Mike Nicholls of Costcutter Dringhouses


3 Wain's Grove, Dringhouses, York, YO24 2TU

1,200sq ft

Costcutter Dringhouses £32,000 Gross weekly sales since the refurb

“Growing your business doesn’t just mean working out who your customers are,” says Mike Nicholls, from Costcutter Dringhouses in York. “You also need to know when they’re coming into your store.”

Mike worked with insight supplied through Costcutter’s Shopper First: Drive Five to Thrive initiative to learn about his shoppers, and guide a major refit in October 2018.

“We discovered we had two big peaks in the day, between 11am and 1pm, when people are coming in for lunch, and between 4pm and 6pm, when people are coming for their evening meals,” says Mike.

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“That told us we needed to build up our evening meal range, to give customers options and encourage them to trade up,” he says. “And we needed to develop our food-to-go offering, giving more lunchtime options and offering meal deals to encourage greater basket spend.”

The results since have been positive, weekly gross sales (excluding services and lottery) have increased by 10% to £32,000, and food-to-go sales are up by 50% to £1,200 per week.

According to Mike, who has run Costcutter Dringhouses since 2010 with manager Karen Hagyard, convenience retail is changing, and stores must adapt.

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“It’s in the name – convenience is about being convenient,” he says. “It’s not putting things in rows and hoping customers will look at every aisle anymore. That’s not what people expect in a convenience store now.”

“When customers come in, they want to find what they need, quickly. This means thinking carefully about how you group items together. A good offering will give customers everything they want, as well something extra that will inspire them to get extras on impulse,” he continues. “Every store is different, so you need to sit down with your fascia and suppliers and work out what will work for your business.”

What I do well

“Our store is in a residential, urban area with a diverse mix of incomes,” says Mike. “We have to cater to all of those with our shop.”

He says the key is grouping products together and using promotions to boost spend.

“I’ve created zones in the store. For example, all my food to go – sandwiches, hot food, drinks and chocolate and crisps – are all together in one zone,” he explains.

“Now, when someone comes in at lunchtime, rather than get frustrated because they can only get a sausage roll, they’re getting a meal deal. They’ll buy a sandwich, a drink and a bag of crisps, for example. Instead of only spending a pound, they’ll spend five or six pounds.”

“Doing this has created incremental sales that I probably wouldn’t have had before.”

“Having a surge in footfall between 4pm and 6pm told me that customers were coming in to buy their evening meals.”

The changes and their impact

“The biggest change has been our meals for tonight section,” says Mike.

“Having a surge in footfall between 4pm and 6pm told me that customers were coming in to buy their evening meals.”

“You have to make sure you’re gearing your store to where your footfall lies,” he explains. “The first thing customers see in our store is a big meal solutions section. It has fresh fruit and veg, chilled and ambient meal solutions all next to each other.

For instance, we’ve got things like pies and chips in the chillers. We’re giving customers ideas for the evening, helping them make their decisions.”

Again, it’s about an all-in-one approach to the section. “We put desserts, chocolate and wine in this area as well – everything the customer might want to pick up for their evening meal. The average basket spend for that section has gone up to about £12.”

The challenges I face

“We have a very big hot food-to-go section,” Mike explains. “This includes a range of both hot and cold food, and drinks. Things like sandwiches, sausage rolls, teas and coffee.”

As with any retailer looking to build a food-to-go section, Mike has to confront the potential wastage a lot of these lines have due to short shelf lives.

“This is where shopper data comes in,” he explains. “We know when our peak times are and how much people spend. This means we can calculate our bakes, and our orders, which helps us reduce the wastage.”

Mike says retailers need to be realistic when deciding whether to invest in food to go. “It’s not for every store. If you’re worried about the wastage on food to go, it’s probably a sign that you don’t have the right customers to justify it. You need to do the research to find out what will work in your store.” 

Costcutter Dringhouses food to go and hot snacks

How I stay competitive

“We have a Tesco and a McColl’s convenience store nearby, both are about a mile and a half away,” says Mike. “They’re close enough that we have to be wary of them.”

Mike has found the key to keeping his store competitive is working closely with his symbol group to make sure he can offer his customers strong deals.

“We currently have a promotion where customers can get two pizzas and a tub of Ben & Jerry’s ice cream for £5,” he says. 

“That offer is what customers are coming in for, but the margin for me on that is low, so I need them to be buying more. Around that section, we’re putting other ideas. We’ve got a promotion on Cobra Beer next to it, and we’ve put wine, salad, coleslaw, and even chocolate buttons to go in the ice cream,” he explains.

“We work closely with Costcutter, who support us developing these promotions and making sure we’ve got the stock we need.”

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