Distribution to the masses

Barry Group managing director Jim Barry and Holly Barry showcase a selection of products available as part of the group’s new chilled distribution solution

The Barry Group has just launched its new chilled distribution network following nearly two years of planning and investment. Fiona Donnellan met with managing director Jim Barry to learn more

News

15 October 2013

Share this post:

The Barry Group is a cemented player on the Irish grocery scene. Founded in 1955 in Mallow, Co. Cork, the company operates the Costcutter, Quik Pick, Buy Lo and Carry Out symbol brands and also provides a central billing facility to over 235 affiliated stores across the country. It is also part of the Stonehouse Group which strengthens its buying power for customers. The group has just rolled out its new chilled distribution solution to its network of retailers across the country. The solution, representing a €1 million investment, follows 18 months of preparation and a month-long trial in-store.

Ahead of its time

Several of the major retailing groups have introduced chilled distribution in recent years. However, this is not Barry Group’s first foray into the arena. "It’s our second effort at chilled," says managing director Jim Barry. "Going back about eight years ago, we attempted to put a chilled distribution system in place and, on that occasion, we built a warehouse and we had all the trucks bought. Two suppliers at the last minute wouldn’t co-operate with us so we had to park the project. So it’s really our second time trying chilled." Barry says that the distribution and warehouse are being taken care of by a third-party provider. "We have a very high-quality, international standard, third-party provider that’s providing the warehouse and the transport for us. We have had a team of 12 people working on this project for 18 months."

Despite the failure of the first attempt at chilled distribution, Barry is adamant that this is the way forward for the group. "The market has changed a lot in the last few years and other people have introduced central distribution since so now it’s become more of a standard practice in the industry. Even though it’s still a huge project; it’s definitely the right thing to do, which is what we felt eight years ago."

: Jim Barry’s Barry Group operates the Costcutter, Quik Pick, Buy Lo and Carry Out symbol brands

A changing market landscape

The Irish grocery retail market is a very different place from eight years ago when the Barry Group first attempted to roll out the chilled project. The economic situation, the rise of discounters and changing trends of shoppers have made the market a much more competitive place. Shoppers are looking for the best range of products they can get with the best value possible. Barry believes that these factors are making the central billing system almost obsolete. "From a retailer’s perspective, it’s getting harder and harder to get a credible range of products through the central billing model because more and more suppliers are finding it hard to make money through their van sales. I think it’s come to a stage where central billing is almost a thing of the past and the next thing is central distribution."

The failure of the group’s first attempt at chilled distribution may have been a blessing in disguise. In the intervening years, the group has developed its brand and concentrated on its business. "We’ve a much larger business than eight years ago," says Barry. "We now have more volume which will ultimately make the project more likely to be a financial success. Also the central billing service for retailers has gone backwards. For independent retailers, and for our customers to compete, they need to have an extensive range of products so what we’re doing now will hopefully make it easier for them to compete in the marketplace with both a better price and a broader range of products."

Barry believes that the group has learned from its experiences and says he’s not afraid to try it again. "I suppose you learn if you try something out and you can’t be afraid. We’ve learnt a lot in terms of our approach with suppliers. We were very sure in terms of supplier support buying into our model and they had confidence that we were able to deliver as well because some of the other people who have done chilled distribution, their sales have gone into decline."

Better prepared

Barry Group is not the first retailer to bring a chilled distribution system online. Several other retailers have well-established systems in place. However, Barry believes it has been able to watch its competitors roll out chilled distribution projects and pick up on mistakes that have been made. "I think we’ve come at the right time. Two of our competitors have been rolling out a similar project in the last 12 months and we believe that we have a far superior proposition for our customers. We could see what they did and we believe there are lots of errors and mistakes made. We’ve looked closely at what they’ve done and think that ours is a superior offering, especially from a retailing perspective."

The new system has been rolled out with almost a full range of products. The initial phase has over 2,500 products which will be increased to 3,000 in the coming months. "We see nine categories in total across the whole chilled sector and we’re starting off with seven of them. We’ve left flowers and fruit and veg until phase two but all the other seven are ready to go. By February we’ll have the full offering." Barry says that ensuring a good range of products is available will be essential in making sure retailers get behind the new solution. "I’m convinced that this is the right way forward and our customers are really buying into that mindset. The vast majority of Costcutter retailers fully understand where the market needs to go."

Simple solutions

Barry is particularly proud of the project’s IT system. The application, which is called Beacon, was specifically developed for the retail industry and gives the retailer increased business intelligence when placing orders through the Barry Group. Beacon has a number of advanced options such as providing the retailer with information on top selling products across the Costcutter network, up-to-date RRPs and the ability to set up repeat orders. The group says that this is all aimed at allowing retailers to streamline the order process and concentrate on other elements of their business. The managing director knows that the application of a user-friendly IT system is essential to the success of the project. "We’ve a very easy system for our retailers to operate. We genuinely believe that we have a best-in-class IT solution which is critical from a retailer perspective when it comes to managing prices and doing the ordering. All our stores have an iPad and it’s loaded with a very easy ordering process."

Barry says that retailers have reacted very well to the updated IT system. "Some people would be nervous when it comes to IT, some older people, but once they’ve been shown it, they’re surprised by how easy it is. It’s so easy that anybody could use it and that was very important because some of the retailers were a bit nervous about using the new system and I can understand that. One of our competitors has a very difficult ordering process and it’s turned off a lot of retailers so we’ve looked at what the other guys are doing. It’s a huge advantage rolling this out after some of the other groups, a huge advantage."

Attracting new retailers

Barry is confident the addition of chilled distribution will attract new stores to the Costcutter brand. The group currently has a network of 130 stores under the Costcutter banner. "We’ve very high expectations of our sales numbers from this project. There’s no doubt that there will be a number of independent retailers who would have a huge challenge in getting the required stock; we’d be happy to talk to those people. I think it will lead to a lot more recruitment in Costcutter and there are other groups out there that don’t have that option at the moment and those retailers will have to question their future and how important this is."

The Barry Group works with suppliers who are dedicated to providing quality food and drink ranges

Despite the economic climate, Barry feels that now is the right time to add to the company’s network of stores. "There’s always risk in business but I think it’s a very sensible risk. Ultimately what we need to have are retailers who are making money. It is a €1 million investment which is quite a lot of money for any business at this point in time. We believe it’s necessary for our customers but on the other side it’s going to open up huge sales options for us as a company."

Tried and tested

The rollout of chilled distribution has been carefully tried and tested. A month long trial was held in nine Costcutter stores across the country in September. The stores involved were across all the three formats; convenience, supermarket and food store. There is a team of 12 people dedicated to the rollout of the project and Barry Group representatives will be in-store and on-hand during the first few weeks of the official rollout. Representatives will be available in-store while retailers are placing the orders, in the warehouse when the order is being put together and back in-store for when the order is delivered. The system runs on a three-day rotation which will also improve the carbon footprint of the grocery supply chain.

A number of new concepts are being rolled out in Costcutter stores across the country, including new coffee, deli and bakery concepts

Plenty of ideas

There are several plans in the pipeline for the Barry Group. Jim Barry believes that the success of chilled distribution will only enhance future offerings. "We’ve got some very good Costcutter stores out there and the range is now going to be enhanced. It’ll save the consumer money. We’re also rolling out a new coffee concept, we’ve a new deli concept rollout, there’s a new bakery concept so literally anything that somebody could possibly want, we’ll have it in Costcutter. I think one of the gaps out there is high quality ready meals. It’s our intention to have recipes done for us specially. We’re currently talking to chefs about menus. That’s something that we will crack early next year."

The group is hopeful to have around 200 customers operating on the chilled distribution system in the next 12 months. The Costcutter own-label is set to be increased and a new own-label for independent retailers is also being created. The Irish grocery market is ever-changing and it looks like the Barry Group is ready to lead some of those changes.

Share this post: