Costcutter – Newburgh

Ellon, Aberdeenshire

1,200 sqft

Stuart Mitchell is a passionate local retailer who, despite facing little competition, is working hard to improve his store’s offer. He tells Max Liu why

For Stuart Mitchell, local means local. “I see retailers in RN talking about local suppliers and it’s sometimes a firm 40 miles away,” he says. “I work with suppliers two miles from me. That’s what I call local.”

Stuart has run Costcutter in Newburgh, near Aberdeen, for 12 years and his community is the lifeblood of his store. “There are only 300 houses in the village,” he says. “I get passing trade from people driving the scenic route to Aberdeen, but otherwise everyone who shops here lives in Newburgh. Staff can be hard to find in a small community, but I have 12 on my books, including one who’s been with me from the start.”

Villagers come in search of whatever they have forgetten to buy at the supermarket (there is a Tesco five miles in one direction and a Co-op five miles in the other), which is fine by Stuart. “We’re here purely for convenience,” he explains. “Nobody comes in here for their week’s shopping and the average basket spend is £7. The people in the village are fairly affluent, which means they want quality, so I tend to stock a combination of local produce and brands, with very little own-label stuff.”

With no convenience competitors nearby, then, why did Stuart decide changes were in order at his store last year? “For any business to thrive, it must evolve,” he says. “I wouldn’t exactly call what I did a refit. It wasn’t a gutting of the store, more a redesign, moving things around and adding features.”

The plan was to build on the business’s strengths. “I expanded food to go and made it more prominent. I’ve been making sandwiches on-site for four years and they’ve always sold exceptionally well, to the point I now sell double what I did four years ago,” he says.

In fact, sales of sandwiches have increased by 35% in the past year and the store now also sells hot sausage rolls, pasties and pies.

To focus on these areas, there have had to be some losers, Stuart says: “Newspaper and magazine sales were static, so I moved them from the front to the middle aisle and, in their place, I installed a food to go unit which holds an oven and hot water machine.”

He also believes in taking risks and another of his store’s changes involved making a fairly long-term commitment. “You’ve got to try new things,” he says. “I was selling Tchibo coffee but I thought a bigger brand might help us grow sales. Costa insisted I sign a minimum five-year contract, which was a bit daunting, but it’s worked out well, with coffee sales doubling in the three months since I introduced their machine.”

The machine has also widened his coffee offer’s appeal “Customers who were already buying Tchibo still buy it, but it also appeals to other customers who were not buying coffee and new customers attracted by the Costa brand.

“When you have affluent customers, brands bring them through the door. I discovered this a couple of years ago when I put in a self-service ice cream machine and a Slush Puppy machine for the kids, which both give high margins.”

The next challenge was getting the word out about his in-store developments. “I knew I could rely on word of mouth in Newburgh but social media can be used to reach potential customers further afield,” he says.

“Costcutter helped set up our Facebook page and one of the first things I did was promote our Costa coffee to customers aged 18 to 60 in a 40-mile radius.”

In fact, even the store refresh was a remarkably local project. Stuart kept it in the family: “My dad did the woodwork, shelving, canopying, joinery. It took five days and cost us just £1,000.” As Stuart says: “you can’t argue with that”.

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