Spar UK is stepping into autumn 2018 on a high. The UK’s leading convenience store group with more than 2,600 stores and a €3.2 billion turnover, has just banked an awe-inspiring summer season.
“Our performance over the summer has been tremendous, helped by the exceptional summer weather and sporting events,” states Spar UK’s managing director, Debbie Robinson. The Spar model, which is all about agility and adaptability, meant the symbol group operator outperformed the market with sales up by 8%+ and in some weeks hitting the heady highs of 20%+ increases.
The growth was fueled, in part, by another Spar hallmark - innovation. The retailer’s Daily Deli concept, which is all about instant consumption, was on the money providing shoppers with chilled soft drinks, savoury snacks, desserts and fruit pots. These were accompanied by new lines including premium gelato ice cream and doughnuts.
“It enabled our retail partners to capitalize on the great summer weather,” Robinson explains.
Strong retailer and supplier partnerships played a starring role too; so that when the CO2 crisis hit in the summer and the Beast from the East brought arctic conditions to the UK in late February and early March, Spar was prepared. “We had great support from suppliers, who were able to really help and get essential food supplies through to retailers and customers,” Robinson recalls.
Spar’s UK performance looks especially impressive given the increased competition in the marketplace and coming from every quarter - convenience, grocery supermarkets, discounters and online.
But Robinson asserts Spar UK welcomes competition. “Competition is good, it raises standards and from a consumer perspective it is progressive,” she says. “We embrace competition and we are finding that the Spar model is really well placed to maximize the strength of the global brand, which our retail partners can flex.”
Crucially, however, Spar UK leverages its global model with a local approach - local retailers driving local initiatives and local offers.
For Robinson, localness is not whitewash for Spar, which is well placed across the whole of the UK.
“We encourage real innovation and it adds value,” Robinson states. “Spar is a global brand with a superb national proposition, enhanced by local flair,” she says.
Localness and innovation enable Spar to stand out from the competition, Robinson maintains. That differentiation, in turn, drives growth. “Spar offers good value and an awful lot of innovation. The supermarkets have become too similar - product innovation and excitement is crucial,” Robinson says.
The convenience chain is ensuring it is well placed to respond to changing consumer behaviour and needs and especially among younger shoppers.
Spar UK has created a Spar Next Generation sub board of 18-25 year olds, who are helping to shape the retailer’s strategy moving forward.
According to Robinson, the panel track and record their food and media consumption, including participation in loyalty schemes, via receipts and on mobile devices to provide strategic insights and actions. Spar UK has discovered younger consumers, for instance, are particularly interested in diet and health and has gone on to remove almost 200 million tonnes of sugar from soft drinks, reformulated snacking products, introduced new flavour profiles around chilli and pork products and reduce salt content. It is currently redesigning its bottled water with a 51% recycled packaging message. These environmental and health benefits are a direct result of input from the Spar Next Generation group, Robinson says.
On a practical level, Spar UK’s digital strategy is driving consumer engagement with events like its Sparbecue initiative, which provided all of the kit for 500 barbecues across the UK in order to showcase the Spar brand’s range of fresh food, wine and BBQ essentials. The aim was to spark impactful social media chatter, using the hashtag #Sparbecue. Five thousand target customers enjoyed the Spar products, as a result of the campaign, but many more were reached by word of mouth. Robinson reports that consumers, including people who did not shop in convenience stores, became advocates for the brand due to the quality of the food on offer.
By format, Spar continues to invest heavily in the single brand Spar. Under that banner in the UK, it operates:
• Spar Express stores, a smaller store format for densely populated areas and focused on providing food for instant consumption
• Spar Market, stores with a fresh fascia and a more modern look, which have a strong fresh foods offer
• Spar, neighbourhood and convenience stores, where tobacco and alcohol are still prominent but alongside grocery and a growing amount of fresh foods and
• Eurospar in Northern Ireland, a larger 4,000sq ft format, which is performing strongly for Spar UK
And it’s a ‘horses for courses’ format approach. “It’s really crucial that we invest in stores,” says Robinson. “There are locations where the larger format is the right thing to do but in other locations small and perfectly formed is more relevant. It’s much more about quality rather than quantity,” she states.
The brand is also represented at motorway service areas and at Euro Garages’ sites, where it has successfully won back its positioning from Sainsbury’s following a trial. “The decision speaks for itself,” says Robinson, who credits the strength of the Spar brand and its ability to work with retail partners to deliver commercially viable propositions.
Convenience retail inspiration is constantly on the radar, Robinson reports.
“Spar’s DNA is to be innovative and we look for new ideas wherever they come,” she says. The retailer also draws on the advantages of being a global organization. The latest Spar International Annual Congress, for example, was hosted in Bangalore, where Spar rubbed shoulders with its retail partners and discovered the latest technological developments including AI, machine learning and analytics. “We look at that technology and see if it’s relevant and can translate to the UK,” Robinson says. “Entrepreneurialism and progressive thinking is really where we are ahead.”
Similarly, Spar International’s entry into new territories including Greece and Cuba recently and South America, Malaysia and Indonesia in 2020, will usher in new concepts and ideas.
For now the focus is very much on convenience and being where the customer is rather than being online. Spar UK already works with the likes of Deliveroo, Collect + and Amazon Locker. These, along with the partnerships it has with Greggs and Subway, are a good strategic fit that offer real benefit and value, Robinson says.
The autumn and future of convenience looks very bright, she adds. Indeed, Spar UK anticipates acceleration in convenience market growth especially for Spar retailers who are offering foodservice, alcohol in-store, seating and great toilet facilities.
“Well invested, smart, modern and experiential stores is where the future is,” Robinson summarizes.
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