People say that retailing is a pretty straightforward business," says Spar UK MD Jerry Marwood. "But the truth is, this is not a simple business anymore."
He should know. In his five years with Spar, Marwood has emerged as an important figurehead for the independent sector and did indeed play an active role in convincing the OFT to refer the grocery market to the Competition Commission. He is always willing to speak out - though not usually in quite such a forthright manner as last week when he berated BRC director general Kevin Hawkins for his defence of the Supermarkets Code of Practice, accusing him of writing "in the style of a petulant schoolboy" (Letters, The Grocer, 8 September, p28).
Normally he avoids knocking the press in favour of accentuating the positive. And as Spar marks five decades in the UK (it began life in Amsterdam), there are plenty of positives, not least the fact that the retailer remains the biggest symbol operator in the country.
But there are also plenty of challenges - and one of the biggest is driving innovation in a mature sector.
Thanks to the incursion of other players into the symbol group sector, Spar's market share has plummeted from 38% share to 20% since 2000, while its sales have increased just 4% [The Knowledge Store/IGD]. Although it still leads the sector in terms of store numbers with more than 2,700, the number has dwindled as more players have entered with their own fascias.
From a standing start Booker has added more than 2,000 stores to its Premier fascia while Landmark has developed 1,500 stores through its Hothouse scheme during the same period. And that's before you get on to the convenience offerings from the likes of Tesco, Sainsbury's and the various Co-ops.
The days of strategies as groundbreaking as Eight Till Late, first developed by Spar in 1981, are long gone. "I guess we have been searching for the new Eight Till Late for a while now," he says of the precursor to marketing concept So Near So Spar. But, he concedes, the sector has developed to such a degree, one simple business-defining strategy is no longer possible.
Another challenge is coping with the unique structure of the business. Spar UK central office in London supports six independent regional distribution companies that in turn supply and support Spar's independent retailers throughout the UK. In total the entire operation is made up of 1,600 fiercely independent businesses that work together. Collectively they serve 12 million customers a week. Acknowledging that a one-size-fits-all-strategy would never work, last year Marwood unveiled seven evolving trading formats that would form the basis of future stores.
"We spent two-and-a-half years developing these formats but we can't stop there as each concept will need to be continuously updated ," says Marwood.
The idea is to develop seven flagship stores annually, each in a different format: Urban Life, Neighbourhood Value, Neighbourhood Affluent, Community Supermarket and Eurospar, a larger one-stop shop concept developed by Henderson Group in Northern Ireland and now being introduced to Spar retailers in the rest of the UK.
Since the end of phase one of the roll-out, Spar has continued to refine the concept with consultants SRCG. This month it has invested £4m in a second tranche of seven new stores. The roll-out will be accompanied by more targeted marketing this time round. "We need to be more aggressive in promoting the new ideas and making our independent retailers more aware of what is available and the benefits of investing alongside Spar," says Marwood.
He sees food to go as a major opportunity - no surprise given that food to go through Spar stores has leapt 119% over the past year. "It's a real growth area and we've made great progress in developing a number of different options to suit a range of different store types," he says.
While developing its own food to go offer, it is also borrowing ideas from Spar Ireland, which has won many plaudits for the innovative foodservice concepts pioneered by Spar Ireland owner BWG. Earlier this year Spar UK introduced the first Treehouse smoothie bar, a concept first introduced in Dublin, at a Tates-owned store in Battlefield in Shropshire.
Spar has also made a substantial investment in developing its own label offering, improving the quality and variety of its range over the past couple of years and last March unveiling the first wave of its new premium range Spar Treat Yourself. The latter has been a big hit and benchmarked against both supermarkets and convenience rivals, reports Marwood. "We are very pleased with the look and quality," he says. "When you see the products on shelf they look fantastic."
Fresh produce is constantly talked about as a key growth opportunity for the convenience sector but many operators are still struggling to get to grips with it and persuade shoppers they can get good quality fresh produce in a c-store. Marwood, however, feels Spar is getting there. "We are very happy with our fresh produce," he says. "We have a great selection in many stores. We have, to name just one example, up to five different varieties of tomatoes, which is a real change to how c-stores did fresh a few years ago."
Indeed, the fresh fixture is now the first thing a shopper sees when they enter a new store.
In terms of wider strategic issues, all eyes remain on the much-vaunted buying alliance between Spar and the Co-operative Group, which was announced last August. Marwood stresses that it's still embryonic and rubbishes suggestions a merger may be on the cards.
"We are making steady progress as it is actually a very technical piece of work. It remains what we said it would be in the beginning, focused on own brand commodities," he says. "There are certain areas in which we have shared buying objectives and we can work together in order to compete better against the multiples. At the end of the day we are still competitors and there is certainly no merger on the cards."
Meanwhile, he remains optimistic about what the future holds over the next 50 years for Spar. "There is a lot of confidence in the sector because there are a lot of very good retailers out there," he says. "What we have to do is continue to build good stores and support our retailers as best we can so that those who succeed us have something to celebrate in 2057."n
Q&A
What is your career history?
I started as a trainee manager with Gateway and had spells with Somerfield and Tesco before first joining Spar in 1996. In 1999 I joined Newshops in Bristol, which is now Smile Stores, as managing director and returned to Spar in 2002.
What is a typical day like?
There are things we do regularly such as one-to-ones with the team or RDC and retailer visits, but there is no typical day. The variety is one of the best things about this job.
What's your view on the latest developments in the Competition Commission inquiry?
Through the Association of Convenience Stores we are still talking to the commission and providing examples of the impact of buying power. Obviously we are not naive about what is going to happen and don't believe that the commission will solve all our problems. But ultimately we feel there isn't a level playing field for independents and multiples.
How often do you shop at a Spar store?
My local store is a Spar - hello Garry and Julie - so I shop there at least once a week, plus others I see when I'm out and about. I do a share of the household shopping specifically so that I can visit competitors, it's invaluable.
How was Glastonbury this year?
Wet, we go every year because it's so close to where we live. We just went down on the Saturday this year but unfortunately it kept raining and it was just so muddy it was almost impossible to get anywhere to see any of the bands. We ended up going home quite early.
How do you relax?
I have a two-year-old son - you can never relax!
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