von Spreckelsen said investment in modernising stores was paying dividends, both attracting new customers and delivering substantial sales growth.
The retailer’s Market Fresh store in London’s East Dulwich is proof of that. According to Market Fresh head of format Ed Owen, the store has been attracting a new clientele leading to higher customer numbers since opening last month and is the most successful Market Fresh to date.
In the first week sales were up 82% and are still up 50%. The Market Fresh concept is generating “over 30% in sales growth”.
Fresh food comprises 60% of sales and is delivering a margin benefit. Lunchtime sales have doubled, led by sandwiches, sales of which have trebled. And new lines, such as Cranks and Antony Worrall Thompson, have brought incremental sales.
“We are benchmarking Tesco Metro, Sainsbury Local and Simply Food,” says Owen, “and regard Market Fresh as like M& S and Waitrose, only better value for money.”
Somerfield spent £1.8m transforming the Lordship Lane store from 4,970 sq ft to 7, 063 sq ft with a completely new shop fit. This is the largest of the three pilot Market Fresh stores and, like Carshalton and Wanstead which opened last year, it challenges typical perceptions of a Somerfield store.
Chrome fittings, bespoke ceilings and floors, wooden fittings, low level displays and loft-style lighting conjure up an image more akin to a sophisticated bistro or designer coffee shop than a neighbourhood c-store. This image is bolstered by the freshly ground coffee, freshly squeezed orange juice and an olive oil dispensary. Buyers have helped develop specific products and the oils and coffee buyers have been particularly innovative, says Owen.
There are 300 lines of fruit and veg and every Somerfield Recipe Dish is on sale, as is every So Good line in fresh.Wanstead and Carshalton are already in the top 10 for Somerfield Recipe Dish sales.
Bakery commands lots of floorspace and service counters attractively display fresh fish, meat and cheese. “It proves you can put delis into small stores if you get the ranging and location right,” says Owen.
The store is one of 13 across Somerfield’s estate testing U Scan self-service checkouts.
Market Fresh is the result of Somerfield’s strategy to define optimum store formats, what Owen calls “defendable and robust formats where we could look at being best in class”. This strategy has also spawned the Essentials and Progressive formats.
“In a world tour of 65 individual stores across 42 retailers and five countries, we were bombarded with quality messages,” says Owen. “We came back with 150 lessons.”
The estate was analysed and a group found in which sales of fresh, bagged salads and Recipe Dishes were high. “These stores were probably urban, 4,000-7,000 sq ft and with a basket spend of £7-8,” says Owen. “There were lots of transactions and the stores were profitable, but could be more so.”
Hence Market Fresh was born and, judging by the amount of people the day we visited, is doing something right. In fact, some shoppers were doing a trolley shop.
There is a fine line to tread between the higher margins on fresh and wastage and a heavy labour investment. The wastage allowance is higher and the labour structure heavier than in a typical supermarket of this size. There is a policy of always manning all the tills while staff have been trained in charcuterie and cheese skills.
“It is about fresh food specialism backed up by expertise in people,” says Owen. And in manager Jason Butts Somerfield certainly has some specialism - he is a trained chef.
One of the keys to the success of Market Fresh will be to retain existing customers while attracting new ones. For this reason, Somerfield’s Saver message is still there, albeit more subtly communicated. There are fewer promotions though these are still an important element.
The challenge now is to value engineer the concept. The huge R& D investment will be offset by bulk-buying shop fittings as the format is rolled out to 15 this financial year and up to 100 stores eventually.
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