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James McCormick’s decision to switch symbol groups last year was ultimately a temporary one, but changes made in the past 18 months have allowed him to create a one-stop shop with unbeatable prices. Rachel Barr reports
At the heart of James McCormick’s 10-year-old convenience store in Lancashire is his understanding that his customers value price above all else.
So his quest for great value, he explains, has taken the business through some significant changes in the past 18 months.
James runs a 750sq ft Bargain Booze in a busy shopping centre in Skelmersdale, having joined the group when he opened the store.
But last year, with competition in a two-mile radius including Asda, Spar and Premier, and a Co-op just 15 yards away, he made what turned out to be a temporary switch of symbol group in a bid to improve his offer. “We were a really successful Bargain Booze, spending £1.3m at wholesale annually, but I wanted a change and to give customers better value, so I joined Costcutter,” says James.
The move allowed him to undergo an extension and a £100,000 refit that added remote refrigeration, a new floor, ceiling and counter, shelving, tills and signage. The refit created space to triple the fresh offering and extend core ranges such as soft drinks to widen the store’s appeal to local customers.
“I had been competitive on core products, but customers were saying ‘I can get it cheaper in the Co-op’, even about alcohol,” he says. “I was losing £20-£40 sales from regular customers and trying to compete on fresh sales with other convenience stores nearby. I had to throw a lot of fresh food out.”
But however great his store looked, James soon realised that adopting a standard c-store format had stripped it of its point of difference, and higher prices were driving customers to his competitors.
James began buying stock from Bargain Booze again to get his prices back down, and eventually decided to return to his former fascia just nine months after leaving it.
Since then, he has worked to stabilise and grow sales by fine-tuning the changes made during his refit.
“Before the refit we only had 1m of chiller space, now we have 3m,” he says. “The range in there includes a selection of fresh essentials, sandwiches and pastries along with a small range of fruit and vegetables. Being a Bargain Booze, around 70% of sales come from alcohol, but since the refit more people are buying fresh products. More than before, we are a one-stop convenience shop rather than just an off-licence, and we are selling more of everything.”
He has also focused on maintaining his point of difference and core sales, relying on competitive pricing and marketing to rebuild loyalty to the store.
“We are a busy store in a very competitive area, but we are beating the multiples with many of our everyday low prices,” he adds. “Bargain Booze has done a £2m price drop on best-selling lines so I am able to sell four-packs of Foster’s for £3.99, for example.”
To maintain loyalty and attract new customers, James has also invested in leafleting, and is bringing in extra customers with every promotional cycle.
“I send out 6,000 leaflets per six-week cycle. I do coupons, such as £2 off, and get around £800 in extra sales.
“When the promotions start we get people in on that day with a list of products from the leaflet, so I know it works. We’re spreading the leafleting further so people know we’ve reopened as a Bargain Booze or to connect with people who haven’t heard of us.”
Now the business is back on track, James is looking forward to the busy Christmas period, and is confident that fortnightly deals on key alcohol such as Smirnoff, Bailey’s and snowballs will attract decent festive trade.
He is also gearing up to use his expertise to help a long-standing member of staff open her own Bargain Booze franchise.
“We’re one of the top stores per square footage for Bargain Booze. It’s a hard logistical job keeping the shop filled up and to the right standard, and it’s been a long journey to get here, but I’m proud of the business we’ve built,” he says.
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