Spar wholesaler to invest £1m to cut prices and launch new small format store

Spar wholesaler AF Blakemore is investing £1m to reduce the wholesale prices of volume lines including milk, Fosters/Carling cans, granulated sugar and Red Bull.

According to Blakemore, the savings are worth on average £5,000 per annum per store and build on its terms package launched in 2008, worth £7,000 on average per store.

The company has also revealed plans to pilot a new 1,000sq ft food-based store, designed as a step up from a CTN/Off Licence outlet.

The news was announced today at the AF Blakemore Spar conference – SRS 2010 – at the Hilton Metropole at Birmingham’s NEC. Around 600 guests, including Spar retailers and potential recruits, heard about the progress the retailer is making new Blakemore initiatives.

Key features included:

Improved terms package

On top of the £1m in wholesale price discounts, Blakemore has opened its terms package to all of its Spar retailers, including Torex forecourt stores. This expands the potential number of terms stores by almost another 100 stores. Regional sales manager Louis Drake said: “This is a big investment in our retailers who commit their loyalty to us. I am delighted to be able to invite our Torex stores to join the scheme now, and to enhance their profits.”

New pricing strategy

Mike Boardman, trading director, briefed the conference on the new Blakemore Spar pricing strategy. A new system is being tested in Eurospar and will be rolled out to all store price bands this summer. It will monitor competitors’ pricing, and manage all recommended RSPs. The result will be a more competitive pricing position, with investments in price being concentrated on key KVI lines to which customers are most sensitive.

Accompanying the launch there will be a new ‘Everyday Value’ campaign, driven in-store through PoS highlighting the most competitive prices.

Boardman said: “This strategic piece of work will help to reassure shoppers about our prices, and create a change in their price perceptions.”

Guaranteed improvements

Rob Davis, regional sales manager, recapped on Blakemore Spar’s Guaranteed Investment Scheme, by highlighting the profit improvements made by the initial adopters: “It’s a one-way bet – if your profit growth does not exceed the cost of investment, we will fund the difference,” he explained. “That’s what we call supporting small British businesses.”

Davis also showcased investments in stores and announced the launch of a new range of equipment for store refits. For key refrigeration cabinets, the company is adopting a ‘good, better, best’ approach with options for different budgets available from CSL, Blakemore’s shop-fitting business.

Davis also demonstrated a computer simulation of a new model 1,000 sq ft Spar store. This format will be piloted by Blakemore this summer and shows how a store can offer a credible food proposition in limited space. Davis said: “This will be of huge interest to our many committed Spar retailers looking to expand out from a CTN/Off Licence base in small stores. It will also become a magnet for future recruitment into Spar.”

Fresh produce breakthrough

Peter Durose from QV Foods, a new supplier to Blakemore, spoke of the new category approach to produce and said it was central to any food-based c-store. Blakemore will now provide line-by-line plans for small, medium and large produce fixtures; and is launching a new ambient produce fixture from CSL, which will improve presentation in this category.

The conference also heard from some of the best independent retailers in the country. Their stories provided inspiration to the independent retailers in the audience. Speakers included:

Conrad Davies (Eurospar Dolgellau and Blaenau Ffestiniog; Spar Pwllheli)

Raj Hindocah (Spar Perry Bar)

James Brundle (Spar Walthamstow)

Tony Berry (speaking on behalf of Adam Reiss, Spar Cheltenham)

Summing up, Dennis Evans, managing director at Blakemore Spar, said: “We are confident the plans presented today will help our current retail partners to grow their sales and profits; and attract a whole new set of independent retailers to Blakemore Spar. With our Guaranteed Investment Scheme, there is every opportunity for our retailers to invest in their businesses and really drive growth.”