Freshness in Fermoy
Standing proudly on the main Dublin road is the Amber Costcutter Fermoy. Fiona Donnellan met with licensee Dave Ryan and operator Liam Fitzgerald to learn more about the store's offering
Print18 December 2012
PROFILE
Amber Costcutter, Fermoy, Co. Cork
Licensee: Dave Ryan
Operator: Liam Fitzgerald
Size: 2,500 sq ft
Staff: 60 – 30 full-time and 30 part-time
Driving into the Amber Costcutter in Fermoy, one is greeted with a bright, fresh and spacious area. Situated on the old Dublin road, just metres from the M8 motorway, the forecourt and shop advertises fresh food, fuel and convenience shopping. Owned by local businessman Liam Fitzgerald and leased to Dave Ryan, the business has been open since August 2010. In that time, it has become hugely popular with local customers and is pulling in a respectable amount of motorway traffic.
Dave Ryan has been in the retail business for over 13 years. "I had a Centra store for 13 years and a SuperValu store for five years as well, so I’ve been in retail a long time. I started off working part time in the shop at weekends; I didn’t want to work at the farm at home I suppose. I worked with Dunnes for five years, both in Ireland and England. Then I came home and bought the store in Fermoy."
John McAllen, Barry Group commercial director; Liam Fitzgerald, owner Amber Petroleum; assistant manager George Burke and Jim Barry, MD of Barry Group
A new partnership
The site is owned by local businessman Liam Fitzgerald who owns Amber Petroleum and leases out the franchise. The partnership came about after Liam and Dave felt the town of Fermoy needed a full service station close to the motorway. The shop and forecourt was developed from a greenfield site. Fitzgerald says he was confident that the business venture would work and developed the layout and design of the store in conjunction with Ryan. The decision to partner up with Amber fuel was an easy one, according to Ryan: "We knew it was a good site and Liam knew it was a good site. We had some other people interested in it but we felt that Amber were local so we went with them."
A different approach
The focus of the shop is very much on the fresh food offering. A great deal of planning and thought went into the design of the layout. Fitzgerald says they were aiming for the most modern outlay they could work with: "It’s modern, very modern. We wanted to give an eye-catching view to the town. It’s the first place you see when you come into the town. The plans reflected that and we wanted to give them that." The shop incorporates a fresh food deli counter with a large sit down area for customers. It is something that has proven popular with customers and is constantly busy. Ryan says they thought long and hard about the layout: "We designed everything. A great deal of research went into the shop area versus the seating area and all that. Checkouts and location of the deli were very important. All of that was done between Liam’s team and us and it was looked at a number of times to be fair before the layout was agreed. At that stage Barry’s group came in."
The relationship between Barry’s Group, in particular, Costcutter and Amber Oil is well established. It seemed like the logical step for the partnership to continue in the Fermoy operation. Costcutter came in and organised the shop itself after the layout had been decided on.
Local approval
In the two years since the store opened, support from the local community has been very strong. Ryan says the majority of their business comes from the townspeople themselves: "We did some research about a year ago and I’d say the motorway figure has grown since then, but around 70% of our business is local. We are a different motorway station due to the toll, but the majority of our business is local so we get huge support from the community." That support works both ways. Ryan is committed to supporting local producers and does so as much as possible. "Costcutter are very effective at getting someone on their billing system so we deal with local suppliers as much as possible. We’ve a lot of suppliers coming in here. We’ve your everyday bread and cakes, fruit and veg, local eggs and meat. We take Hanley’s pudding from Mitchelstown and Hodgin’s sausages, so a lot of our fresh food products come from local suppliers."
Ryan acknowledges that supporting local businesses is important, especially in today’s economy. "It’s essential in any market, that you can do the best that you can, in so far as you can. They’ve got to be the right product and be competitive as well." Using local employees is also vital for success. Ryan says all his 60 employees come from the local community and surrounding areas. "They’re all local, different denominations but all locals. You would end up with local staff anyway but you try and make sure that you staff from all areas of the town."
Value offering
Competition is essential to the success of the store since it opened. Ryan says "we’re value driven throughout. People want value." While the store does not offer all promotions run through Costcutter, Ryan says the ones they do run are successful. The focus is on value in the fresh food section. The shop offers a number of deals in its restaurant section that have held steady over the last number of years. These include a full Irish breakfast with tea or coffee and toast for eur*5 or customers can avail of a 12 inch pizza for eur*5. Ryan says the deals on food are holding steady: "Our chicken rolls are held at a competitive price, we’re holding value across the board. It’s tough going but we’re holding it."
Ryan says he takes a number of lines of promotions across the store and runs with them instead of clogging up the shop with offers. With limited space, the focus of Ryan and his staff is on the fresh food offering and the footfall that brings into the store. "There are some of the offers that don’t apply to our customers; we don’t have the display space either. We’ve huge footfall in the cake and bakery trade and that’s where we’re concentrating on, we’d sell 2,000 units of our cakes every week."
Working on tight margins is something that retailers across the country are used to. The sale of the National Lottery license next year is a cause of concern to some retailers including Ryan; "The Lotto is tight and the phones are tight. There’s obviously a huge amount of concern that if somebody buys the Lotto license it’ll be less of a margin and they perceive it as we want them more than they want us. As much as we want them, they need us to sell it. It’s a problem and in my view the margin is too tight, there should be more scope there."
The focus of the store is on fresh food
Fighting the smugglers
Forecourt retailers across the country have a battle on their hands when it comes to illegal fuel. The increase in smugglers bringing in the fuel and selling it at low prices is becoming a real problem for genuine retailers. Liam Fitzgerald says it’s the biggest struggle facing retailers these days; "It’s undoubtedly had an effect on the business, you cannot compete with something that’s not right. It’s a problem all over the country, more so in towns." Ryan says the illegal fuel spots pop up in a matter of days and can operate for a short amount of time and do a lot of damage in that time. While he hasn’t had many people coming in yet with damage from illegal fuel, a new service station has just opened up down the road with "very strange prices" and Ryan is expecting the worst in the coming weeks. "We haven’t had people locally coming into us with their cars and engines damaged by illegal fuel but it is a problem we see going forward. It’s definitely going to be a problem no matter what. It’s a live issue now and I’ve no doubt it’s going to be our next challenge."
Fitzgerald is adamant that they not be caught out for the cost of repairing damaged cars from illegal fuel. Some customers, when they realise they have gotten bad fuel, go to a reputable garage and put in a small amount of fuel and then try blame that retailer for the damage and get them to cover the cost. Fitzgerald says they challenge these claims; "We fight it all the way. We’ve gone to mechanics yards; we’ve gone the whole way and challenged a number of situations."
Legislation is in place to combat the distribution of illegal fuel but Ryan believes the authorities are too slow to act on the criminals. "From what I’ve experienced they’re very slow to move. It’s a long process to get there. Legislation is in place but they have to implement it and crack down on it."
Expanding for the future
Despite being open only two years, Ryan is not one to rest on his laurels when it comes to the full potential of the store. A planning application has been lodged for an extension of the seating area and more parking. "We’re more than doubling the size of the sit down area. We’re putting in another food operation, not agreed yet, and we’re putting in another 60 car parking spaces and spaces for trucks and buses – over 1.2 acres of car parking and development."
Ryan says that the site has massive potential for expansion and he believes that there’s a gap in the market for them to grow the operation. "It’s a big commitment from Amber, there’s a big commitment all round, but we think there’s room in the market for it. We’ve got to protect what we have but we’re stuck for space here. Friday, Saturday and Sunday it’s very busy, there’s a demand for evening trade; from 4 o’clock on, and weekend trade. There’s a demand for buses, we get a lot of buses but we can’t cater for a bus of 40 or 50 people here at the moment. It’s a huge business; a lot of stores have it."
Work is due to get underway once the application has been approved. Ryan says it’s important to move with the times in order to increase business. "You have to change; we think we’ve a strong opportunity to grow our motorway business. It’s not as strong as it should be and we’re working on it. We’ve signs up; we’re sponsoring a roundabout; just to get people up here, to get them in. We’re actively trying to increase footfall."
One thing is for certain, the partnership of Fitzgerald and Ryan together will ensure that complacency will not be tolerated in Fermoy.
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