Appleby Westward has undergone a period of upheaval over the past few months.

Last October the group's Irish parent company, BWG, completed an MBO from its private equity owners Electra Partners. A month later Southern Co-operatives bought 11 RNS Higgins Stores, which had been supplied by Appleby Westward.

At the time, MD Ian Connell assured his customers that little would change operationally following the BWG deal and, indeed, it is the loss of the RNS stores which has had the most immediate impact. "For the five months to the end of May sales are 2% above budget but 3% behind last year," admits Connell. "However, profit is currently well above budget and 13% above last year."

Exceeding last year's profitability is no mean feat. In 2006 sales were up 3.2% to £146.2m, with pre-tax profit up 8.6% to £3.8m. This made Appleby Westward one of the UK's most profitable wholesalers, with a respectable margin of 2.6%. Connell says its continuing strong performance is down to the hard work of a dedicated and settled team. Staff turnover is less than 10%, he adds with pride.

So far this year the main focus for the group has been on recruitment of retailers to replace those lost last year and to grow the business. Nine recruits have been signed up so far this year, all with stores above 1,500sq ft, and Connell has set a target of 32 new stores this year.

The key is finding forward-thinking retailers with whom the group can develop strong partnerships," he says.

"We continue to make capital investment with retailers and this year plan to invest up to £2m on developing their stores."

New technology will be key. A new voice picking system, which the group has implemented in its Saltash depot, has already improved the availability it can offer retail customers. Implemented six months ago, the system's service level for retailers has now reached an average of 98.2%.

In terms of its relationship with BWG, Connell says there has been little day-to-day change, but that the two groups are now in a better position to share ideas and information.

BWG, through its Spar Ireland operation, has been praised in convenience store circles for the innovative way it has taken advantage of Ireland's current population dynamics. BWG has tailored many of its stores, particularly in Dublin, to Ireland's unusually young poulation.

Appleby Westward plans to roll out some of its own innovations later this year.

"We are already looking to trial some of the innovative solutions found in Spar Ireland, such as the Treehouse smoothie bar, coffee bars, noodle bars and other enhanced food-to-go solutions," says Connell.

"We have always worked well with BWG. As long as we perform they always support us and let us get on with it. I think that Peter Kealy, BWG and

Spar Ireland MD, has one of, if not the, best retail minds in the sector. He is always a great supporter of us, having been our MD between 1997 and 2000."

Leo Crawford, BWG and Appleby Westward chairman, is also president of Spar Internatinal and Connell says this allows Appleby Westward to take advantage of the best ideas from retailers all over the world.

In terms of joint ventures, Appleby Westward and BWG are also keen to develop the Eurospar store format, which has been developed for stores over 3,000sq ft. Larger than a traditional Spar, Eurospars are more like a mini-supermarket offering a one-stop shop. It is an established success both for BWG in the Republic of Ireland and Henderson Group in Northern Ireland, but as yet has not been developed on the UK mainland.

Appleby Westward is currently looking for a suitable retailer to take on this concept and that BWG would be prepared to support it with extra capital, says Connell.

"We hope to have at least a couple of flagship sites up and running by the end of the year," he says.

"We are also working on some other exciting projects, which we hope to trial with two or three retailers by the end of the year."n