Retail Times editor, Fiona Briggs, spent the day with One Stop to discover the appeal of its franchise model to independent retailers
Andrew King, franchise director at One Stop, is unequivocal about the difference between a symbol group operator and the franchise model he heads up.
“We don’t just touch someone’s business, we transform the whole package,” he says.
The acknowledgement that a good or bad business performance can impact people’s livelihoods is also crystal clear. As a case in point, King reveals he spent last Sunday discussing issues with a One Stop franchisee at his home, over lunch.
“We are not friends,” he concedes, “but they are people I like and spend time with.”
That depth of engagement – akin to handholding – is apparent in the One Stop Franchise chain to date but could be tricky to maintain as it expands.
“It will be a challenge for me but we’ve gone from five stores and myself and two or three others to 90 stores signed up and 40 of us, so it’s not as bad as you think,” says King.
One Stop is on a roll.
“Convenience is a big market that continues to grow and there are a significant number of retailers that don’t have affiliation to a symbol group,” says King. “That’s an opportunity for us. Customers expect more from their local shop. They want a great environment, a range of products tailored to what they need and a bit of theatre.
“Symbols are very good at moving boxes but they are not the right boxes,” he maintains.
“We are focused on helping retailers grow their businesses and making them profitable.”
Owned by Tesco, One Stop has the wherewithall for that.
“We have the benefit of Tesco terms, so we buy well,” King says simply. It means One Stop can lead with cheaper prices and great promotions. But that’s not all of the package on offer to franchisees.
Joining retailers receive a significant £50,000 investment into their store re-fit including One Stop’s EPoS system (contactless payment is now being rolled out across the estate following a trial) and back office processes. Then there’s a whole package of retail support or what King refers to as “making retail simpler”. This includes one cost price, no minimum drops and up to three deliveries per week plus the opportunity to source 5% of the range from local suppliers.
The fourth pillar in the programme is working in partnership. One Stop BDMs visit stores every four weeks to review results and help plan ahead plus there’s the assurance One Stop is an accredited associate member of the British Franchise Association and offers a long-term commitment – retailers sign up to a five-year agreement.
Five store pilot
One Stop Franchise was launched with a five store pilot in 2013 spanning a traditional c-store, affiliated retailer, new store, news agent and post office.
“We put the model in and refined it,” recalls King. “The franchisees liked it and and we launched officially in January 2014.”
One year on, there are 75 trading One Stop franchise stores, half of which were unaffiliated independent retailers. The rest comprise a mix recruited from Londis, Premier, Nisa, Costcutter and increasingly Post Offices.
According to King, there’s no particular target and the model is constrained by its minimum footprint of 1,000sq ft. “So it’s not a numbers game,” he says. To date, stores have opened in clusters such as the Potteries, Newcastle, Midlands and South Wales, driven largely by word of mouth.
One Stop Gospel Lane at Acocks Green, Birmingham, is the original Post Office pilot run by Shelley Goel. It is thriving under the franchise model, having doubled turnover to £22,000.00 per week.
The store was tired and did not encourage a top up grocery shop. “It needed a bit of love,” says King.
Goel and One Stop co-invested and Gospel Lane is now very much a destination store in what has become a crowded retail marketplace.
“In Birmingham every pub which closes opens as an Aldi or Lidl. One of the reasons I joined One Stop is a local Co-op opened and my customers started going there.” Now, Co-operative staff shop with Shelley.
Strong promotions and own brand chilled offer
The store benefits from the tremendous One Stop promotions, which account for 32-33% of the sales mix and are staged near the front of the store for maximum impact.
“Once shoppers see the price, they can’t resist,” smiles Shelley. “My regular customers say it’s a cheaper store and has the strongest offer of all.”
The average spend has increased because there’s a lot to tease the shoppers’ wallets, King adds.
The store benefits from a credible chilled offer, Tesco own brand products but with a One Stop wrap; and offers snacking meal deals for £3.00. Larger stores retail three for £6.00 meal deals as well. The wine and beer range has been bolstered too and is very brand oriented.
Fresh cut flowers, a first this Valentine’s Day, sold out within three hours along with cards. As a result, Shelley is ramping up his offer for Mother’s Day and is also promoting Easter Eggs to maximum effect.
The store benefits from daily deliveries on bread and milk and every other day on chilled, frozen lines and core packaged grocery.
The mix ensures a busy store. “At any one time, there’s always a customer in here and they treat it as their store,” says Shelley.
Franchisee support is a critical part of the package.
“One Stop helps me with merchandising – what to stock and what not to stock, which is nine tenths of the game,” Shelley says.
And behind the scenes, franchisees benefit from more One Stop handholding. The company provides support with right to work checks, asbestos surveys, licensing agreements, training on the tills and P&L tools.
Transition period prior to relaunch
Once retailers sign up, there’s a 13-week transition period during which the above take place and a store plan is created, along with plans for the store closure, marketing and relaunch.
The refit takes place in week 11, deploying One Stop’s own shopfitters and equipment. Store launch managers are parachuted in for the reopening, leaflets are distributed to local residents and there’s some razzamatazz with ribbon cutting and local dignitaries and sometimes soap stars in attendance.
Store locations are all carefully vetted by the One Stop model to determine the catchment, ethnicity, spend, retail sales area based on rateable value and viable 7am to 9pm Sunday trading. The store’s range is then geared around the key shopping missions. Sites are typically neighbourhood locations with lots of ‘chimney pots’.
“We don’t fare well on high streets or affluent locations,” says King. Enquiries are fielded at the One Stop Franchise office in Brownhills, strategically located across the road from the One Stop Stores HQ.
Here a team comprising operations, business development managers, launch support managers, finance, retail support and marketing provides the interface with the franchisees.
Crucially, it’s a two way exchange with One Stop learning equally from the franchisees to benefit the wider estate.
King is reluctant to discuss targets for the chain or disclose pipeline numbers but there’s little doubt One Stop Franchise has legs, including a discount pair.
The retailer is currently trialling three One Stop Local Value stores, which claim to offer better value everyday. The stores have fewer promotions and skus, operate case fill merchandising, employ less people and don’t carry any stock.
King stresses it’s just an experiment but one I bet One Stop will watch over closely, just like its retail franchisees.