The retail arena in Northern Ireland is dynamic and it’s changing fast. The market is also incredibly competitive as a result of the expanding presence of Tesco Express stores and the hard discounters.

For years, convenience retailing changed little while the food retailing market leaders concentrated on developing superstores to serve the primary weekly shop. But in the last 10 years or so, those same market leaders have turned their attention to the convenience model and developed formats that serve consumers far better. It’s now increasingly clear that there are a variety of different types of locations for convenience stores and each requires a different type of outlet. And there is also a blurring of boundaries as convenience stores add coffee, hot foods, fresh salad and premium chilled foods.

As tough times continue to stretch consumers’ household budgets, bargain-hunting at the local hard discounter has become more attractive to Ulster shoppers. Mintel’s 2009 research showed that 12 per cent of Northern Irish consumers in 2009 regularly shopped at the no-frills operator, Lidl - much lower in fact than in the Republic of Ireland, where one third of consumers shop at Aldi or Lidl. Mintel’s data show that 34 per cent of southern consumers and 17 per cent of northern consumers “shop more at discount retailers” as a result of the recession.

In Germany, hard discounters (of which Aldi and Lidl are easily the largest) account for approaching 40 per cent of all food retailers’ sales. In the UK, they take just 3.5 per cent (rising to an estimated five per cent in Northern Ireland). And that’s not for want of trying - Lidl has more than 500 stores, Aldi has just short of 400 and Netto just under 200 outlets. Lidl first entered the Irish marketplace in 1998, with the opening of its Cookstown store. The company now has approximately 130 stores and 2,500 employees across the island of Ireland.

Since entering the Irish market, Lidl and Aldi’s ranges have evolved in new directions, such as home-grown, fresh, premium and ethnic ranges. No-one knows if they make a profit or not as all of them are obsessively secretive. All are private companies and so are able to take a long-term view. Reports suggest that in 2008, they performed very well as incomes were squeezed and consumers were trading down. But TNS data for 2009 shows them making no further progress. In the difficult times we expect for 2010 and 2011, they should again gain market share - but will they retain it?


VALUE?
According to Mintel’s consumer research almost everyone agrees that these outlets offer good value, but consumers are evenly divided on whether they represent better value than the entry level ranges in the supermarkets. There’s a significant minority (40 per cent) that thinks it’s worth paying more for a pleasant shopping experience, but that still leaves 60 per cent of consumers as possible customers.

So far so good, but why don’t they attract more customers? The answer lies in other questions asked. Whenever one asks people what they want from a store, two things always come out on top - competitive prices and convenience. For this latest report, 92 per cent of people said the store must be well stocked and 86 per cent said it must be convenient. The hard discounters fall down on both counts. They have just 1,000 lines, compared with 30,000 plus in a typical superstore. And shoppers at a hard discounter cannot buy their full weekly shop there, they need to go to the superstore as well.

In Northern Ireland and other regions in the UK, unlike Germany, there isn’t the willingness to devote the time and effort to visiting two different stores. People may do so in hard times in the interests of saving money, but it’s likely that when we come to the recovery, most will quickly revert to the convenience of doing all their shop in one go. It’s true that people like to shop around for bargains and some will seek out the discounter brands that represent best value. But the hard discount format is suited to consumers in recession and not to consumers seeking to improve their standard of living in a recovery.

AND SYMBOL VERSUS EXPRESS?
Too many small newsagents think they can revive their fortunes by just introducing a few groceries. But it isn’t as simple as that. The small convenience store has to provide compelling reasons for any customer not to get into the car and drive to the nearest superstore.

Location is their biggest advantage and they can capitalise on that with friendly service and long opening hours. They also have to raise their game - smart stores, fresh food, even a bake-off oven and fresh coffee all provide a strong reason to visit the stores. Small stores have to make the most of the opportunities available.

Consumer expectations of convenience stores are being raised by newcomers – Simply Food, Tesco Express. They have brought the standards, ranges and pricing of superstores to neighbourhood retailing and that’s a change that cannot be reversed. For too long, convenience stores worked on the assumption that what superstores did wasn’t very relevant. There have been groups that have responded and have been very successful, bringing a fresh new era of convenience retailing to the province– Spar, Centra, Supervalu are the obvious ones – but the entry of the newcomers has accelerated change.

Current initiatives by the established players include:

• better-constructed own-label ranges on a Good-Better-Best basis
• more emphasis on product innovation
• developing formats to help ever-smaller stores
• greater emphasis on logistics and technology, in particular the introduction of EPOS systems.

Retailing is free market economics in practice. Consumers choose to shop at the stores that best serve their needs. Shops that don’t meet those needs fail. Shops that fall short in some ways begin to lose customers; witness Asda in the 1980s and Sainsbury’s in the 1990s.

The convenience store should be so much more than just a shop for top-up groceries. It should be a source of immediate meal solutions and in the longer term we expect to see the distinctions between convenience stores and fast food outlets becoming ever more blurred.

There are two types of convenience store – those in high footfall areas, catering for lunchtime and take-home evening trade, and those in smaller neighbourhood centres where footfall is much lower.

While some convenience stores cannot beat the multiples at their own game, there is ample room for them to build on the values and attributes with which the local shop has long been associated, and which a global brand, by its very nature, cannot provide: that is personal interaction with customers, closeness to the community, and a more emotional connection. In an era marked by uncertainty and change, loyalty itself is under constant review.

HOW HAS MUSGRAVE RETAIL PARTNERS BEEN PERFORMING IN NORTHERN IRELAND IN THE CONTEXT OF THE CURRENT ECONOMIC DOWNTURN?
Overall we had a strong 2009 with the business performing significantly ahead of target. Whilst each of our three brands – SuperValu, Centra and Mace - recorded good like-for-like sales increases on the previous year, Centra’s year-on-year performance of +7 per cent like-for-likes is of particular note, being well ahead of all known market comparators.

Like pretty much all retail businesses, the recession is bringing significant challenge to us in Musgrave and to our retail partners.

With ‘value’ being even more to the forefront of shoppers’ minds, it’s essential that the retail pricing structures we support remain competitive and that promotions are both sharpened and communicated even more strongly. The collective direct buying power of the Musgrave Group is a key enabler for us to maintain our targeted ‘best in class’ positioning. Historically, we believe our brands to have consistently offered the most competitive pricing and margin combination in the independent sector – and our point of competitive advantage on retail price positioning is being further reinforced, with the ‘sharpening’ of our value offer implemented through last year and continuing into 2010.

Musgrave also invested substantially in the margin element of our model in 2009. Through our ongoing benchmarking, we recognised that our retail partners needed additional support in the current economic climate, and we therefore implemented substantial enhancements to our retailer rebates as well as a number of additional cash flow supports. All in all, these enhancements are worth in excess of an additional £1m to our retail partners in a full year, and were delivered through Musgrave reducing our margins in a considered and structured manner.

This partnership led approach clearly differentiates us from our competitors, with, for example, one of the larger local wholesalers having effectively increased prices/ reduced terms over the same period. Clearly a different definition of partnership to the one which we espouse!

WHAT HAS BEEN YOUR STRATEGY TO ENSURE CONTINUED GROWTH WITHIN THESE CURRENT CONFINES?
We have had two key drivers to delivering growth through the current recession – developing our offer by listening to consumers and supporting our retail partners financially and in delivering the offer.

We continue to invest in consumer research, as we believe having good insight into what consumers are looking for, and their changing needs, is essential for us to effectively position and adapt our offer to reflect changing economic circumstances.

At a top level, for example, these insights have shown that shoppers are more enlightened and ‘savvy’ than ever before, are prepared to ‘hunt out’ value and, if necessary, spread their spend across a greater number of stores to save money. They are also looking for clear and simplified messaging around price and promotions. In Musgrave, we have responded to these specific insights by sharpening our promotional offer, simplifying the pricing mechanics and how they are communicated and introducing new and more effective POS solutions.

In terms of supporting our retail partners, as well as the financial supports I’ve referred to already, we’ve had a particular focus on working with our retail partners to reduce retail costs through a series of initiatives and affinity schemes across just about all elements of the retail cost base. This work, which is particularly timely in the current environment, has included the development and introduction of innovative and value-adding new management tools in the key areas of payroll and shrinkage management.

LOOKING IN PARTICULAR AT THE INTEGRATION OF MACE WITHIN YOUR EXISTING STRUCTURES, HOW HAS THAT GONE?
The full integration of Mace into the Musgrave business was a key business priority for us in 2009. We have now moved all of the Mace warehousing and distribution – encompassing ambient, chill and frozen – from the old J&J Haslett site in Derriaghy to our facility in Belfast Harbour Estate.

Logistics integration was supported by our £1.65 million investment in a new state of the art frozen facility which is now fully operational for our SuperValu, Centra and Mace partners.

All of the transferring J&J Haslett staff have now moved across to our support office in Belfast Harbour Estate, with the Derriaghy office and warehouse complex due to be fully decommissioned by the end of January.

We also continued our work on the development and modernisation of the Mace brand with the new look Mace now implemented in 25 stores, with a further 30 scheduled this year. In this regard, we have been delighted by the response to the brand development work – both from existing Mace retailers and the wider market.

Our overall transformation plan for Mace is now well advanced – in 2009 we had, by necessity, a significantly inward focus on physically moving and integrating the logistics and support structures of the Mace operation. Having now completed this essential foundation work, we are now able to more fully concentrate on developing the Mace commercial offer and retailer supports and this will be a key priority for us in 2010.

Mace has a strong future within our portfolio of brands, and we see significant upside in terms of store numbers and sales, as we progress the ‘new Mace’ and bring it to bear on the market.

DOES YOUR RESEARCH SHOW THAT CONSUMERS WILL FAVOUR ONE SYMBOL BRAND OVER ANOTHER, OR IS IT JUST A CASE OF NEAREST IS BEST?
Location and convenience is clearly a key driver of consumer behaviour, particularly in our sector. However today’s shopper is willing to travel further, if necessary, to seek out a good standard of offer - whether that be price, range, service or hygiene, or anything else which is important to them. So it certainly isn’t a case of ‘nearest is best’ – if ‘nearest’ doesn’t deliver high standards in all aspects of the offer which are important to the shopper, then they’re more than willing to go further afield.

All good brands have equity in that they add value to a business and differentiate it from they’re competitive set. Over a number of years Musgrave has adopted a holistic approach to brand development and management by focusing on the four key quadrants of store environment, products and services, communications and staff behaviours.

We have made significant progress in building equity in, and consumer loyalty to, our brands through this approach; albeit I would be the first to recognise that we still have some way of go, particularly in terms of consistency.

DO YOU BELIEVE THAT THE INDEPENDENT RETAIL SECTOR IN GENERAL HAS BEEN AFFECTED BY ECONOMIC CIRCUMSTANCE AND DO YOU FEEL THAT IT HAS RESPONDED WELL TO THE CHALLENGE LOCALLY?
The independent retail sector has certainly not been immune from the pressures of recession. Overall, I think the sector has responded well to these pressures – with the leading players in the market adopting a strong leadership position and adapting their offer to meet the new economic circumstances. We certainly have a strong independent sector in Northern Ireland – one which is supported by several professional wholesalers and which encompasses a large number of ‘good to exceptional’ independent retailers.

WHAT WERE THE KEY ISSUES FACING MUSGRAVE RETAIL PARTNERS IN 2009 AND HOW DID YOU DEAL WITH THEM?
The key challenge we faced as a business over the past year was balancing the heavy Mace integration workload with the ‘business as usual’ agenda which including adapting our model, developing our brands and supporting our retailers through the challenges of the current economic environment.

Overall I’m satisfied – both with our progress and business performance over the past year – and am looking forward, with enthusiasm and confidence, to the year ahead. We have a number of substantial plans and strategic initiatives which, when implemented, will, I believe, reinforce our position as the partner of choice for progressive independent retailers in the Northern Ireland market.

WHAT WILL BE THE KEY PRIORITIES IN THE NEW YEAR FOR THE CONVENIENCE RETAIL SECTOR GENERALLY, AND MUSGRAVE RETAIL PARTNERS NI SPECIFICALLY?
The key priority for the overall sector is to ensure the offer is contemporary and competitive and that it is delivered effectively and consistently to the end consumer.

In Musgrave, our focus in Northern Ireland, as it is across the wider Group, is about positioning ourselves to emerge stronger from the recession. We are focusing on our ways of working – by looking at how we can operate more simply and efficiently – internally as well as with our retail partners and suppliers. We are working on a number of strategic initiatives under this umbrella – all of which are designed to enable us to improve pricing competitiveness and/ or margins, by more closely aligning the needs of our retail partners with those of our suppliers, and by improving and simplifying our processes and thereby reducing costs.

ARE YOU CONCERNED BY THE CONTINUED EFFORTS OF THE MULTIPLES TO INCREASE THEIR SHARE OF THE CONVENIENCE MARKET AND HOW WILL YOU BE SECURING THE FUTURE OF MUSGRAVE IN THAT REGARD?
We already operate in a very crowded market place – in simple terms, too many shops chasing too few consumers. In this context, the potential for more multiple stores is of course concerning.

However our focus has to be on our own offer and on ensuring it remains both different and better in the convenient supermarket/ convenience store sectors. The retail partnership model which is at the heart of our business, has coupled the commitment, ingenuity and local knowledge of our retail partners, with the scale, experience, innovation and systems of Musgrave. It is an extremely potent offering and has a number of key differentiating factors and advantages versus any multiple offering.

From the perspective of the wider sector, whilst we shouldn’t be complacent in the context of the scale and expertise which the multiples can leverage, we should be optimistic, providing we remain wedded to an agenda of continuous improvement – something which Musgrave has been and will remain committed to.

AND WHAT WOULD YOUR MESSAGE BE TO YOUR RETAILERS AT THIS TIME?
The Musgrave business model is sound and proven. Musgrave has been in existence for over 130 years as a family business, and has the scale and experience to whether tough times, and to emerge stronger at the end of the recession.

We are creating a platform for sustainable growth for Musgrave and our retail partners in SuperValu, Centra, and Mace, and have clear strategies in place to drive price competitiveness, margins and returns over the medium to longer term.

WHAT IS YOUR VISION FOR MUSGRAVE RETAIL PARTNERS IN NI, FIVE YEARS FROM NOW?
Five years from now, I would like to see Musgrave Retail Partners having reinforced our position as the number one supporter of independent retailers in the market, and leading a vibrant, independent retail sector which provides real choice to consumers and underpins a properly balanced food retail market in Northern Ireland.

Our two new categories – Marketing Personality of the Year and Most Outstanding Public Relations Agency – are both designed to increase the opportunities for participation available to marketing professionals who work closely with the retail grocery industry. Have a look at the category listings on the opposite page for more details.

These awards are always a closely contested affair and widely regarded as among the highest accolades a local company can achieve within the industry. As always, they will be assessed by a panel of well-known and expert judges whose industry records are second-to-none.

The awards will be presented at the annual Grocer’s Ball in April, a glittering charity event that is perennially popular across the sector and which offers a night to remember to all those who attend.

The retail grocery sector is particularly challenged at present, such are the straitened economic circumstances in which we find ourselves, and never before has marketing promotion played such a crucial role in ensuring that ongoing viability and success of retailers, wholesalers and suppliers everywhere.
Winning an Ulster Grocer Marketing Award confirms the professionalism and industry awareness of your organisation and makes a clear statement to your peers and customers about the standard of the work you produce. It’s an accolade that is highly regarded and well worth competing for. So don’t delay, register your intention to enter today!

The charity – which is now 150-years-old – currently provides aid to 1,850 beneficiaries and their dependants across the UK, including Northern Ireland. The vast majority of those people who are currently receiving help have served an average of 25 years in some corner of the grocery industry, have no savings at all and are living solely off the state pension.

Each of them receives an annual payment of £778, which amounts to around £15 a week of additional aid. And as Caravan’s director general, Gillian Barker explained recently during an awareness-boosting reception for business leaders at Hillsborough Castle (see opposite page), the assistance that the charity can offer doesn’t stop there:

“The breadth of the support we give may surprise you”, she told the gathering. “In addition to the annual payment, we also supply what we refer to as ‘basic essentials’, which are cookers, fridges, carpets, stair-lifts and beds to those who don’t have the wherewithal to make such purchases.

“We also send birthday cards to each beneficiary. One Northern Ireland beneficiary who we have looked after for 20 years, sent us a letter recently thanking us for her Caravan card. She told us that it was the first birthday card that she had received since her parents died 30 years before!”

The work that Caravan does is made possible by the efforts of a series of branch committees, the members of which give their time voluntarily to organise fundraising events and drive local awareness of the charity’s aims. Here in Northern Ireland, the committee, which has been operating since 1991, is led by Tesco’s Northern Irish commercial manager, Cliff Kells.

There are currently 18 people in the province who benefit from Caravan aid – some of them live in very remote areas and one has recently had a telephone line installed and paid for by the charity:

“I know that there are far more potential beneficiaries in Northern Ireland, but we suffer from a lack of awareness”, Gillian Barker told those who attended the event at Hillsborough. “If people don’t know about us, then they will never think to find us.”

Gillian appealed to those at the reception to come forward if they knew of anyone who might be eligible for help from Caravan. And she asked them to spread word of the charity and the help it offers among colleagues and friends.

INCOME
All of the income which Caravan receives comes directly from the industry, much of it from fundraising events, such as the annual Grocers’ Ball – a glittering night out for the industry here in Northern Ireland during April which also incorporates the Ulster Grocer Marketing Awards. Last year, the local branch network raised £750,000 towards the work of Caravan and, as Gillian pointed out, they also played a key role in driving awareness of the charity:

“This is crucial if we are to help more former colleagues who have fallen on hard times”, she told her audience. “If workers on your shop and factory floors know of us and our work, chances are that they may know of a former colleague who might need a bit of a helping hand.”
According to Gillian, there has lately been a marked increase in the number of people who are approaching Caravan for help before they reach retirement age. This might be because of ill-health or because they are caring from disabled spouses or children. The outlook for many of these people, she added, can be “very bleak indeed”.

”None of us know what’s in store for us, but I am quite sure that illness and disability do not feature in our plans for the future, and when illness or sudden hardship does strike, we are quite unprepared for how this will change our lives”, she went on. “Fortunately, Caravan has been on hand to help many of our former colleagues through such trying circumstances.”

Speaking to Ulster Grocer after the Hillsborough gathering, Gillian also conceded that the current economic downturn was having some effect on Caravan’s activities:

“It’s affecting us in two ways”, she explained. “Firstly, companies are now looking at their budgets and re-examining their charitable giving. Also, it’s put pressure on the ordinary people out there, so they are looking to charities such as ours for support.”

Gillian revealed that during 2009, Caravan spent £1.8m on welfare provision across the British Isles, and she said that she hoped to be able to invest a similar amount this year.

“I think that the reason we are able to continue with this record level of support is because of the work that’s been done over the last four or five years to keep the awareness of Caravan up. But we have been around for 150 years and lots of people out there have still not heard about us or the work that we do. We are totally behind everything that is being done in Northern Ireland to raise awareness and the more people that get involved, the easier it is for us to spread the word.”

To find out more about the work of Caravan, visit www.caravan-charity.org.uk

Doing business in 2009 was extremely challenging in the aftermath of the dioxin scare in the Republic of Ireland and the spill over into Northern Ireland and this exerted a tremendous economic pressure on consumer confidence when it came to the workings of the supply-chain.

The onset of H1N1 virus in Northern Ireland in September and the health coverage throughout the World was not unexpected, but yet another reminder that the industry should keep up its guard and its high biosecurity and welfare measures here in Northern Ireland.

Producers also faced high feed input costs, while processors faced a shortage of pig supply throughout the UK. This meant a firming up of pig prices in 2009 against a backdrop of tough market and trading conditions.

The local pork industry built up to its most intensive promotional period of the year from October through to Christmas. The Forum promoted National Sausage and Pork Weeks, the National Sausage Competition and the Northern Ireland Pork Celebrations road shows in more than 700 stores from ASDA, M&S, Tesco, Sainsbury’s, Supervalu to local Spar and EuroSpar franchises. This consisted of everything from cookery demonstrations to tasting and sampling new products. These will continue through 2010 and it was clear that local consumers want the choice of local pork and pork products. This followed several months of activities to support Northern Ireland’s supply chains.

Ensuring consumers are fully aware of the provenance of pork and bacon products on sale throughout the province is a key focus of the Ulster Pork and bacon Forum in its ongoing celebration of the Northern Ireland Pork and Bacon marketing campaign which runs throughout 2010.

BEATEN
The year ended with an upbeat Christmas period, but the dioxin repercussions of last Christmas were never far away from anyone’s mind.
The Forum worked closely with DARD, DETI, Invest NI and DHSPSS on issues from private storage aid to the aftermath of the dioxin crisis to H1N1 Virus and pulling together a code of practice for the industry (producers and processors) and its front-line staff to combat the effects of the virus.

Labelling was also a major factor and we continue to work with industry and retailers to deliver for Northern Ireland Pork and Bacon products. We believe that if a code of practice had been in place throughout the supply chain, then the Northern Irish industry would not have suffered the vast losses during the dioxin crisis and the product could have been clearly identified. We continue to work to this end.
We have been actively working with primary industry, retailers and butchers through 2009 to deliver an effective strategy for our industry. We believe that consumers should have a choice and products which are supported by Northern Irish supply chains. A clear labelling policy should be agreed and we will work with our sister agencies throughout the UK to ensure that this happens. Indeed, this was a major focus of our 2009 Annual General Meeting.

Our ongoing marketing campaign is designed to showcase the huge range and versatility of Northern Ireland pork products as a whole, as well as quality, integrity, welfare and nutritional values of local pigmeat.

Northern Irish pig producers and processors take immense pride in their produce, they know its quality is exceptional and that consumers can have total trust in it.

That really is the key issue – buying local is an assurance of buying the best. There is considerable misconception in the market about what is ‘local’ and that’s what we are trying to redress. There are a lot of brand names and producers on the market that people think are local but they are not.

The only pork and pork products that consumers can be assured are genuinely Northern Irish and reared and processed to the highest health and welfare standards are those from the Ulster Pork & Bacon Forum producer and processor members.

Our aim is to ensure that consumers are aware of this and that retailers give genuinely 100 per cent local pork products the space and active promotion they so deserve on-shelf.

We are continuing to invest in the province by refitting and rebranding our stores to deliver the best in modern retailing and customer service to our customers. In 2009, almost £1m was invested in Northern Ireland in rebranding and upgrading five existing stores – Finaghy, Sydenham and Shankill in Belfast, Whitewell Road in Newtownabbey and Bushmills. Following the pattern of stores refitted in 2008, these branches are showing significant sales growth post-launch.

Business acquisitions and development remain a key objective and we are constantly searching for opportunities to increase the number of stores in our portfolio and grow our market share. In 2009, we acquired the former Costcutter store and Post Office in the village of Ballynure and invested £300,000 refitting it to our latest convenience store format.

The refurbishment of stores in 2009 brings total investment in Northern Ireland over the past two years to £4.5m.

In February, we completed our £1.56bn acquisition of the Somerfield supermarket chain, making The Co-operative Group the fifth largest food retailer in the UK with more than 3,000 outlets. While there are no Somerfield supermarkets in Northern Ireland, the acquisition and integration of Somerfield into The Co-operative Group is already bringing benefits to our Northern Irish customers. Our greater buying power is bringing lower prices to our customers and shoppers are also benefiting from improved promotional offers.

AWARDS
Other successes in 2009 have included garnering a raft of awards in recognition of our commitment to responsible retailing, our ethical trading policies and our quality ranges.

The Belsize Road store in Lisburn scooped the Best Meat Counter in the annual SuperMeat awards, beating large Asda, Tesco and Sainsbury’s supermarkets across the UK. It was the smallest ever store entered during the ten years of the awards. The Group also won the title of Meat and Fish Retailer of the Year.

In addition, we topped the Marine Conservation Society’s (MCS) league table of supermarkets for supporting and selling sustainably-sourced fish, which endorsed our earlier Grocer Gold Award for Own-Label Range of the Year for our responsibly-sourced fish. The National Convenience Chain of the Year title, the RSPCA’s People’s Choice Award and awards for our Fairtrade wines were also among the triumphs of 2009.

Last year was challenging for many businesses, and indeed consumers, struggling to survive through the recession. But as our annual results showed, more people are shopping locally and more regularly and our food stores which operate at the heart of many communities, continue to thrive.

However, to help our customers, we have had some fantastic in-store promotions which have proved very popular and in November, we announced wide-ranging Christmas price cuts and a promotional package worth over £200m in savings to our customers. This included a first-ever triple Dividend, equivalent to a 6p-in-the-pound saving for shoppers.

In 2009, we paid our customer members in Northern Ireland £580,000 through the Share of Profits scheme and a further £23,300 to the Community Fund which helps good causes across the province.

We have also put much emphasis on cutting waste, particularly relevant during this economic climate, and have been working closely with WRAP to ensure less food, products and packaging end up as household waste.

To help our customers cut waste and ultimately, cut their food bills, in June, we announced we would be the first retailer in the UK to include storage instructions for fruit and vegetables in fresh produce bags. We have also switched the emphasis, particularly on perishable goods, from BOGOFs to half-price offers.

Even during these tough financial times, our staff and customers across the UK have demonstrated an unbelievable amount of generosity and helped us to raise the staggering amount of more than £3m for our charity of the year, the RNID.

We enter into the year ahead with ambition and excitement and look forward to the challenges and opportunities 2010 will bring.

As predicted by many of our foremost leading economists and forecasters, 2009 proved to be an extremely testing year for those operating in the retail sector – both here in Northern Ireland and further afield. However, one of the most interesting things about the year just gone is the fact that it wasn’t just the independent retail sector which was under threat, but also the multiples and national chains. The past year has proved to be a most challenging one for retailers operating at all levels and in multifarious retail formats.

It’s clear that everyone understands and accepts that the economic downturn was a global problem and not one peculiar just to Northern Irish retailers. However, few had predicted that it would be quite as difficult, lengthy or protracted as turned out to be the case. From a general perspective, few would have predicted the demise of many of our well-known retail names, for example Woolworths and Zavvi in the wider retail arena. Unfortunately, this is far from the end. Others, sadly, are set to follow and as 2010 unfolds, we will see other casualties ‘go to the wall’.

Independent retailers often receive very unfair press and are often, mistakenly, perceived to be constantly whining and moaning about their circumstances. This, I believe, is extremely unfortunate and indeed, extremely unfair. Those who have managed to weather the storm in the independent sector have managed to do so through clever, dedicated management, excellent resource utilisation, clever procurement policies and sheer hard work – and they are to be congratulated on their successes in 2009, especially given the current economic climate.
It would, however, be totally inaccurate to suggest that they didn’t find the economic situation draining in the extreme. Those far-sighted enough to realise that times were going to be tough followed the lead of the multiples and, for example, introduced more non-food product lines to their retail offering. This is one of many trends which I predict will help them to continue to grow, expand and strengthen their retail operations in 2010 and beyond. In many respects, the far-sighted independent retailer has greater flexibility than the multiples and can rapidly effect changes which would take months to implement at national/multiple chain level.

But the multiples too had to face up to the fact that the recession-conscious consumer was changing from being time-poor, cash-rich to almost totally price-focused and price-oriented, which formerly had not been the case. Price has often been regarded by retailers as being a very blunt instrument - not so, when trading or shopping in recessionary times. Therefore, the multiples had to sharpen up their retail operations and retail offerings. Many of them did this through trimming the number of product lines they made available to customers and through pruning jobs – both in-store and at head office. Further cuts cannot be ruled out during 2010.

The consumer has changed irrevocably and, even after the recession is well and truly over, shopping patterns, trends and behaviour will be slow to change. Consumers have realised that there are quality retail offers available at bargain prices and are actively seeking out these quality products at premium prices. They have learned also that they can ‘make do’ with less and many are considering this as a valid lifestyle choice or option. Profligacy is out; frugality is in – and it’s in to stay – at least for the foreseeable future.

TRENDS
Retailing has always been a tough game and 2009 has been particularly difficult. During recessionary times, three main (or principal) trends generally emerge.

These are:
1) Weak retailers flounder and fail and have then to face up to the fact that they are no longer viable trading entities;
2) The clever and more strategic retailers ‘trim’ their retail operations and staffing levels and squeeze their suppliers tighter for better margins with the result that they often (though not always) emerge from the recession as better (or, at any rate, leaner) retailers in the long term; and
Just as recession can inspire great poetry, art or music, it can also – eventually – inspire new retail formats and offerings which help to fill the gaps left by those in category (1). We still await their arrival to help fill the ‘black holes’ in many of our town centres left by those who have had to exit the market.
The recession may have bottomed out but there’s absolutely no reason to be popping the champagne corks – at least not quite yet. However, the three-stage model outlined above has already started to pan out and will continue to unravel and unfold as we move through 2010 and beyond.
Planning is still a nasty word to the ears of some people – and no wonder. I believe that the Planning Service in Northern Ireland needs to take cognisance of the fact that we have (several years ago) reached superstore saturation point. Our population is not growing commensurate with the number of proposed supermarkets for this geographic region.

I firmly believe that it’s time to sit up and recognise that we don’t need any more supermarkets – particularly in the areas for which they are being proposed. Perhaps there is room for some (albeit limited) development in the west of the province but certainly, most of our principal market towns and centres of retail excellence are more than well-served. It is interesting, however, to note that the multiples are not particularly keen to develop store operations out to the west – the chimney pots simply don’t add up – not enough profit to send back to London!

It smacks of little more than sheer avarice and greed on behalf of the multiples that they plan to foist more supermarket shopping opportunities upon communities which are already more than well-served. It is of paramount importance that this is fully recognised and understood and that we do not see any more planning permission granted for these massive out-of-town shopping developments in areas which are already saturated and beginning to look like clone towns.

CHANGE
I hate to trot out the old chestnut that the only constant in retailing is change but – unfortunately – that is the case and it will continue to be the case well into 2010 and beyond. We are living at the beginning of the 21st century, as 21st century consumers operating in a contemporary 21st century world and we continue to demand the best retailing there is available. There is, I purport, no good reason why consumers here in Northern Ireland should be treated any differently from the consumer cognoscenti in other parts of the world.
It is, of course, important to welcome and embrace change – but (a word of warning here) only change which is going to enhance the already vibrant retail culture which is presently in existence. We must be careful not to distort or upset the balance between town centre and out-of-town retail development opportunities and we must not allow the multiples to cannibalise their own markets or to further infiltrate and decimate our struggling (albeit courageously) independent sector.

Northern Ireland’s retailers face another challenging year in 2010 and they must face it with hope and courage. In order to do so, they must be assured that those in power and those who exercise control over our built and commercial environments do not permit further developments which will operate to the detriment of what is already working for us here in this geographic region.

The wise, or prudent, retailer – whether an independent or a multiple operator – will be preparing cautiously for 2010. We are far from over the worst. There are still retailers who face the daily and almost constant threat of closure; there are those who will have to lay off staff (both part-time and full-time) and, there are more casualties to come.

While it’s not all doom and gloom and while we must do our best to remain optimistic about the future, it would be foolhardy to claim (as some ‘experts’ suggest) that we’re almost out of the woods. Yes, there’s some light at the end of the tunnel but it’s only a glimmer from a dim torch; it’s most certainly far from being a star in the East!

At a time when Northern Ireland is facing unprecedented economic challenges, I believe our food and drink industry has the potential to drive tourism and ultimately, provide economic benefits across the region as a whole.

Northern Ireland’s wealth of natural food resources, together with our stunning scenery and strong agricultural system is a winning combination, which we must make the most of. The most recent Northern Ireland Passenger Survey indicates that of the £540m spent by overseas and domestic tourists, 33 per cent of this was spent on food and drink, which equates to £178.2m.

The income generated by food and drink was even higher than that for accommodation. This shows the importance of food and drink to the visitor, and the local economy.

Our local produce, such as cheese from Fivemiletown Creamery, Finnebrogue sausages from County Down, our famous Bushmills Whiskey and Dulse from Ballycastle, provide a unique offering to visitors and sets Northern Ireland apart from the competition.

The quality of our food has been recognised by the UK Guild of Fine Food and I recently had the pleasure of attending a reception organised by Invest Northern Ireland where 27 local companies won a total of 56 gold stars in the Great Taste Awards.

The Great Taste Awards are a measure of the quality of innovation within the food industry, especially within the small business sector. Winning a Great Taste Award is testament to the consistently high standards our companies are achieving and sustaining, many in markets outside Northern Ireland.

The statistics of our engagement in the UK Great Taste Awards indicate that smaller companies in particular are increasingly recognising the importance of innovation and new product development. Food is probably the fastest moving and most challenging market, shaped by a number of factors from the changing demands of consumers to environmental concerns.

FOOD
The importance of food to the local economy is seen in the statistics which show that 34 per cent of all manufacturing sales in Northern Ireland derive from the food, drink and tobacco sector. Speciality food, the focus of the Great Taste Awards, is an important and growing segment within the overall grocery market, with sales in the UK worth £3.6bn in 2006.

Invest Northern Ireland recognises the contribution of the food industry to the health of the local economy and has taken significant steps to increase its practical support to companies across a broad range of areas including marketing, new product development and design.

Food and drink processing is now our biggest manufacturing industry and one increasingly winning business in markets outside Northern Ireland. Our companies, both large and small, are now competing and winning because of the quality, wholesomeness and originality of their products and the strength of their commitment to excellent customer services.

No wonder then that so many of the multi-nationals are keen to give Northern Ireland produce a ‘shop window’.
Today Northern Ireland is among the biggest suppliers of food and drink to Great Britain and the Republic of Ireland.

I know that Invest NI’s food division works closely with local buying teams to create new opportunities and I very much welcome the recent decision by ASDA to give this buying team responsibility for Scotland as well.

This gives NI companies an unparalleled opportunity to expand outside these shores using ASDA’s Bangor base, from where products worth more than £600m are sold to markets in the United Kingdom.

Increasingly, food and drink companies have become the dynamo driving our manufacturing sector. Significantly, the local food and drink industry sector here, in the middle of a global recession, increased output by almost nine per cent in 2008. In Great Britain, the industry experienced a decrease of 3.3 per cent.

The industry’s importance to the local economy is also seen in the number of people it employs - some 19,220 jobs in the sector at December 2008, an increase of 2.9 per cent over the year. Indeed, food and drink processing now provides 23 per cent of total manufacturing employment in Northern Ireland.

Food and drink companies, furthermore, are focusing increasingly on novel products that offer customers new taste experiences. It’s now a dynamic and customer-led industry.

Equally encouraging is the focus on innovative products and new brands.

Northern Ireland has much to be proud of in terms of its food and drink industry, and I have great cause for hope in the future potential of the entire sector.

With independent newsagents operating in a marketplace that becomes ever more challenging and less predictable as each day passes, it’s not surprising that the past 12 months have been some of the busiest on record for the National Federation of Retail Newsagents in Northern Ireland.

Through our field team, which comprises operations manager Margaret McCloskey, retail development manager Jackie Fox and meetings co-ordinator, Leo Mullen we have continued to provide all the practical, on-the-ground support and help that our members require to develop their businesses, and with 670 members, our staff were certainly kept busy making more than 1000 shop visits and a further 70 recruitment calls. But their efforts have paid off and we have been delighted to welcome 45 new members into the fold in the last year.
Margaret and her team are always on hand to help resolve any problems or queries that members may have, ably assisted by the Northern Ireland district council executives and, of course, the NFRN’s own helpline.

It has also proved to be a busy year for members of our new Accreditation Scheme which is currently being piloted in Northern Ireland.
Since its launch at the beginning of last year, 36 members have been participating in monthly product promotions through delivered wholesaler Palmer & Harvey as well as taking part in specially negotiated exclusive promotions with publications such as the Daily Mail, Daily Mirror, Ulster Tatler, Auto Trader and Tractor.

Among the most successful of these initiatives has been a free seeds promotion with the Daily Mirror with the accreditation scheme symbol receiving prominent positioning on the front page of the Mirror while a whole page inside the paper featured the NFRN and listed, with name and address, participating member stores.

Meanwhile, the most recent promotion with Auto Trader saw exclusive free gifts given away with three issues of the magazine and copy sales increasing by 13 per cent, 23 per cent and 17 per cent respectively for the three issues promoted. I’m extremely happy with such excellent uplifts in sales and would like to thank everyone – members, suppliers and publishers – for their hard work and support.
But not only have Accreditation retailers reported strong sales, we have had approaches from members and non-members interested in joining the scheme and the NFRN as a result.

PRIORITY
We operate in a world where trade issues and legislation can and do have an enormous impact on our businesses, so lobbying at trade and government level has been and will continue to be a major priority.

With ever-increasing red tape and employment legislation, the legal and parliamentary team has cranked up its activities, meeting key representatives from all the main political parties to tell them face-to-face about all the issues affecting independent newsagents and convenience store operators. Concerns were raised about energy prices, water rates, the tax on plastic carrier bags, the introduction of ID cards, the tobacco display ban and the increase in sales of smuggled tobacco. We also raised concerns on crime and the personal safety of members and their staff and asked for their support.

Such contact is crucial as it can have an impact on policy as well as raising the profile of the NFRN among those who have the power to help or hinder our businesses. And in this current economic climate, we’re experiencing some of our toughest challenges yet.

It’s been heartening to hear these people confirm their support for our sector and promise to keep the concerns of the NFRN at the forefront of their minds. Hopefully we shall see this come to fruition with the small business rates relief passing through the assembly in coming months and in place before April 2010.

However, our work will not end there – we shall continue to build on these constructive relationships and will continue to lobby on the issues of concern to us.

CHANGEOVER
On the news and magazines front, we have continued to meet with our main wholesalers on a regular basis during 2009, with the particular aim of ensuring a smooth changeover from WNS to Newspread. Regular dialogue and meetings took place with senior wholesale management to ensure retailers understood the new system for return dockets and credits. Thankfully, our hard work paid off and we reached a satisfactory solution.

We also meet regularly with EM News to ensure that any problems that our members experience are addressed and have on going discussions with Independent News Media, publishers of the Belfast Telegraph, in our bid to drive HND sales for our members.

So all in all, it really has been a busy 12 months and I believe that 2010 will continue to be a challenge for our members. However, with our excellent executive, field staff, council members and Helpline employees, I am confident that we can help you meet these challenges and not just survive but thrive. Remember, the NFRN is your trade association – we represent you every day, 365 days of the year so make sure you use us.

TS Foods, based in the market town of Castlewellan, is a well-kept local secret – it’s an industrious and efficient indigenous concern producing a strong portfolio of staple family foods from scratch at its purpose-built facility on Mary Street.

The company, which was founded in the same location more than three decades ago, has enjoyed double-digit growth over the last two years despite the harsh realities of the current economic downturn. And while commercial director, Joanne Molloy concedes that such performance is a little out-of-keeping with trends in the retail markets generally, she says it’s a little more typical of the situation in the food sector:

“In fact, if we look back over the last 30 years, we’ve actually done particularly well during downturns because our products are well-suited”, adds Joanne “They’re well priced, back-to-basics food and extremely popular with families who are watching what they spend.”

That product range will be familiar to many. The firm supplies its range through the big multiples across Northern Ireland and to the various symbol outlets run by the Henderson and Musgrave Groups. In the south, its customers include the Superquinn and Aldi chains and in Great Britain, its products are on the shelves at Morrisons and Asda.

TS Foods is the name behind the popular Tony’s Chippy brand – a practical range of battered sausages, pasties and burgers which is currently supplied to, among others, Tesco and Sainsbury in Northern Ireland and Asda and Morrison’s in Great Britain.

But where the firm has really made a name for itself is in the production of a varied range of quality stuffing products. It’s the leading manufacturer of stuffing in Northern Ireland and its entire range has just been rebranded under the supervision of newly-appointed product development manager, Brenda Kelleghan, who comes to TS Foods with a successful track record in food product development, most recently with Green Isle.

Between the end of October and Christmas just gone, the firm saw a 250 per cent increase in the stuffing products sent out to customers from its Castlewellan plant. It’s a huge increase in volume and while many would struggle to accommodate that seasonal lift, the Co. Down producer is well experienced and is able to cope with demand, making it a popular option among retailers.

FOUNDERS
Joanne and her brother David Steele, operations director, are responsible for the daily operation of TS Foods. It was their parents, Tony and Ann Steele, who founded the business in 1978 and who are still active there today , Tony as chairman and Ann as head of new product development.

Neither David nor Joanne was initially involved in the family business – David is a design engineer and Joanne is a Chartered accountant and both have led varied careers outside the food manufacturing sector. A couple of years ago, however, both of them felt that it was time for a change:

“We were both ready to do something different, we’d already decided that we wanted to run our own business and we were actually looking for a business to buy or set up at the time”, recalls Joanne. “A few things were happening here at the time, mum and dad were looking to take a reduced role in the business and offered us the opportunity to take over”.

“Since then, we’ve been putting a lot of our time into getting to know the business, our customers and the sector in which we operate. We have also spent a great deal of time building up an understanding of the brand and what consumers want”, adds Joanne
There are 45 full and part-time staff at the Castlewellan plant, which has had to grow substantially over the last three decades to accommodate production demands and technological advancement – as David explains it, they’ve progressively had to buy the back gardens of 14 of their near neighbours!

But the unique ethos of a family-run business is evident in the way in which David and Joanne talk about their staff, some of whom have been there for more than 25 years:

“There’s certainly a great sense of loyalty”, says David. “We have a lot of long-standing members of staff here and they have valuable experience which makes all the difference when it comes down to ensuring the quality of the product is consistently high.”

POSITIVE
Going forward, David and Joanne agree that they are keen for TS Foods to continue in the same “positive vein” that’s it been enjoying of late:
“We want to grow with our existing customers and we want to find more in the various markets that we’re in, particularly the Republic of Ireland [where sales have fallen in recent years] and in Great Britain”, Joanne add. “We’re currently looking to recruit a business development manager for the south of Ireland and we’re also planning to add a procurement and stock control manager here [in Castlewellan], so the strategy for the company is clearly one of growth.”

The company’s participation in the Tesco Taste Northern Ireland event at Custom House Square in Belfast in September is indicative of that expansive mindset – more than 5000 samples of TS Foods product portfolio were handed out to the public during the two-day event.
“We came away with such a buzz and lots of very positive feedback from the people we spoke to”, recalls Joanne. “That was really our first direct personal contact with customers and I think we’d like to do more focus groups with consumers and increase our contact with them generally in the future.”

Agreeing, David adds:
“There’s a very vibrant retail market out there, people are becoming much more interested in food, they’re no longer willing to accept the first thing that they see and there seems to be a strong emphasis now on cooking food from scratch, which is where a lot of our products score well – the growth in our stuffing range, for example, is a direct result of that as people look to compliment the protein and add flavour to their traditional Sunday roast dinner.”

For the future, says David, the emphasis will remain on quality and on ensuring the reliability of the TS Foods and Tony’s Chippy brands:
“We’ve been here for more than 30 years and through that time, we’ve always maintained our reputation for quality”, he adds. “If it’s not right, then it won’t be leaving here, it’s as simple as that. We have a simple motto in this business, shared by all of the family, that we’ll never produce a product that we wouldn’t be happy to eat ourselves.”.

It’s always useful to have the edge – essential, perhaps, in times of economic hardship. And those who inhabit the relentlessly competitive world of convenience retailing here know well that differentiating your offering from those of rival operators will eventually spell the difference between those brands which prosper and those which feel the sting of the cash-strapped consumers’ disfavour.

It’s a simple truth, but it’s been the guiding principal sitting at the heart of daily operations in Northern Ireland’s leading symbol retailer and wholesale supplier for four generations. For the Mallusk-based Henderson Group – which currently oversees more than 420 stores here under the SPAR, EUROSPAR, VIVO and VIVOXTRA brands - safeguarding consumer confidence is paramount, and it’s worked hard over many years to secure its dominance of this cluttered local market.

That commitment to an ethos of progressive change is readily evident in the level of investment across the group’s extensive portfolio - £14m was spent on maintaining and improving both the company-owned and independent estates in 2009 and a further £20m has been earmarked for the same purpose this year – including ‘knock down/rebuild’ schemes on six existing store sites.

Paddy Doody, sales and marketing director for the group, describes the year just gone as “exceptionally good” for Hendersons. And although he concedes that the trading environment has been “tougher”, there has been tangible progress, including the migration of 17 stores from the Mace brand by Q4 and the signing in September of a five-year, £200m deal to convert convenience stores at 29 Maxol forecourts in the province to Spar outlets. As part of that collaboration, Maxol is also supplying fuel to 13 Henderson-owned service stations which have been branded with Maxol imagery.

Speaking towards the end of December, Doody told Ulster Grocer that he expected to finish the year with growth pegged at around 14 per cent, and all-important like-for-like growth among both company-owned and independent retailers of about 3.4 per cent.
To understand how that has been achieved, it’s important to grasp the essentially holistic nature of the insight upon which the group has based its strategy – this is a family-run, indigenous business, the actions of which do not require the approval of share-holders or the authority of some far-flung central office. Instead, Henderson’s has focused its effort on one-to-one relationships within its own business, building close ties with retailers, suppliers and consumers. And, it’s been free to rely on its own well-informed and perceptive interpretation of market trends within this most complex of retail sectors.

The success of that approach is evident in, for example, the popularity of the new Spar Value range – important household items, economically packaged and available at very low prices – a direct response to current, harsh economic realities. But look too at Henderson’s decision in mid-2008 to revitalise its entire approach to the marketing of fresh produce in-store. The category was seen as a critical indicator of the quality to be found in the rest of the shop and so the whole process by which fruit and veg was sourced, delivered and presented to the consumer was re-assessed – and Healey Martin was recruited from multiple giant Asda to head up the effort for the independent estate.

“It’s been a tremendous success”, reports Paddy Doody. “Fresh fruit and produce sales are up by 18 or 19 per cent in turnover and 11 per cent in volume, which reflects all the hard work that’s been done, from looking at processes at the back door to product location, quality control and procedures generally.”

BOLD
All of this is about gaining that edge over the competitor, but perhaps one of the boldest moves which the group made in 2009 was the appointment of Nigel Gray as its new retail director with responsibility for the company-owned estate.
Gray comes with an unrivalled pedigree, having worked for retail giant Marks and Spencer since 1990, most recently as regional manager for Northern Ireland and the Isle of Man.

He has a wealth of experience, particularly in the fresh produce category, and Paddy Doody admits that when he heard Gray had been appointed to the new post at Hendersons, he felt they’d really “struck it lucky”:
“Quality of product and fresh produce are all key strengths for M&S and areas which we will continue drive forward here at Hendersons”, he says.

Gray himself has been in post since August of last year and speaking to this magazine recently, he said that he’d decided to accept the position with Henderon’s for three personal reasons:
“Primarily, I wanted an opportunity to move up the corporate ladder”, he admits. “But I was also after a role that I thought was going to be a stretch for me and which would have a learning opportunity associated with it – that’s been the case here. Furthermore, I’ve always been honest with myself in that I wanted to have fun in whatever job I am doing, and I’ve certainly been able to do that within Hendersons over the last four or five months here.”

Gray says too, he onlyleftM&S because he was moving to a retailer that was “number one” in its market segment:
“[Henderson’s] in its totality, has been very successful and I’ve come in with my own ideas, background and approach.. I’ve encountered a business that has an aggressive and effective growth plan and I intend to build on that, rather than fundamentally change things at this stage.”

WARM
Gray declares himself “staggered” by the warmth of the welcome he received on his arrival at Mallusk:
“This business is built on strong family values and that’s something I felt very strongly about when I left M&S, where those clear values are also important”, he explains. “I often hear people say that family-run businesses have lots of downsides, but that’s not been my experience here. Without exception [the Agnew family] have all been very supportive of me, keen to talk to me about the business I’ve left and to hear my thoughts taking things forward.”

In fact, Gray says that the emphasis laid on business ethics by the Henderson Group is one of the biggest similarities that he’s noticed between the local company and his previous employer:

“Henderson’s is a business that revolves around its people and the communities in which it trades - M&S is the same”, he remarks. “That’s reflected very much in the importance placed on corporate social responsibility and in making sure that the business is doing right by the people that it employs.”

There are four key ‘building bricks’ in the development strategy which Nigel Gray is proposing. He says that customer impressions will be a key consideration, but he’ll also be concerning himself with the quality of fresh produce sold in stores and with improving the overall shopping experience:

“Like Paddy, I believe that there’s a big opportunity to drive the marketing of fresh produce forward in our stores in partnership with our local producers”, he explains. “You look at the multiples and how they promote their support of local produce and yet it’s not on the same level as the Henderson Group - I would like to make that a better known fact.”

He goes on:
“I’m a firm believer that if you get the environment in your stores right, then people are going to come in and buy the products”, he says. “And buy more than they would otherwise have done.”

Customer service will be another key touch point for the new retail director:
“I think that I can help Henderson’s build on their success by building on customer service and engagement on the sales floor, at the till points and on the forecourts, which are now a significant part of our business.”

And he adds:
“This is an area where we can fundamentally put distance between ourselves and our competition. We’re a convenience retailer at the heart of our community and the people who work for us are a part of those communities. By building a stronger relationship with them and with the customers we serve, then we’re making our intentions clear in a strong and differentiating way.”

Moving into the future, Nigel Gray is keen to see the group build on what’s been achieved so far:
“This business is a very successful one in all the key areas in which it trades, and so it’s not about fundamentally shaking things up, it’s about evolution”, he says. “There is no doubt about it, the future is going to be challenging and we want to make sure that our products and our pricing stay as strong as they have been, and we want to ensure that our proposition remains strong enough to withstand the threat of a very strong competitive marketplace.”

He concedes, however, that there will be challenges, not least the threat of encroachment from the ever-present multiples and the difficulties of planning for growth in a region with a finite, fixed population and a private sector that has been disproportionally impacted upon by the economic downturn and a public sector which undoubtedly will be hit by spending cuts.

That said, Nigel Gray expects the Henderson Group to retain its leading position in the years ahead:
“I want us to be seen as a retailer who invests in its estate and in its people,” he says, “and I want this to be a place where consumers experience something which is different and very positive. The message going forward, I think, is very simple and it’s based on customer engagement. That’s something we just can’t afford to get wrong.”

Angie Middleton, Manager of SuperValu Woodburn said: “Training our staff is key to business success and it is something we take very seriously at in our store. Hygiene in all stores should be at the highest possible standard and receiving this award highlights our commitment to bringing our customers consistently high levels of service and creating a clean and safe environment for them to shop in.”

“I joined Punjana because it is a family-owned tea company that has been blending quality teas since 1896 and has a longstanding tradition of excellence in the sourcing, blending and processing of its products. It remains totally focused on providing consumers with the best possible taste and flavour. This means everyone who buys a distinctively branded Punjana pack can count on the provenance of everything the company produces,” explained Greg. “I was also attracted by the strong family values of quality, care and service that underpin this progressive business.

A PEOPLE BUSINESS

“Punjana is essentially a people business that cares about its employees, customers and suppliers especially those in the tea gardens of Assam and Kenya, which supply all our leaves. We know where the tea leaves come from and we can depend on the growers to supply consistently high quality tea leaves.” Now the market leader in Northern Ireland by volume and value, one of Punjana’s most successful new products is a Fair Trade pack.

“After many years on the payroll of a multinational, it is great to be working with such a widely recognised and respected tea brand that has become a household name in Northern Ireland. In my previous roles I well remember the impact the ‘Pick Punjana Tea’ slogan had on us. It was a simple but powerful television jingle that became instantly recognisable throughout the province.”

MAINTAINING QUALITY AND VALUE

Greg’s role at Punjana’s state-of-the-art tea packing facility in Belfast is to ensure the continuing competitiveness of the company’s teas by increasing productivity, reducing costs, whilst still maintaining the quality and value of its products.

“Our objective is to be the best that we can be in everything we do,” he said. “We have to be better than our competitors. This means continuous downward pressure on costs, especially waste, and focusing on improving all aspects of our business, particularly our interface with customers. I’ve been able to apply some of the experience I’ve gained of production techniques to help Punjana’s overall competitiveness, ensuring that there is no room whatsoever for complacency.

“This is because we are operating in what is an intensely competitive and fast moving marketplace. We are the only mainstream tea company that is based in Northern Ireland. All our competitors in the sector are large mainland-based multinationals which focus less on attention to detail and are less passionate about the end product.”

INVESTMENT IN TECHNOLOGY

Punjana, he pointed out, has also prospered by investing in innovation in production technology, products, packaging and marketing. The tea bag processing and packaging system was designed specifically to requirements laid down by joint managing directors Ross and David Thompson, the third generation of the family that started the business back in 1896.

“The technology is unique, a world first, a remarkable achievement for Northern Ireland. We have the world’s fastest tea bag manufacturing machines. Indeed these specialist machines are bespoke to Punjana and each one produces an amazing 2,500 tea bags every minute - three million in total every day,” said Greg. Indeed, today, the equivalent of 80,000 cups of Punjana tea, are drunk every hour of the day and night, 365 days a year.

“After researching a prototype of Punjana’s new soft foil re-sealable pack, the reaction from consumers in Northern Ireland was so positive that the company was encouraged to embark on a £2.5 million investment project, which resulted in the launch of these new packs onto all supermarket shelves in the province last year.”

PROUD TO BE LOCAL

Ross Thompson, who takes great pride in selecting and blending the teas with cousin David, is very reassured with the daily letters and messages received on the company’s website from first time users, who are delighted with the extra taste and flavour that Punjana delivers. Punjana is certainly a Northern Ireland company and proud to be an independent, local business.

As well as being Northern Ireland’s clear market leader by volume and value, Punjana now sells around 40 per cent of its output outside the region, mostly to the main supermarket chains in Great Britain and the Republic of Ireland.

Punjana is now to be found on the shelves of every supermarket, symbol group and independent grocery business in Northern Ireland and, more recently, has obtained listings in many of the major supermarket multiples in the UK, including Tesco, Sainsbury’s, Asda and Morrisons.

EXPLOITING OPPORTUNITIES

In addition, the company is now building a strong brand presence in Boston and the New England area for its attractively packaged ‘Irish Breakfast Tea’. While continuing to invest significant resources in maintaining its market leadership in Northern Ireland, other opportunities in Great Britain and the US are now being actively exploited successfully by the Punjana team.

“We are tremendously proud of our great heritage. Our teas were blended in the shadow of the great cranes at Harland and Wolff shipyard and enjoyed, for example, by workers on the Titanic, Olympic and Britannic vessels. We’ve found customers to be fascinated by the company’s story and impressed by the provenance of all our teas.

THE PERFECT CUPPA

“We’ve always sought to set Punjana apart in all our markets by focusing on taste. We achieve this by ensuring that our leaves are sourced only from the finest gardens in Assam and Kenya and only from farmers who share our ideals regarding fair trade, health care and education for all who work on their estates,” added Greg.

“Punjana strives to make the perfect every day cup of tea. This can be achieved only by buying superior tea leaves. Tea tasters worldwide invariably agree which tea gardens produce the best tea leaves and therefore sourcing the tea leaves is not the biggest challenge - it is simply that a company must be prepared to pay more money to secure the superior tea leaves.

“We put the best in to get the best out - it’s a simple but effective truth. Whether it’s the best selling Punjana ‘Original Pack’, or one of the company’s new speciality teas, the Thompsons take great pride in every pack that leaves their Belfast factory,” he concluded.

The family bought the site, which then comprised a Costcutter forecourt shop, with adjoining restaurant and off-licence, three years ago and quickly gave the store an initial makeover in the Centra livery. However, from the start, a much bigger project was planned, as Philip Woods explained. “This is a two-acre site, with a huge volume of passing trade and a substantial residential base in the surrounding rural hinterland and we knew that to make the most of the acquisition, we would have to take the bull by the horns and start from scratch with a complete rebuild.

NOT A TYPICAL C-STORE

It took the best part of two years to develop the plans for the site and get them through the planning process, so it wasn’t until the week before Christmas that preparation work on the site redevelopment began. “As the new store has been moved to one end of the site, the builders were able to prepare the ground works and build the new structure while we continued to trade out of the existing store,” said Philip. “We didn’t actually have to close until 7th March in order to remodel the forecourt, build the new restaurant, which is now a separate building, and complete the groundworks, as well as fitting out the new store, but we were open for business again just eight weeks later on 8th May.”

This is definitely not your typical forecourt convenience store – you may know exactly what it is but it looks very different, almost like a Swiss chalet with its metal wood effect cladding on the exterior walls and sweeping arched Kingspan roof which ends with a bullnose curve. On the road side of the building is a clock tower, with three large clock faces facing the different approaches – an unusual and useful feature.

Huge windows at the front and sides let you see into the store – and right through, as the rear wall also has windows at the top. And that is an indicator of one of the biggest differences in Woods’ new Centra – but more of that later!

MODERN AND CONTEMPORARY

“This is what we had envisioned – a top-end convenience store that could cater for both the high levels of passing trade, as well as people living and working in the local area,” said Philip. “Our catchment here is quite different to Tandragee, which is on the edge-of-town much closer to large housing estates and, while on a busy road, there is not the same volume of vehicles, so the store layout had to reflect that, with Dobbin Road more focused at the front on quick in-and-out impulse shoppers, though we cater for all needs, with a product range that can accommodate full basket or even trolley shops.

“With our new shop, it’s design structure and looks, we wanted to give our customers something different, something very modern and contemporary, right of the 21st century that would encourage them to stop and come in,” continued Philip. “We have worked with architect Jim Menelly from Carmen in Coalisland before. Jim is a specialist in convenience stores, fully clued in to the latest trends and developments and he certainly hasn’t disappointed with Centra Dobbin Road.

“Working closely with the store development team at Musgrave Retail Parntners on the latest in Centra imagery and store fit-out, Jim’s design is not only aesthetically very pleasing, but also meeting our requirements for improved energy efficiency.”

CREATING DRAMATIC EFFECT

That brings us back to one of the biggest differences in Centra Dobbin Road to the vast majority of convenience stores and supermarkets – no suspended ceiling and strip lights. Instead, the interior is like a huge atrium, with the vaulted ceiling being the structural beams and inside of the Kingspan cladding. Thorn lights hang from the beams, a nice feature in themselves, but also providing illumination that is less harsh than strip lights. They were suggested to us by local electrical wholesaler, Walter Mercer, and they are much more dramatic and attractive than strips.

“While the vault is an interesting and different feature in itself, because we don’t have a suspended ceiling, which in itself is expensive to install, we have been able to maximise the use of natural light at front, side and rear, which in itself is substantially more energy efficient as we need less artificial light. In fact, to have gone down the traditional route of suspended ceiling and strip lights would have cost three times as much to do in light fittings alone, while we estimate the amount of natural light coming in makes it 70 per cent more energy efficient to actually light the interior,” explained Philip.

ENTERTAINING THE CUSTOMERS

Located on such as busy road, which is the main road for people travelling to and from Monaghan and Cavan, as well as being the primary route for people going to Craigavon Area Hospital which has a huge catchment, food-to-go was planned as an important feature of the new Centra. We already have a hot food-to-go offering at Tandragee, but here at Centra Dobbin Road we have taken that offer to another level to include a deli/sandwich bar,” said Philip.

“Bearing in mind that many people are tired sitting in their cars and want to stretch their legs, we have included two pedestal tables at the food-to-go area where they can stand and eat their food if they wish. At the same time, they can catch up on the latest Sky news or sports on one of the flat TV screens we have included in-store – one at food-to-go and the other beside the tills on the way into the off-licence.
“The thinking behind this is that if the store is very busy and people are maybe having to queue for service, if they have a TV to watch, it’s much more interesting than simply looking at the back of the head in front of you and two minutes passes much more quickly. It’s something to divert attention. It may be a bit gimmicky, but it definitely seems to work and down at the food-to-go area we see guys coming in and standing eating their sandwich or bacon buttie while chatting to each other about what’s on the TV.”

Briefly outline your career to date

I started my career in London as a retail manager for Sainsbury’s. After working there for over eight years, I returned back to Northern Ireland in 1996, where I was involved in the initial set up of Sainsbury’s in the province as a Deputy Store Manager before being appointed as the Trade Development Manager for NI to focus on local sourcing and trading issues.

In 2001 I took the decision to move to the ‘other side of the fence’ when I joined LMI Foods working on the Walkers brand, before my employment was fully transferred to PepsiCo International two years later.

In 2005 a great opportunity came up which saw me manage another strong brand within the PepsiCo portfolio - Quaker cereals and snacks - on an all-Ireland basis.

In mid 2006, I then moved to my current role, with a mainly Walkers focus.


What does your current role involve and what is a typical working day for you?


My current role is the Account Manager of the Walkers brand on a local basis across the NI grocery channel. It involves building and executing adaptable business plans with our NI customers in order to mutually deliver further consecutive years of sustainable growth. I also oversee the Quaker Cereals business across impulse.
Working in a FMCG channel that is constantly changing, there is no such thing as a ‘typical day’. However it will generally start with a review of current sales, followed by promotional and NPD management, driven by maximising our fantastic 2009 marketing calendar. At times, meeting my customers’ needs can also alter how the day is prioritised.


What professional and personal qualities does it take to do your job effectively?


First and foremost it takes organisation, forward planning and continual prioritisation – underpinned, of course, by the ability to deliver. I believe that it is equally important to develop and support our people in their work to help them realise their potential. 


What has been your greatest career accomplishment to date?


It is always difficult to pinpoint a single event, as there have been so many highlights over the years. However, the most memorable would include being selected to relocate from London for the set-up of the first Sainsbury’s store to trade in NI back in 1996, as well as setting up and evolving the grocery capability on the Walkers brand for NI over the past number of years. 


What is the most important lesson life has taught you?

Think before opening your mouth… I am still on a learning curve with this one!


Whom do you most admire and why?


My wife Samantha, for putting up with me!


Where is your favourite place and why?


It has to be the sunshine state of Florida. There is so much to do and keep the family entertained, plus it beats lying by a pool for two weeks. I also got married out there!


What makes you laugh … and cry?


My two children Katie, eleven, and Mark, nine, make me laugh… and cry when they are looking for more money for the latest ever-changing kid’s craze.

Who would you invite to your dream dinner party?


Alan Carr, Justin Lee Collins and Peter Kay for the instant comedy value and Sir Alan Sugar.


Your biggest fault is … and your redeeming feature?


My biggest fault is at times being too much of a perfectionist, yet I guess my redeeming feature is that things get done to a high standard most of the time.


What do you enjoy most about your job?


I enjoy working in a grocery channel that has changed dramatically over the past ten years and continues to do so, ensuring constant variation and stimulation. With a portfolio of fantastic brands and talented colleagues, I also find that working for a global, innovative and dynamic company like PepsiCo can be rewarding.

What did you want to be when you were growing up?


I didn’t have a clue, so when being in the fortunate position to have been offered a retail manager training programme or a bank job with Lloyds at the same time (both in London), the retail manager job was taken purely because they provided accommodation support. It was a simple as that!


What single thing would improve the quality of your life?


Six numbers on the National lottery – roll over and sole winner of course!


What is your greatest extravagance?


It has to be holidays and red wine.


What trait do you most deplore in others?


Those who promise the earth and deliver nothing


Your food vice is?


KFC – on a morning after a heavy night it works wonders.


How do you relax?


I relax by spending time with family and friends, plus the gym a couple of times per week.





What are your all-time top five grocery brands?

Walkers Doritos, Quaker Oatso Simple, Heinz soup, Cadbury’s chocolate and Ambrosia custard.

Harry, who lives in Gilford where the Glen Tender farm shop is situated, was delighted at the knowledge and interest expressed.  He says: “I know that all the Royal family is interested in farming but The Princess Royal reminded me that she is in the beef production business too. She was extremely interested to hear what we had to say about our traditional, kind-to-cattle approach and was very aware of the need to try new approaches in order to provide sustainable livelihoods for local farmers.  She gave us a lot of encouragement and some sound advice too!”

SuperValu Getaway Breaks has been running for six years and this year to date almost 8,000 NI SuperValu shoppers have taken advantage of the discounted rates. The promotion continues to increase footfall in the store, increase brand awareness, customer loyalty and most importantly sales. It involves minimal effort on the retailer’s part and its popularity continues to grow.

Briege McGinty, SuperValu Marketing Manager, said: “SuperValu Getaways is just one of the continued ways in which we support our retail partners. It promotes customer loyalty and is a firm favourite amongst consumers. The addition of Belfast City Centre hotels to the promotion shows the development and growth of the promotion and we hope it is a welcome addition for our retail partners and their customers.”

Figures released show that the company has seen sales in excess of £12 million per week for four out of the first nine trading weeks, starting in May 2009. Cumulative sales to date stand at £106.7 million, which is 9.07 per cent up on the same time last year. This news comes hot on the heels of confirmation of the company’s financial performance for the previous year, ending April 2009, showing sales of over £578 million. This was an increase in turnover of +5.6 per cent. Turnover for the previous year, 2007/2008, was £533 million.

TOOLS TO COMPETE

Commenting on the announcement, Managing Director, Nick Ivel (pictured), said: “Given the difficult economic climate of the past year, I am especially proud of what we and our network of retailers have achieved. We believe the reason that we are attracting more stores and seeing rising sales through those stores is that we are giving our retailers the tools to fight back in an ever more competitive marketplace. In particular our calendar of top brand promotional offers and fantastic customer loyalty schemes allows the storeowner to build customer loyalty and at the same time increase their sales and profitability.

“We also provide a fantastic network of support for our retailers, providing expert support and advice. Our business development and category management team can help maximise sales and profit through clever display and merchandising solutions. And of course, what really makes us different as a symbol group is our continued unrivalled consumer presence.

A COMPLETE PACKAGE

“This includes an integrated high profile TV, press and door drop leaflet advertising campaign, driving footfall into store and so increasing sales. This activity is complemented in store with our impactful POS kits, Costcutter In-Tune radio, Costcutter In-Vision (in store media screens) and on-line at costcutter.com

“These results show that the hard work we have put into crafting a complete package for the independent store owner is paying off. It has always been our policy to work in partnership with store owners, helping them operate more efficiently and so achieve mutual success for them and the Group,” he concluded.

The ‘Pennies for Plastic’ trial includes 13 local SPAR retailers across Northern Ireland who will be charging customers who opt to take plastic bags in their shops. Although this is a trial with a goal to rollout this initiative across all SPAR’s in Northern Ireland, the aim is to help reduce the stores plastic bag usage and therefore minimise waste. The trial will last three months with a planned phased rollout across the province.

Commenting, David Agnew, Senior Area Manager for the Henderson Group, said: “Reducing, reusing and recycling is core to Henderson’s Corporate and Social Responsibility strategy. We are delighted to be leading the way for SPAR in Northern Ireland and take our environmental and social responsibility seriously. We want to make it easy for our customers to do their bit to help the environment and their local community by reducing plastic bag usage and raising money for the NSPCC.

“We will have already taken several steps towards helping reduce the number of carrier bags by always encouraging customers to think about whether they really need a bag to, now, trialling carrier bag charging in our stores. We also offer our customers a stylish yet sustainable bag solution that they can bring with them each time they shop.”

Datamonitor’s research has shown that UK consumers are among the most sceptical in the world, with 90 per cent believing that the country is in recession and a further 47 per cent experiencing a worsening personal financial situation between October 2008 and April 2009. It is therefore not surprising that ‘lower prices in general’ is a big influence on where UK consumers now do most of their grocery shopping.

STORE LOYALTY NOT HIGH

However, the primary influence was ‘the overall quality of products sold’, demonstrating the ‘want-it-all’ attitude of many consumers in the UK. Only 36 per cent of respondents in the UK cited ‘habit’ as being an important influence on where they shop for groceries, suggesting that store loyalty is not high.

A significant majority of 71 per cent in the UK agree that they now wonder more whether they are getting value-for-money from their grocery purchases. In addition, almost one-third of consumers are changing where they do their grocery shopping in a bid to save money. Other popular approaches employed by UK consumers included using coupons to obtain discounts and being more disciplined by using a shopping list and not buying any additional items.

“This provides opportunities for those industry players that can successfully find the ‘value sweet spot’ whereby the product or service meets or exceeds quality expectations, but at a price that is slightly less than expected. This applies to all sectors of consumer packaged goods,” comments Daniel Bone, Datamonitor analyst and report author.

PRIVATE LABEL GROWING

While some brand loyalty could be seen among UK consumers, 43 per cent agreed that they had recently given up some of their favourite grocery brands. In light of this finding, it is unsurprising that many private label brands have enjoyed success. Datamonitor research emphasised these attitudes among consumers - only 15 per cent advised that they ‘rarely’ or ‘never’ bought private label products, while 39 per cent could be classed as regular purchasers in this area.


Regular purchases of private label products in one category can allow consumers to maintain their preferred brand choices in another category and this behaviour is common among consumers in the UK. In some categories, consumers see little difference in the quality of private label products when compared to market-leading famous brands and this represents the challenge that some marketers will face.

For example, 46 per cent of UK respondents felt that private label food products were identical to branded equivalents, while a further 7 per cent said that private label was superior in this field. It is likely that consumers will maintain their purchasing patterns when economic conditions improve if they are satisfied with the quality of private label goods.