How did a small family-owned independent business go from a single store in 1935 to one of the largest independent retail chains in the country? For owner Stephen Jempson, the key is to focus on what your brand means to your shoppers.
“Independent retailers have to build their own brands. When we trade our own-label Rye Bakery bread in our own stores, for example, we sell an 800g loaf for £1.71. A mainstream loaf can only fetch £1.25 maximum in in-store bakeries. A loaf of bread costs us very little to make, but as artisan bakers we achieve certain margins and selling prices to maintain our uniqueness,” he explains.
This logic is visible in every part of Stephen’s award-winning family business. The Jempson’s business consists of three supermarkets, in Peasmarsh and Rye, three smaller Jempson’s Local stores which are between 2,000 and 8,000sq ft, six bakery & café stores and two takeaways. Taking a look inside its flagship 35,000sq ft store in Peasmarsh, which claims it is the biggest independent food supermarket in the country, you can see what the Jempson’s brand means – traditional, homemade, quality foods.
But the jewel in the Jempson’s crown is Rye Bakery, which is centred in a 2,500sq ft industrial unit located a 10-mile drive from the centre of Rye. The unit churns out bread, cakes, doughnuts and more day and night, all under the Jempson’s & Rye Bakery brands. “We’re an old-fashioned baker, following traditional recipes. We bake bread through the day, then we start baking the morning buns and doughnuts through the night,” Stephen explains.
Having this operation enables the business to effectively print money. “We wanted to move away from the traditional doughnuts with a coffee, because there’s a limit to how much people will pay,” Stephen says.
“£1.25 is that limit, but we can sell cake for £3.50 a slice. A whole cake at 12 slices is £42 of retail sales. You’ll never get that price out of doughnut. Cake is the future.”
It’s this focus on quality own brand that enables the Peasmarsh store to operate on margins above 33%. “This goes even higher during seasonal peaks because people come to Jempson’s for something different,” he explains.
The store’s focus on own brand isn’t just limited to baked goods, though. By working with local suppliers, the Jempson’s brand extended to beers, ciders and wines to mark the company’s 80th anniversary in 2015.
Jempson’s knows exactly who it is targeting. Shelves of market-bought fruit and vegetables are flanked by gardening equipment and home accessories. At times, it feels not just traditional but antiquated, until you see the types of shoppers coming in and the £20-£23 average basket sizes they are leaving with.
“We tried to go very upmarket and clinical five years ago, but it just didn’t work. I went back, got more competitive and added an extra £12,000 a week overnight,” Stephen says. “You must never lose footfall – if you lose that, you have lost any opportunity of working on margin.”