Twelve months ago, in the middle of the pandemic, Mandeep Singh and his brothers, Bal and Vrinder, took the plunge and ripped out his store from floor to ceiling, to create Premier’s new store of the future.
It was a bold move – and costly, with an investment of £400,000 in total – but in 10 months, Singh’s Premier’s refit has paid for itself.
Weekly sales have shot up from £35,000 to an average of £65,000. The shop now includes a Refresh@Premier drinks station, including eight hot and cold self-serve drinks machines, an extended fresh and chilled section, a ‘beer cave’, a focus on multipacks, increased vapes and US confectionery, and a delivery operation that is emptying the shelves almost faster than they can fill them.
“We’ve made use of every bit of space and we’re making money from every angle,” says Mandeep Singh.
Martyn Parkinson, sales director – retail at Booker, says: “The £400,000 investment is a colossal amount of money, but in this business, it pays back,” says “With rising costs, you’ve got to get the margin. Mandeep’s gone from 22% to 28% and we’re going to get him to 30%.”
The shop has been designed in a modular way, so other retailers can “take elements of it” for their own stores rather than commit to a full refit, Martyn says.
Mandeep has been inundated with retailers from across the UK, checking out the store, with retailers with varying shop sizes implementing changes as a result. “We’ve taken elements of this store and put it in a 580sq ft store,” Martyn says, emphasising that shop size shouldn’t be a barrier to innovation.
Despite adding £30,000 to weekly sales, the brothers aren’t standing still. “We’re not settling on that,” Mandeep says. “We’re looking at where we get the next £5,000 from.” betterRetailing took a tour around Singh’s Premier to see what other retailers can take away from it.
Eight machines, including slush machines and hot coffee are lined up as soon as customers enter the shop.
“In summer last year, Mandeep took £800-1,000 a day from these machines and he’s getting a 60-65% margin on them,” says Booker’s Martyn Parkinson.
Refresh@Premier, Martyn says, is designed to keep labour and complexity minimal, with Mandeep’s staff just switching on the machines and keeping them clean. Prior to the refit, he sold slushies for £1, but his new slushies cost £4.50, which hasn’t deterred shoppers – despite being in a less affluent area.
Coffee is part of the Premier loyalty scheme, giving customers 49p off every time they purchase a £1.49 coffee, which has helped drive more shoppers to sign up. “We have 500-600 customers on it, and we’re increasing loyalty every day, explains Mandeep. “We make 68p off every £1 coffee, so it’s still a high margin.”
Fresh & chilled
The amount of chilled space in the shop trebled and 305 long life Premier chilled lines were brought in, filling five-to-six-metres. Sales soared and an additional 200 Booker Retail Partners lines were added, as well as locally-produced ready meals. “They’ve gone from selling £1,500-worth of chilled to £6,000 a week,” says Martyn.
To make way for the increase in chillers, ambient grocery was consolidated with fewer similar brands stocked, reducing it by 30%.
An interesting move, prompted by changing shopper behaviour during and following the pandemic is a reduction in space for single bottles of chilled soft drinks, which is being given to larger formats and multipacks. “Our deliveries are driving demand for multipacks,” says Mandeep. This is evident in crisps and confectionery, too, where multipacks now play a much bigger role on the shelves.
To combat the challenge of getting customers to reach the back third of the store, Singh’s Premier has created an appealing frozen section as well as a beer cave, the latter of which was so popular it had to be doubled in size to fit more product in after a day and a half of trading.
Asked about alcohol’s placement in the store, Mandeep says: “Retailers are quick to create barriers for fear of theft, but if they get the right security system in and train their staff, they don’t have to do that.”
The beer cave includes draft kegs, which took off during lockdown and continue to sell well.
“They have a 17% margin, but a high price (£31-40), and we’re selling four-to-six pallets a week,” he says.
For retailers worried about the energy cost of housing a beer cave Mandeep is quick to allay concerns. “It’s 30% cheaper to chill than a chiller,” he says.
With average sales of £20,000 a week and basket spend of £24, it’s clear Singh’s Premier has successfully tapped into the delivery market with their own service called Singh’s Drop. They offer home delivery within 30 minutes, in a five-mile radius of the store. Delivery charges range from £1.99 to £3.99, depending on location.
“You have to deliver within 30 minutes, have the availability and have the best quality. If you don’t have those three things, delivery falls down,” Mandeep says. “We’ve got to be the most convenient delivered business out there.” They promote heavily, using Facebook, Instagram and TikTok, and use different promotions to grab attention.
“With delivery, you’ve got to put in the energy, but the numbers speak for themselves,” he says. “In two-to-three years, we expect to be getting more from delivery than in store.”
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