Aas the news broke that Rontec was extending its partnership with Morrisons with plans for a further 40 Morrisons Daily convenience stores across its network, I was in the hot seat literally in the back of the car with Rontec’s legendary chairman and chief executive, Gerald Ronson, on one of his equally legendary regular site tours. "It’s a major development programme between two companies who have a similar ’can do’ culture," he says. "We’ve done 10 Morrisons sites, and the figures so far are encouraging. We’re doing another batch of 40, but our network has the potential for at least another 50 from a locational and size point of view potentially we could have up to 100 sites under the Morrisons banner by the end of the year. It should give us another £50-70m turnover. It’s keeping the team busy! But it’s where I believe this industry is going."
The move to partner Morrisons followed Rontec’s acquisition of 40 Co-op sites last year which added a number of big stores to its network (which currently stands at 241 sites). The company aligns its store offer according to size and local demographics under a range of formats that include Shop’N Drive, Spar, Family Shopper and a hybrid format (a cross between Shop’N Drive and Family Shopper). But the Co-op sites added a new dimension.
"I inherited these great big stores up to 3,000sq ft, including one of about 4,000sq ft," says Gerald. "We’re very good at running shops of around 1,000sq ft, but Shop’N Drive (on 160 sites) is not geared up to do that size of operation we don’t have the range or the layout." He needed a strong brand with the right product range and logistics that would maximise the opportunity presented by these latest additions to what he calls his roadside retail business.
As a master of innovation and thinking outside the box during his well-documented 50-plus years in the service station business which he regards as his hobby Gerald decided the obvious thing was to go and see the bosses of the major supermarkets. By September he had narrowed the field down and was meeting Morrisons’ CEO David Potts. The first Morrisons Daily site was open before Christmas.
"I invented the self-service petrol station 50 years ago. I had 1,000 sites and the vision to put convenience stores on them. I had the vision for the next stage Morrisons. The stores we inherited are great pieces of real estate well located, and in certain areas maybe the only big retail shop around. We needed a good brand that could offer value for money for those that are counting the pennies. Morrisons is very strong on chilled products, and people coming home from work and picking up a meal for a fiver.
"It was also important to work with a company that had a similar culture to us very hands on, and focused on the detail. You’ve got to have the right chemistry. Morrisons has made a very successful comeback under the current CEO, but hadn’t been able to succeed in this marketplace.
"One big supermarket could do £50m a year. The person managing that is not the same as the manager of a small site who’s had it drummed into him to watch every little detail, and works 60 hours a week because he likes doing it."
Morrisons configures the layout and product range; distribution is by Palmer & Harvey. The results are impressive, although tweaking is still in progress. We visited two Morrisons Dailys on our tour around the Midlands the Hamilton site in Leicester and one in Hednesford. They were bright and spacious, with a comprehensive convenience/mini supermarket range, and in particular a good display of fruit and veg, fresh meat and fish. They are true mini Morrisons, interwoven with the trademark elements of the Rontec formats the Costa Coffee; the food/snacks to go; Rontec Radio, which plays in all the stations; not to mention the high operating standards.
Gerald’s modus operandi is all about maintaining tight discipline in all areas of the business. Whether his staff are managing budgets, stocking shelves or cleaning the loo woe betide anyone that doesn’t measure up. He generally goes out on a site visit twice a week, averaging 12 sites at a time, armed with sheets of details about each site’s financial performance, plus mystery motorist feedback. The regular visits mean nothing can get too far off track. As he travels he discusses, with business associate David Davis, the status of each operation, dictating any required action plan into a recorder. As he arrives on site he is greeted by the regional manager, (on this occasion Rachel Woodcock, one of four in the company, each responsible for six or seven area managers); plus the area manager (responsible for 10 sites), and the site manager.
They all follow nervously in his wake as he strides about the forecourt and store, meticulously checking that everything is in order including the freshness of the doughnuts: "We’re in the business of quality and consistency," he says. "The motorist wants to come to a site which is clean, everything working, open 24/7, with a good convenience range and sensible pricing. You have to have a consistent offer."
I was braced to witness the ’hairdryer’ treatment I’ve heard so much about when things are not right and staff get bawled out. Luckily it was a sunny day and all the sites we saw had been scrubbed and stocked within an inch of their lives if only all service stations could look like that! The relief and joy was palpable when the anxious staff got a well-deserved pat on the back from Gerald.
"I know we have a reputation as a very tough company to work for very demanding on standards and detail," he says. "But we’re very good employers. We invest £1.5m a year in training human resource is our most valuable commodity. Staff also get a copy of my book ’Leading from the Front’ and are told to read it! We create a lot of well-trained entrepreneurs!"
Ongoing investment in the Rontec network is considerable in order to maintain, improve and grow the business, and Gerald a property magnate, philanthropist and devoted family man still enjoys squeezing every "nickel and dime" out of it through his eye for detail and instinct for a deal.
The relative immediacy of getting results, in contrast to the years it can take in his property business, is what helps to drive Gerald’s continuing passion for roadside retailing and gets him up in the early hours visiting sites nationwide. "It’s never been about the money," he says, "but the challenge and the excitement. You’ve got to be visionary. It’s a business that is moving forward." And despite being in his late 70s Gerald is not looking to put his feet up any time soon. He’s full of energy and ideas and he even talks of doubling the size of his network should the opportunity emerge: "We’ve got the money to do it. We have the most solid balance sheet in the industry..."
Rontec: was formed in 2011 to acquire the assets of Total Oil UK. Merged with Snax24 in 2015. Part of GMR Capital Group, majority owned by the Ronson family.
Gerald Ronson: chairman & chief executive, celebrated 50 years in roadside retail in 2016. Founder of Heron Service Stations in 1966; and Snax24 in 1992; also Heron International, Ronson Capital Partners, GMR Capital, Gerald Ronson Family Foundation.
Giles Taylor: managing director, replaced Bill Ahearn, who retired last year, but remains on the board.
Pre-tax profits: increased to £22.6m and net worth grew by £140m to £356m in the year ending September 2016. Turnover £1bn, net assets £360m. Operates 241 sites. Launched its own shop brand Shop’N Drive in 2012.
Acquisitions: 36 stores in South Wales and SW England in 2014; 24 stores from Esso & BP in SE England in 2015; 40 sites from the Co-op in 2016.
Awarded: Subway’s ’Best Franchisee in the World’ accolade in the 26-49 stores category.
Charity: Since 2014 has raised more than £600,000 for various charities including Cancer Research, RNIB, Asthma UK and Diabetes UK. Raises money through the Pennies scheme customers can add 25p to their card transactions.