Divide and conquer
Building a retail empire is not for the faint-hearted in the best of times but business partners Kevin White and Colin Byrd are in their element this year. CAROLINE BYRNE visited their new Spar on Pearse Street, their first step to Dublin domination
14 August 2009 | 0
Spar, Pearse Street
Owners: Kevin White and Colin Byrd
Manager: Gerrie Kotze
Size: 2,000 sq ft
The corner site that houses the new Spar on Pearse Street was a long time in the making and had the locals wondering what, eventually, was going to appear there. Formerly a pub, the new upper stories of the site contain apartments, while the ground floor and basement are now occupied by the brand new 2,000 sq ft Spar. A fortuitous development for the neighbourhood and, all going to plan, for business partners Kevin White and Colin Byrd also.
White and the store’s manager, Gerrie Kotze, talked to ShelfLife about how the Cork-based duo established their newly won retail empire, and how they plan to capture their next and biggest conquest, Dublin city.
Both with successful and varied careers in retail management behind them, including a stint in the Supervalu group, Byrd and White decided it was time to take the plunge and start making money for themselves. With that, they formed a partnership and got straight to work setting up their portfolio, in a marathon of openings that took the total up to seven stores in less than three years. With three Spar stores, including a green field forecourt site, a 15,000 sq ft Eurospar, two independent off-licences, all based in Cork, and their newest addition in Dublin, they now employ around 170 people.
The value of volume
Although originally from the UK, White has lived in Ireland for some 10 years, and his Cork lilt tells that he’s now very much at home in the county. Having based all of the businesses there to date, choosing a Dublin site was an inevitable progression however; a step only taken once the partners were confident it could be done right.
“The volumes here are massive and, if we do it right, the value we could achieve would be absolutely astronomical,” says White. Pearse Street and its surrounds sums up the potential the pair sees in the capital city. A high density of existing offices and residential spaces packed into small areas, and everywhere around development expanding the pool even further.
“There’s huge scope for development in Dublin and there’s huge potential in this area. We went in at a very weak time in the market, which is a good time to go in, and we believe that this is a very good site,” he explains. As well as local residential and office trade, mostly emanating from directly behind and above the shop, big companies such Google and newly arrived Facebook a little further away pose huge potential for the business down the line. In addition, White points out that the completion of the Lansdowne Road Stadium and the new Arts Centre at Grand Canal Square will also greatly increase traffic on neighbouring Pearse Street.
Such is the potential of Dublin and its volumes that White and his partner fully intend to seize more sites as soon as the opportunity arises, especially while the properties are going cheap. He also notes that with the recession is taking its toll on pubs and restaurants, picking up sites with a licence already attached is a boon for retailers looking to expand these days, and the licences are often coming for half price.
Off to a steady start
Getting back to the here and now, White is very pleased with the new site’s performance so far. Manager Kotze adds that trade has really started to pick up now that the store has been open for just over three months, as people are becoming aware of its presence. Both acknowledge this is the first hurdle for any new business in such a busy city centre location.
By far the top-selling department, the Tim Horton’s coffee and confectionery stand has surpassed White’s expectations, and he had absolute faith in the concept to begin with. “Dublin is really Insomnia, the way Cork is all Bewley’s, but we decided to go with Tim Horton’s because that’s what we have down in Cork.
“When we made the decision and changed over [from Bewley’s], we increased our coffee sales by 50 to 60%. I’m not a big coffee drinker myself but the thing that people like about Tim Hortons is that you’ll drink a cup and then you can drink another cup, and then you’ll drink another cup in the afternoon, because it’s not bitter. It’s a very moderate flavour, a very drinkable coffee.”
Accordingly, sales of coffee and doughnuts at the new Spar thanks to the Tim Hortons counter have grown organically to become a “huge” proportion of the business. “I can’t believe the figures,” says White, “the individual concept is the best-selling concept that we have in the store. We sell about 500 doughnuts weekly.”
Other constituents of the food-to-go offering are also growing, although somewhat more slowly. “Kitsu Noodles is a very good concept,” says White, although he admits it isn’t paying for its space yet, moving only 30 to 40 units a week. He has high hopes for its growth over the coming months however, when the team begins to market the store’s hot food. “The product is superb and the price point, at €4.99, is amazing. You don’t even realise what you get for that money. And it’s a point of difference from our competitors as well,” he adds.
The hot sandwich counter, signed by illuminated menu boards, is doing better trade, largely on account of its convenience. “It’s very handy that they’re all pre-made, then you can have any paninni, wrap, ham and cheese melt, and be in and out probably in no more than a minute and a half,” says White.
Kotze affirms that the hot sandwiches are moving well and growing all the time, and this is without having lifted a finger to drive business. White adds: “This is the quietest time of the year, with the college shut, and without doing any advertising.” So the organic growth to date is more than satisfactory.
Divide and conquer
The partners were happy to allow the new store time to find its feet before starting the push and as such kept the offering concise and the marketing minimal, up to now. With the store’s first three months now behind it however, the time has come to convert potential into real money. “As far as Pearse Street itself goes, we get a lot from this side of the road but we’re going to start moving up to the top of the street and down the back of Grand Canal to where other offices are, in the next couple of weeks, just to see what we can get out of that.”
Now, says White, is the time to get the show on the road, as he sees ample opportunities everywhere for drawing in the punters. “We’re targeting a little further a field now and we’ll be dropping the monthly handbill, starting with about 1,500 in two weeks time,” White explains, speaking specifically about the residential and office spaces around Barrow Street, home of Google’s headquarters and the famous Eurospar flagship store.
The new Spar plans to lure the local office population with two-weekly lunch specials, including sandwich and free mineral offers, “Basically cutting 25% off core products. A lot of people do it but they do it on things that people don’t want to buy.” White adds: “It’s the same thing we’ve done in Cork over the past two to three months and it’s paid dividends, it really has.”
Leaflet drops also inform potential customers of the store’s wide range of ‘Euro Crunch’ offers, including core branded grocery lines such as: Triple Velvet four-pack for €2; Green Isle frozen chips 900g for €1; Surf 800g for €2.39; in addition to meal deals, such as a chilled chicken and coleslaw baguette plus Volvic 500ml for just €2.
Once again taking learnings from their Cork stores, Byrd and White have found a great benefit in doing two-weekly leaflet drops, even though the promotions run on a four-week cycle. “After week two people forget about them so you need to re-energise it and just remind people. So we cherry-pick another 15 products, re-do all our advertising in-store, as well as the monthly ones that we keep up, and it works. It’s working really well for us.”
Bringing home the bacon
The ultimate plan for the Spar on Pearse Street is to build a full commercial kitchen in the 2,000 sq ft basement and become a provider of hot and cold meal solutions, and a fully-fledged caterer. The latter market, White observes, remains largely untapped by all neighbouring food businesses and potentially could become the mainstay of business at the site. Once more, the partners already have a successful working model in Cork, particularly in their 15,000 sq ft Eurospar, from which to draw a blueprint for Pearse Street.
“What we have here now is pretty good but what we have in our stores in Cork, what we’ve developed, is paying massive dividends,” says White. The ability to offer a fully-prepared hot meal for just €4.99 regularly draws queues 25 customers deep. And in addition to pulling in volume, making their own food allows for better margin too.
The catering offer includes a range of platters from sandwiches to hot food, including Indian cuisine, and caters for everything from corporate functions to private domestic parties.
“We need the economy to pick up a little bit first,” says White, “so we’ll start by building up a reputation and then we can approach offices and let them know what we do.” Byrd and White’s Eurospar in Cork catered 30 to 40 functions in the last four weeks before our interview, thanks simply to “word of mouth and just a small bit of advertising.” White smiles, “And Dublin will be 10 times bigger.”