SPAR Scotland is “flying as a business at the moment”, with strong double-digit sales growth in the year to date being achieved across the group’s 104 company-owned stores and 203 independent SPAR stores.
The upbeat announcement was made by Colin McLean (left), CEO of SPAR Scotland’s wholesaler and retailer CJ Lang & Son, at the company’s Tradeshow in Aviemore yesterday (28 September).
Some 870 guests – a record number – attended the event, which featured business updates from SPAR Scotland senior executives, presentations from SPAR retailers, a tradeshow with more than 200 supplier stands, and a gala dinner at which the SPAR Scotland Awards were presented.
Although full financial results for the year to 30 April 2023 will not be confirmed until next month, McLean was able to report positive growth in sales and profits. As a result, the board has signed off a further £10 million investment in the business in its new financial year. The investment will be put into systems, stores, vehicles and distribution. “We’re on an exciting journey!” said McLean. “We’re doing well and learning a lot.”
The business is in the right market sector for future growth, with sales through the convenience channel predicted to grow from £50.1 billion in 2023 to £61.9 billion in 2028 (IGD). However, McLean warned that through a combination of rising fuel prices, the annualisation of rising inflation, the introduction of Prime soft drinks, and vaping, market conditions in the company’s second half were expected to be tougher. To put SPAR Scotland in the best position to withstand market challenges and capitalise on opportunities, the CJ Lang senior management team continues to focus on improving its overall customer offer.
Barista Bar, the biggest coffee brand in Northern Ireland – owned by fellow SPAR wholesaler Henderson Wholesale – has been taken on exclusively in the convenience channel in Scotland by CJ Lang. Costa Coffee machines will be replaced with a Barista Bar in all company-owned stores over the next 15 months, and independent SPAR stores are also being encouraged to transition to the new proposition.
David Sands, chairman of David’s Kitchen, which has four stores and is planning to build a fifth (in Bo’ness), said: “I believe that coffee is the most important product that convenience stores sell. If you speak to the retailers in Ireland, and hear about the margins they’re making, they’re a lot higher than we’re making, so I would suggest we all look quite carefully at our coffee offer.”
Across SPAR Scotland, food to go “has got a key part to play in making 30% the new 20% [average overall retail margin],” said McLean. An enhanced ‘food-to-go 2’ proposition – which includes freshly-made baguettes and sweet treats as well as a full breakfast menu – was put into the company’s SPAR Garthamlock store six weeks ago and sales have already doubled. That ‘food-to-go 2’ format will be rolled out to other selected company-owned stores shortly.
In addition, January 2024 will see the introduction of a new loyalty scheme, ‘More for More’, across independent SPAR Scotland retailers. Based on Blakemore’s successful ‘Stock and Sell’ initiative, ‘More for More’ will reward retailers on a quarterly basis with free stock in return for commitment to several key measures. The free stock will be worth up to £10,000 annually for each store.
Technology is another key focus for CJ Lang. SOLUM electronic shelf labels are already being used in 39 of its company-owned stores and will be rolled out across all 104 stores over the next 18 months. This will save an average of eight hours per week that would otherwise have been used by staff pricing products manually. CJ Lang’s partnership with SOLUM also extends to a trial of its digital LED screens in-store and use of its AIMS (advanced information management system) solution to manage pricing centrally from head office. Graham Murdoch, IT director at CJ Lang, said: “I think this is the single biggest technology investment the company has ever made, and the return on investment will probably be greater than from anything else we have done.”
Also new in the technology arena is the SPAR Scotland IndyTrack data portal, a sales analysis tool developed in conjunction with TWC. Suppliers who have a local joint business plan in place with CJ Lang, and those independent SPAR retailers who provide CJ Lang with their EPoS data, will get free access to the platform, which includes information on category performance, brand performance and range gaps.
Trading director Richard Collins, who confirmed that he is to retire later next year, urged suppliers to help CJ Lang offer SPAR Scotland shoppers good value. “We are in a period of sales deceleration and we need to ensure we are able to pass on the savings to our customers quickly. Some of our key suppliers were very quick to ratchet up prices when oil and other commodities were on the rise. It would be nice to see those same suppliers ensure that the commodity price falls we are seeing now make their way to the shelves in our stores.”
Citing strong sales growth with many impulse suppliers, in particular Coca-Cola and Red Bull, Collins recommended that other suppliers set ‘breakthrough’ sales growth targets and push hard to achieve them. He also encouraged suppliers to join forces with SPAR Scotland to bring NPD and exclusive products to market: “The multiples don’t always have to be first. It does sometimes feel that we’re second-class citizens. Please consider convenience as part of your launch strategy and, better than that, come to SPAR UK to launch with us first in the channel.”
Although CJ Lang did have problems supplying some products – particularly confectionery lines – to SPAR Scotland retailers during the summer, it boosted its inbound availability in the first 20 weeks of the year by around three percentage points against the same period last year. “We have made good progress but we know we can do better,” said Collins. To the suppliers directly, he added: “We’re investing a record £2.2 million with RELEX to put in place a world-class forecasting and demand planning system to provide you with improved stock forecasts 90 days out, take slow-moving stock out of our business, rationalise the number of suppliers we deal with by removing duplication, and place orders with you in a much more efficient manner.” He added that the company is currently trialling the RELEX system with 10 suppliers, having gone live last week, and more will follow soon. Company stores will go live in the new year.
Collins concluded: “There’s a lot going on but there are still some huge opportunities for us all to grow in this most dynamic of channels. We’re always open to ideas. Back convenience. Back Scotland. Back CJ Lang!”
Other news and updates from CJ Lang:
• All four SPAR wholesalers in GB (CJ Lang, Appleby Westward, Blakemore, and James Hall) will run a ‘Big Deals of Christmas’ campaign from 5 October until 3 January. There will be one special deal every two weeks, and these will include Absolut Vodka 70cl at £15.99 and Doritos 150g at £1.49.
• 50% of products on SPAR Scotland store shelves are sourced from Scotland.
• CJ Lang is now offering its employees double discount (up to 20%) off all products in its SPAR stores.
• SPAR signage was removed from 12 stores in the last six months because the retailers were not adhering to the required ‘grow or go’ standards.
• CJ Lang is working with an energy consultant with the aim of reducing emissions and energy consumption at SPAR Scotland’s Dundee distribution centre and head office by around 20% in the next two years, with various options being scoped, including solar power and voltage optimisation.
• The 2024 SPAR Scotland tradeshow will take place on 26 September in Aviemore.
Published Date: September 29, 2023