When Kathiravan Ramajayam took over running Ablewell Convenience Store and Jet forecourt, he had quite a task ahead of him. The site in Walsall near Birmingham had a reputation for card cloning, its shop offer was way out of date and people in the area preferred to shop at the cut-price local supermarkets. Added to this, Ramajayam was living in London and had very little experience of the forecourt industry.
But all this didn’t faze him. "I like a challenge and we could see that this site had a lot of potential," says Kathiravan, who is also known as Kathir. The site is owned by his sister Parameswari Rajamanickam and her business partner Gareth Zarpellon, and they enlisted Kathir’s help to totally transform the business after they bought out the previous owners in January 2007.
When Kathir took over, the 2,000sq ft Select & Save had only a basic kiosk offering with sales of £14,000 a week. By the end of 2007 it had signed up with wholesale distributor Palmer and Harvey and switched to Mace. But Kathir, whose only previous experience in the business was working in a petrol station for eight months a few years earlier, says the real turnaround for the business came two months later when they became a member of Palmer and Harvey’s recently launched Partnership Plus scheme.
He says: "It’s totally transformed the business. Palmer and Harvey (P&H) gave the site a complete overhaul. They came and showed us exactly how we should be laying out the shop and what we should be stocking. This resulted in us increasing our chilled range and adding promotions - we didn’t have any real promotions before. P&H also advised us to get an alcohol section, we didn’t have one before. And we’ve got a larger fresh offer selling sandwiches to take away.
"There’s a Lidl about 500 yards down the road, and there’s also an Aldi nearby as well as a 24-hour Asda so how we change the shop has all been a bit of trial and error. We tried doing hot food-to-go during the day but we’re very near Walsall town centre and there are plenty of places there doing it, so we’ve had to adapt our offer. We do sandwiches during the day and we pick up quite a lot of trade at night with pizza and chips from the microwave. There are plenty of revellers round here late on a Friday and Saturday night, and the only thing you can really get around here at about 2am is a kebab, so we pick up quite a lot of trade then."
He says that as a result of joining the scheme, sales have grown to £22,000 a week. Alcohol has grown to be the third biggest category, after tobacco and soft drinks, and accounts for about 25% of sales. The fuel side of the business has grown more slowly, but has gone from 60-70,000 litres per week to 75-80,000 per week.
Both the shop and Jet forecourt are open 24 hours a day, seven days a week, and the site has a security guard on duty from 6pm to 6am. Glyn Cooper, sales manager at P&H, and Ivan Lester, P&H’s area development manager, have been involved in helping Kathir with the Partnership Plus transition.
Cooper explains: "This is a real neighbourhood site, about 30% of customers walk here. But it needed an overhaul. It had a poor reputation in the area, but now people are coming in who haven’t shopped here for years. It’s a constant top-up shop, and with the off licence and hot food at night it’s completely turned the business around.
"Partnership Plus is a package that retailers sign up to, then we come in and do a trading profile and give the retailer our advice on things. We try ideas out, and some of them work and some not so well - it’s constantly changing. It’s totally impartial advice, including how the store should be laid out, which products would work best and which promotions. This site is basically now a convenience store with a forecourt attached."
Retailers get regular visits from their P&H rep to change anything that’s not working. They also get cash back as a loyalty reward - up 2.5% of the value of all non-tobacco purchases from P&H. According to Kathir, who now splits his time between his mobile phone business in London and the site, this currently works out at about £2,000 a month for him. There are also regular deliveries aimed at helping retailers reduce their stock holding, Kathir says the site receives new promotions every three weeks, and that adding a symbol group to the store has really helped shop sales.
=== Palmer & harvey and partnership plus: ===
P&H launched Partnership Plus at Pro-Retail earlier this year - it followed a trial of the scheme between September and November 2007, and a roll-out to its symbol customers from January 2008.
The scheme is described as "a comprehensive customer package for independent stores, designed to offer superb value and service, combined with the best retail support and knowledge available in our industry - the ongoing ’survival pack’ for professional independent retailers".
There are now 1,000 retailers on the scheme.
P&H marketing manager Andrea Ward says: "The bottom line is all about the bottom line: if retailers join, their sales increase.
"Partnership Plus was launched as a tool to provide our independent retail customers with the kind of support that other major competitive retailers in the grocery sector have been used to for years. Up until this launch, we’d been very efficient at delivering boxes but you could say we saw our responsibility as ending there. So we carried out wide-ranging research with our customers and the feedback was that they needed the kind of added value support that head offices give, the kind of marketing clout that managers of the multiple convenience stores can sometimes take for granted.
"So simply by complying to an agreed level of spend with Palmer and Harvey, retailers get a wide package of exclusive benefits designed to maximise their sales and profits."
Retailers receive a new detailed colour brochure every three weeks which is divided by sectors into convenience, forecourt and CTN, and regionalised to England & Wales, Scotland or Northern Ireland. It is also designed to be clear and concise.
The company says other benefits include:
* Macro and micro space recommendations, including industry benchmarked range planograms with almost 50 for England and Wales forecourts alone.
* Shelf, gondola and chiller space apportionment guides.
* Product placement and facing guidelines.
* Independent data but all benchmarked versus the marketplace.
* Tailored ranges based on sound range management principles.
* Recommended core range and optional extended range, all ranked in terms of sales, and sector focused.
Clear, competitive pricing:
* Simple clear net pricing, with rates that are highly competitive when compared to a typical cash and carry.
* Shopping basket of KVIs (known value items) matched to cash and carry prices
* RSPs for each product tailored to the sector to maximise margin.
* Focused on big brands that sell for maximum promotional profit and sales uplift.
* Extensive point of sale package.
* Special free-of-charge consumer leaflets or forecourt posters.
There is also the ’cash back’ reward scheme - the more retailers buy, the more they get back on their Palmer and Harvey purchases, with up to 2.5% of their spend with the company.
It’s all wrapped up in a single, consolidated, easy-to-read statement.
And each customer applying to join is given a free bespoke consultation by a sales executive showing them what improvement they can expect based on their current level of trading and the level of their rebates if they increase their purchases from Palmer and Harvey.
Chris Etherington, P&H chief executive, says: "As the retail environment gets more competitive it is vital independent retailers strengthen their offering in order to efficiently compete and provide consumers with real choice.
"Palmer and Harvey, through its position as the UK’s largest wholesale distributor, has the twin benefits of independence and experience with which to advise retailers on the best strategy to manage their businesses, drive sales and boost profitability. Through Partnership Plus, Palmer and Harvey will leverage its scale, capability and deep understanding of the retail sector to provide a fully integrated offering that will help independent businesses remain competitive."