MFG still has ambitions to grow, both organically and through acquisition, with a massive investment programme of many tens of millions of pounds planned.
William Bannister, chief executive officer of MFG, which became the UK’s largest independent convenience forecourt retailer (900-plus sites) following its £1.2bn purchase of MRH last year, said: “There will be some expansion by acquisition where it suits our network and where we think we can add value. But organic growth is key.
“Since working with our private equity partner Clayton, Dubilier & Rice, we realise we have to improve our retail and food-to-go offer. We started putting FTG in our MFG estate 18 months ago,” he explained.
“We are putting a massive investment in organic growth in terms of shop developments, refits, new-builds and drive-thrus. There’s an ambition there and we have the money and the capacity to do it.”
Last year the company completed 44 redevelopments – ie 10% of the estate at the time – including knock-down-rebuilds, extensions and refits. It has also built a programme for standalone Starbucks drive-thru restaurants, where there is spare land capacity.
“We started five drive-thru sites last year – our first Starbucks was completed at Wittering on the A1. We aspire to do up to 30 by 2020,” said William.
This year the target is for about 60 redevelopments including about 40 food-to-go offers – Subway, Greggs or a Costa barista format; and subject to planning it will do circa 50 store refreshes, which means branding the former MRH stores which had no store branding, and refitting them to improve sales.
“We’ve built MFG from the bottom up with strong foundations,” said chief operating officer Jeremy Clarke. “There is a perception that big is best on a build. We would love to do KDRBs in the right locations. But if there are two other convenience stores nearby, we won’t be the convenience store, but we might be the convenience stop. On those sites you extend or redo the shop or brand and refit the interior, create theatre and make it exciting. It’s about putting your money in the best place to get a return. Because we’ve grown up with quite a varied estate of different sizes of sites, we’ve had to learn that discipline.”
Jeremy said there had been challenges integrating MRH into the MFG network, but challenges also presented opportunities. “It is about pulling out the best practices of both companies. There are some excellent things we have come across in MRH which we are now applying across the network. It’s all about adding value.”
MFG is supplied by Booker throughout its network, and so MRH’s Hurst’s brand on 300-plus sites will be changed to a Londis or Budgens over time. The conversion of 100 Spar stores is also under way.
The aim is that the MFG network will have a consistent feel with a core range tailored for different-sized units; with facilities like FTG, alcohol, good customer toilets, electric vehicle charging, and ATM creating a destination.
MFG also believes in having a spread of fuel brands, which includes the premium brands – BP, Shell and Esso – as well as Valero and Phillips 66, which logistically have advantages in certain areas of the country.
“We should be the canvas on which great brands sit,” said William. “Our ambition is to create a really good customer experience, and to grow a recognisable model – with an element of MFG branding – but which will fulfil customer needs and move with the times.”