Catering for the needs of students is easy, right? Stocking noodles, frozen pizzas and budget alcohol might once have guaranteed sales profits, but Arnaud Leudjou listened to his customers and found a very different path to success. Alex Yau reports.
Students are changing. Before you even walk into Arnaud Leudjou’s Costcutter on Brunel University campus near Uxbridge, Greater London, the well-kept flower display above the fascia tells you this is more than a place to pick up baked beans and cheap booze.
The 14,000 undergraduates who visit the store seem to prefer a diet of healthy sandwiches and fruit juices over Pot Noodles and lager. And Arnaud says more than 80% of sales come from hot and chilled food to go alongside soft drinks, while alcohol sales contribute just 5% in this 1,600sq ft convenience store, where average basket spend is up to an impressive £5.
It wasn’t always like this, however. Arnaud joined what was then an underperforming Costcutter store in 2013 and has since worked hard to turn its fortunes around.
“Students preferred to go to the nearby Aldi and the store had been losing money each year until two years ago when myself, the university and Costcutter decided to find out why. We sent out a survey and it turned out there weren’t enough healthy options in the store."
The survey was the foundation of a project to expand the store from its original 1,200sq ft. Its product mix was shifted to the demands of its customers for a healthier offering, with the chilled food to go range increasing by 60%, soft drinks by 50%, snacks by 30% and baked goods by a quarter.
“It’s about promoting impulse buys. Students are all incredibly busy with lectures and will be more likely to impulse buy.”
The expansion has paid off. The store made £2.5m turnover last year and this is forecasted to increase to £2.7m by the end of 2017. The positioning of snacks, sandwiches and drinks to encourage impulse buys has underpinned this growth, with non-alcoholic drink sales generating £500,000 a year.
“Our fresh sandwiches, healthy snacks and drinks are all positioned next to each other,” says Arnaud. “It’s about promoting impulse buys. Students are all incredibly busy with lectures and will be more likely to impulse buy.”
Coffee also plays a vital role. The store's Seattle’s Best Coffee machine – a brand owned by Starbucks – sits by the entrance offering coffee, hot chocolate and tea with muffins and croissants positioned close by. It has proved popular, with more than 100 cups being sold each week.
“The coffee machine does very well for us and we make a margin of around 40% on each cup,” says Arnaud. “Students instantly see the machine and they can smell the coffee when they walk to the till. They fill their cups and want to get a cake alongside it. It’s about driving convenience for customers who are already on tight schedules.”
More than 30 promotions are run weekly, but the sandwiches and hot or cold drinks have no part in discounts or meal deals. Instead, students have offers such as three chocolate bars for a set price or 50% off £2.99 multipacks of Kellogg’s cereal.
“Our deals are more geared towards confectionery products,” says Arnaud. “It’s all about the idea of quality over quantity. Customers are more willing to spend a little more if they know it offers something good for their own bodies, but you also need to offer them a choice.”
It isn’t just Arnaud’s healthier range that breaks conventions, however. At the end of last month, his store became the first convenience store in the world to have a fingerprint-based payment system.
Students simply upload their bank details and fingerprints to a database and can make transactions by solely pressing a sensor by each till. The new system is estimated to halve the average time of each individual transaction.
The university is renowned for its engineering department and Arnaud believes his store shows how quickly the area is moving forwards, both with range and technology. “It’s another way we’re breaking norms at Brunel,” he says.