Kerry gold

Louis Byrne and Colette O’Sullivan outside the Monavalley store

Louis Byrne and Colette O’Sullivan own Spar Oak Park and Spar Monavalley in Tralee, which have continued to perform well despite the current tough times.

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13 October 2010

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Spar Oak Park
Listowel Rd, Tralee
&
Spar Monavalley,
Monavalley,
Tralee

Owners: Louis and Colette O’ Sullivan
Staff: 26 between both stores

Runing two businesses simultaneously is no easy feat yet Louis Byrne and his wife Colette have been doing just this for the last four years. Luckily for the Byrne’s their two businesses Spar Oak Park, Tralee and Spar Monavalley, Tralee are only a mile apart so they can work between the two stores with relative ease. The couple previously ran a Statoil forecourt which they began leasing in 1996 and BWG were the suppliers for the shop. They sold the lease on that in 2001 after five years when BWG made them aware that one of its existing clients Mary O’Halloran in Oak Park was retiring. “We wanted the opportunity to own a store outright as opposed to being tennants and although the forecourt was very good to us and it’s where both of us cut our teeth in retail, there was always an end plan to own a store.” Spar Oak Park had been in existense for about 25 years before they took it over in 2001. It was about 1,400 sq ft and had quite a strong turnover but there was little to no fresh food participation.

Growing Oak Park

With an already strong reputation for customer service, they grew the turnover in Oak Park over two years. In 2003, when the turnover had climbed significantly they did a complete revamp and gutted the store. “We managed not to close bar one cold day in January when we were replacing the roof on the building.” They increased the size to about abour 2,000 sq ft with the new space very much dedicated to increasing the size of the deli.

Branching out

In 2007 they felt it was time to expand when a second store came on the market. It had formally been a Centra so the Byrne’s bought it and it became Spar Monavalley. When they took over it was 1,900 sq ft and they did a small revamp while at the same time putting the new image into the Oak Park Store.

Both stores are well situated with Monavalley directly opposite a Fas Training Centre and Oak Park very close to the north campus of Tralee IT so the food side has always been very important to both stores. “When we took over Monavalley in 2007 the deli participation was low, 7%, and it’s now at 16% and climbing so that has had a very positive effect on the profitiabilty of the store.”

spar3 In 2007 they also introduced Spar’s new food concepts like the Signature sandwiches and the Treehouse juice bar which are still in operation today. “The Tree House isn’t doing the same amount of business it was doing in 2007 but through fairly heavy tasting and promotional campaigns, we managed to keep the students hooked on their smoothies. We’ve had to downsize to give a much more competitive price on the portions,” says Byrne.

Monavalley is situated in a working class area of the town, an entirely different demographic to Oak Park yet Monavalley has shown growth over the past year.

Deli dilemas

The hot food side of the business saw a dip in profits like every other business when the economy deflated. “The builders weren’t there in the mornings and it took quite a bit of work trying to rebuild some of that deli business but we are happy with how it is going at the moment. We’ve changed the offering somewhat and we’ve recently introduced in-store baking using Puratos. We are now producing our own breads, scones, cupcakes and muffins. It’s a bit more of a back to basics offering of the traditional loaf as that’s what the consumer seems to want. It’s working very well for us and we’re finding that it’s building steadily week-on-week at the moment.” They do all the baking in the Oak Park site for the two stores after buying the site beside the store and installing a temporary commercial kitchen while waiting for planning permission to extend the store. “We are in the process of getting planning permission for a knock down in Oak Park when the economy bounces back a bit. It would be a complete demolition of what’s here in order to get the store up to about 3,000 square feet.”

Staffing issues

The Byrne’s have been fortunate in that they haven’t had to lay off any staff directly and are employing 26 staff between the two stores. “We’ve had a natural downsizing in that we had a couple of girls that were out on maternity leave and decided not to come back and we had quite a few of the foreign workers whose partners had lost work and were relocating home. We just didn’t replace them.”

Both Louis and Colette work in the stores. Colette works three days a week as they have three young boys aged nine, eight and three. Louis works between both stores. “I’m pretty much hands on. We have a general manager, Julianne Fitzgerald, who has been with us for 12 years. She came with us from the service station side of it. She looks after the whole operation and then each store has its own store manager as-well. I think over time there will be opportuniutes to extend the company – maybe a third or fourth store but the way the climate is at the moment the stores would need to be existing stores. I wouldn’t go into a green field site.”

Tough competition

Competition is very stiff especially in the Oak Park area. Within a few hundred metres of the store there is a Subway sandwich bar, a Carry Out off-licence, a Gala that has recently been refurbished and a Daybreak. Within the town itself, there are two Tescos, two Dunnes an Aldi, a Lidl and a Buy Lo so competition is something they have learned to accept. In saying that, Spar’s own offers are making life a bit easier.

“Spar’s own brand is giving us the opportunity to compete with the likes of the Buy Lo and the discounters.We are doing about 7/8 times the promotions we were doing 3/4 years ago.

“Everything is a special offer , a bogof (buy one get one free) or a 50% off or an imported line. There are a huge amount of special offers and without them we would see the turnover slipping dramatically. The buyers within all the wholesalers have become key people because if they are not buying right, we can’t sell right and we don’t have a business.”

Although margins are very tight on promotional lines they would hope that the customer will pick up some non-promotional lines while they are in-store but this doesn’t always happen. “Unfortunately in the last twelve months, what we have seen is a trend where a customer will come in with the Spar special offer leaflet and buy the 5/6 items that are on that and also have the Centra special offer leaflet and they’ll go down the road to that shop and buy all their offers as well.”

spar6 However Louis says that their immediate customer base has been very loyal to the store. This is probably in part due to the fact that they are very involved in the community by sponsoring the local GAA team for the past five years.

“There is a lot of demand for sponsorship and for charities and it’s very hard to know where to draw the line. We would always take the view that if it’s a local community based beneficiary, you need to look at the bigger picture and be as geneous as you can be within reason.”

Business realities

Tralee has been hit like any other regional town over the past few years with many retail outlets now lying empty in the town centre. Louis believes that rates are too high. “Some of the rents that the landlords were looking for were outrageous and they just didn’t seem to be playing ball when it came to rent reviews. There is a lot of vacant retail space in the town center. We’ve looked at sights where the rent has decresed by 25% but needs to fall by another 20% before it’s viable.”

spar7 If anything Louis says the wages are what would prevent them from expanding and from taking people on. “I know many people here would be happy to work for a little bit less but we’re not in a position where we can pay them any less. We’d be able to spread the work out over more people if they weren’t such an expensive overhead. I think if we abolished all the JLC rates across all industries and let the market decide we’d be far more competitive.”

Even though the Byrne’s are in a good place compared with many of their counterparts, they won’t be able to keep trading at this level if factors such as rents, rates and wages don’t change. “The business has been good to me so far but if it gets any harder I think we will have to look at our options. We are working very hard to keep things on an even keel. When you stop pushing forward you go back very quickly in the current climate.”

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