How Costcutter Bull Street is triumphing over the multiples
A city centre store brings opportunities, but also challenges
Costcutter Bull Street
85 Bull Street, Birmingham, B4 6AB
“We’ve found that staff from nearby multiples are coming to us for their food and drink,” says Mike Nijjer, from Costcutter Bull Street in Birmingham City Centre. “That’s really encouraging. We’re definitely doing something right.”
The answer to thriving as an independent in a bustling city centre, according to Mike, is simple. It’s about giving customers what they want.
“Even though our prices are slightly higher than you’d pay in a Tesco Express or Sainsbury’s, people are still choosing to come to us. It’s because we’ve got the wide selection of products they’re looking for, while the multiples tend to focus on just stocking a core range,” he says.
Like any location, being an inner-city store presents challenges as well as opportunities. Although the store is in a high-footfall area, they’re also contending with high overheads on rent, business rates and staff wages, and are surrounded by competition. Most recently, of course, they’re having to face the disruptions and uncertainty of the Covid-19 outbreak.
“It’s daunting,” he says. “But we’ve all got a part to play in dealing with this crisis, however little or big. We’re putting limits on to stop bulk buying, for example, to boost consumer confidence in us.”
Mike took over the store four years ago, converting it from a Subway franchise into a Costcutter convenience store. Since then they’ve grown the business and its turnover, attracting more footfall from workers in the centre of Birmingham, local schools and universities, as well as people using nearby transport connections.
“I worked in wholesale before,” he reveals. “I was a retail consultant, helping retailers source products and decide what to stock. It gave me useful insights. A lot of retailers stick to certain wholesalers. But there are a lot of niche wholesalers out there who do good products that you can really maximise.”
Mike focuses on working with wholesalers who can give his shop something a little different, and maintaining high standards in store, with all lines consistently faced-up.
“We work with a local snacks company, a startup, that supplies nuts to us, things like packets of organic cashews, walnuts and almonds,” he explains. “Because they’re a small company, we can make suggestions to them based on the customer feedback we’re getting, such as on prices and packaging. This is something that you could only do with a smaller, local supplier.
Before, we worked with a bigger company, and although they sold well, the margin wasn’t as strong for us. As the new company is smaller, we can make suggestions to them, and they can act on them quickly.
“We also get cereal bars from a nearby supplier. People like to try something new, so the local suppliers give us a point of difference.
The high city centre overheads mean there is constant pressure on Costcutter Bull Street to have a strong turnover. Meanwhile, the security of the business is a concern that also needs to be carefully managed.
“We’ve decided not to sell any beers with an ABV above 6%,” says Mike. “There’s a problem with antisocial behaviour in the city centre, so we’ve stopped selling those products. It’s better for the area and makes my staff’s lives easier and safer as the customers buying it can be abusive. We agreed to do this with the local council.”
A nearby pub also presents a challenge, especially as the store is open until 11pm.
“We have a radio in the store, and a panic button, which connect us to the local security services, covering the pub and other businesses in the area. It helps protect my staff in the event that we have any issues,” Mike explains.
“We’ve invested a lot in making the store customer friendly,” explains Mike.
“We want to have a good shopper flow. So, when they walk in, it’s easy to find everything. This is really important for an express store, where people want to be in and out quickly because they’re on lunch or dashing for a bus. I’d say 97% of our customers won’t even pick up a basket.”
Staffing is also crucial to maintaining this flow in the store. Serving a diverse mix of customers, from students to builders, the shop can have unpredictable customer peaks.
“We always have a minimum of three staff on, one on each till and someone refilling on the shop floor, to make sure we’re well-stocked and the queues don’t get too long. It’s good for security, too,” he says.
With several multiple express stores within two hundred yards of Costcutter Bull Street, Mike has learnt that a unique mix of products makes his store stand out.
“We’re really up against the multiples here,” Mike admits. “There used to be more independent retailers around, but in the last few years they have all disappeared. It’s not cheap to be in the city centre and many retailers struggle to sustain it.
“We’ve looked at what the multiples stocked, and we’ve tried to offer something different to what they do. We aim to have a bigger variety, and a different variety as well. We stock a lot of American confectionery and drinks, for example. They do really well, because the multiples don’t really have them.
“We’ve got this flexibility in our range, but it’s something that the multiples can’t really do,” he says.
Mike has focused on a strong depth of range to mark him out from the surrounding competition.
“Take something like Monster energy drinks, which are a big seller for us. If you look at the whole range, it’s something like 30 different drinks,” says Mike. “None of the multiples will stock all of the range, but we do, and we’ve found all of them sell at a good rate. This is how we’ve built up our turnover.
“Before, I’ve tried taking out some of the slower-selling lines, and we found that because customers come in consistently for it, they’ll ask us why we stopped selling it. We have people telling us they walked five minutes to get a drink. In the city centre, walking five minutes is a long way – you pass a lot of other shops in that time.”
“We’ve had customers coming in and trying to bulk-buy certain products, such as Dettol cleaning products, hand washes and toilet paper. We’ve set a limit of one per customer to prevent people buying too much,” says Mike. “You want customers to be confident in your store, that they can get what they need during the crisis. We’ve all got a part to play in helping.”
“As we’ve had a large drop in footfall, and we expect the decline to continue, we’re cutting back on orders every day, especially for products with short shelf lives. For instance, we’re ordering fewer ready-made meals and products for our food-to-go section. It’s helping us save money and reduce our wastage,” explains Mike.
“We work with smaller suppliers and they tend to be very understanding of the situation. For instance, we’ve reached a mutual decision on certain products that they’ll accept returns on things we don’t sell. We’ve also lowered our delivery frequency as well.”
“We had a lot of customers coming in for paracetamol, while we sold as much toilet roll in four to five days recently as we usually would in a year. Shoppers don’t usually come to us for these things, but we’re letting them know they’re available and doing our best to be well stocked.”
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