The Jack Fulton discount chain is set for growth says Julian Hunt
There’s no market in Bury on a Thursday and that part of town is usually pretty quiet. But you wouldn’t know it if you popped into the Jack Fulton frozen food discount store around the corner from the world famous market. The store is buzzing as shoppers pop in to pick up bargains on brands such as M& M’s ice cream cones, Birds Eye Chicken Dippers and McCain Micro Pizza.
“We affectionately think of our business as a market stall with walls,” says managing director Kevin Gunter. Such tongue-in-cheek affection belies the fact that Jack Fulton has been trading successfully for 44 years and the business behind it - Frozen Value - is a slick operation.
Stores are typically 2,000 sq ft (although some are up to 4,000 sq ft); are crewed by four or five staff; are equipped with EPoS; take credit and debit cards; and sell 700 to 800 lines. The range does include some ambient and chilled, but no booze. But its core is frozen foods - all of it bought in parcels; all of it sold at amazingly low prices. Gunter says: “There is a misconception that because of the prices we sell at, we must be selling short-coded stock. It’s just not true.”
People know they can get good brands, he says, and that allows the chain’s marketing to be pretty much by word of mouth. “The lines are always changing because we are parcel buyers and that brings people into the shops,” he explains. “They know they have to buy today because it will be gone tomorrow. And then they come in again tomorrow because they know we have constantly changing stock.”
The business trades out of 64 shops, the majority in Yorkshire, serviced from a head office and warehouse in Garforth, Leeds.
Gunter was part of the team that bought the business in 1997 from Jack Fulton (now chairman of Castleford Tigers Rugby League Club) and has spent his life in retail. His CV includes stints with Asda, Argyll, Safeway, Budgens, Sears and the board of the WW Group, owner of the What Everyone Wants chain, which he left to buy Jack Fulton.
He and his team found their initial plans stymied by the fact their relatively small operation ended up with three major venture capitalists as shareholders. It all came about by accident rather than design, says Gunter, but this complex ownership structure did make life difficult.
The business has now been restructured and refinanced - with Gunter and finance director Karen Rees holding 60% and 3i the remainder. It has also drafted in some impressive non-execs including Carel Stassen, formerly with Brown & Jackson, who is part-time chairman, and David Mitchell, ex-MD of Thorntons. While it has been difficult to untangle the operation from its VCs, Gunter says its success in that time shows how robust the business is. “We are now poised to move forwards,” he adds. “We are in a position to grow the business and will get into new geographical areas in the next five years. And we have a programme to refurbish stores and relocate some of them.”
The only cloud on the horizon comes not from rival discounters but from the government. “The big issue for me in the last seven years has been the increased costs associated with rising legislation which has become a huge burden on all small businesses. We are a business that turns over £40m and makes £2m profit a year and have been hit by £1.5m a year in extra costs because of new legislation. We have to work hard to make up that ground.”
Like many of the retailers featured on The Grocer Top 50, he is left feeling bewildered by the government’s attitude and what he says is the lack of any understanding of the impact that its decisions have on small retail businesses.
“Competition has always been there and it has always been tough and you expect that. What we don’t necessarily expect is to have legislation coming at you on all fronts because that impacts smaller businesses far more than it does the big retailers.”
Still, Gunter is keen to take advantage of the many opportunities that exist. And when he looks around a store like Bury it clearly reminds him of why he got into this business in the first place: “Buying is exciting. Dealing with property is exciting. And there’s always a buzz when we are in a shop and it’s busy and the tills are ringing.”
There’s no market in Bury on a Thursday and that part of town is usually pretty quiet. But you wouldn’t know it if you popped into the Jack Fulton frozen food discount store around the corner from the world famous market. The store is buzzing as shoppers pop in to pick up bargains on brands such as M& M’s ice cream cones, Birds Eye Chicken Dippers and McCain Micro Pizza.
“We affectionately think of our business as a market stall with walls,” says managing director Kevin Gunter. Such tongue-in-cheek affection belies the fact that Jack Fulton has been trading successfully for 44 years and the business behind it - Frozen Value - is a slick operation.
Stores are typically 2,000 sq ft (although some are up to 4,000 sq ft); are crewed by four or five staff; are equipped with EPoS; take credit and debit cards; and sell 700 to 800 lines. The range does include some ambient and chilled, but no booze. But its core is frozen foods - all of it bought in parcels; all of it sold at amazingly low prices. Gunter says: “There is a misconception that because of the prices we sell at, we must be selling short-coded stock. It’s just not true.”
People know they can get good brands, he says, and that allows the chain’s marketing to be pretty much by word of mouth. “The lines are always changing because we are parcel buyers and that brings people into the shops,” he explains. “They know they have to buy today because it will be gone tomorrow. And then they come in again tomorrow because they know we have constantly changing stock.”
The business trades out of 64 shops, the majority in Yorkshire, serviced from a head office and warehouse in Garforth, Leeds.
Gunter was part of the team that bought the business in 1997 from Jack Fulton (now chairman of Castleford Tigers Rugby League Club) and has spent his life in retail. His CV includes stints with Asda, Argyll, Safeway, Budgens, Sears and the board of the WW Group, owner of the What Everyone Wants chain, which he left to buy Jack Fulton.
He and his team found their initial plans stymied by the fact their relatively small operation ended up with three major venture capitalists as shareholders. It all came about by accident rather than design, says Gunter, but this complex ownership structure did make life difficult.
The business has now been restructured and refinanced - with Gunter and finance director Karen Rees holding 60% and 3i the remainder. It has also drafted in some impressive non-execs including Carel Stassen, formerly with Brown & Jackson, who is part-time chairman, and David Mitchell, ex-MD of Thorntons. While it has been difficult to untangle the operation from its VCs, Gunter says its success in that time shows how robust the business is. “We are now poised to move forwards,” he adds. “We are in a position to grow the business and will get into new geographical areas in the next five years. And we have a programme to refurbish stores and relocate some of them.”
The only cloud on the horizon comes not from rival discounters but from the government. “The big issue for me in the last seven years has been the increased costs associated with rising legislation which has become a huge burden on all small businesses. We are a business that turns over £40m and makes £2m profit a year and have been hit by £1.5m a year in extra costs because of new legislation. We have to work hard to make up that ground.”
Like many of the retailers featured on The Grocer Top 50, he is left feeling bewildered by the government’s attitude and what he says is the lack of any understanding of the impact that its decisions have on small retail businesses.
“Competition has always been there and it has always been tough and you expect that. What we don’t necessarily expect is to have legislation coming at you on all fronts because that impacts smaller businesses far more than it does the big retailers.”
Still, Gunter is keen to take advantage of the many opportunities that exist. And when he looks around a store like Bury it clearly reminds him of why he got into this business in the first place: “Buying is exciting. Dealing with property is exciting. And there’s always a buzz when we are in a shop and it’s busy and the tills are ringing.”
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