Powering through
Faced with a high level of local competition, Costcutter Carlow has managed to drive sales since opening on 1 September 2011, by offering a strong value proposition
Print19 September 2012
STORE PROFILE
Costcutter,
Tullow Road,
Carlow
Store manager: Jason McSteen
Store supervisor: Brendan Delaney
Size: 6,000 sq ft
Staff: 16; 10 full-time and six part-time
With an Iceland on its doorstep, a Lidl across the road and an abundance of convenience stores in the locality, Costcutter Carlow has had to work hard to convince shoppers that its threshold is the one worth crossing in their ongoing quest for value. Fortunately store manager Jason McSteen is not a man to shy away from a challenge and since opening up on 1 September last year, sales at his Costcutter have increased by an estimated 25% – 30%.
A key part of this success can be attributed to the store’s focus on value, yet securing the right layout was also essential in creating an environment that shoppers would consistently want to visit. The Barry Group’s store design team and department specialists such as for the fruit and veg and deli categories, were instrumental in helping Costcutter Carlow to attract greater custom. “We all got together and decided what way we were going to lay out the shop and what the area needed. We looked at the trends of how customers were purchasing in other businesses,” explains McSteen.
Driving the value message home
“We decided that we needed a power aisle, a big promotions aisle that would compete with any of the other retailers in the area and that would show that this store has value and that it wasn’t just another convenience store; that there was a difference under the Costcutter brand. As you come into the front of the shop, all you can see is value signage and that message has worked.”
The manager and his team have invested a lot of effort in ensuring that this value message is not just evident on the shopfloor moreover. Costcutter Carlow uses an advertising trailer with six ad boards to highlight the store’s special offers. By parking the trailer in various areas around the town, they are doing their best to literally drive home the store’s value perception. There are also two large banners and three ad boards on the busy roadside outside the store. What’s more, Costcutter Carlow drops 6,000 leaflets in the area and advertises in the local newspaper every three weeks. The message that Costcutter can compete with multiples and discounters is starting to reap dividends but McSteen adds: “I still think we have a lot of customer habits to change in that he haven’t fully got the value message of how strong we are out there, but you can see by our sales, that it is working so far.”
Off-licence to thrill
Another factor that has helped drive sales at Costcutter Carlow is its successful off-licence department. Shortly after being appointed store supervisor, Brendan Delaney noted there was “room for improvement” in this area. The store subsequently contacted the Barry Group’s off-licence specialist who helped revamp its alcohol offering. “They’ve been crucial in our sales development; since the start of the year, we’re up 30% which is huge,” says Delaney, who explains that the wine section was expanded and display barrels were added. These are currently being frequently shopped, as is the beers section.
On this subject, McSteen adds: “I can’t say enough about Barry’s and what they’ve done for us. You just have to ring and ask for something and it’ll be emailed to you or Alan the rep will be in with you or the specialist from the off-licence will come in. We’ll say look we’re struggling, the off-licence in the town can do this offer, we need to get it somehow or have something close to it. By the next delivery we’ll be able to have that offer.”
Deli delights
The deli is another strong sales performer at the store. “We’ve picked two promotions to drive the deli and have expanded our range,” explains McSteen. The prominent chicken fillet and breakfast roll deals both boast a tempting price of just €3. These deals have been advertised strongly outside the store to attract footfall. The deli staff are then “focused on getting the add-on purchase whether it’s the wedges for a euro or chicken wings or an extra sandwich or muffins or biscuits from the bakery.”
Area manager Alan Hogan notes that the deli is an “important driver of margin” and that the team at Costcutter Carlow have constantly played to their strengths where margin is concerned. “They’re continuously looking at their costs, keeping wages costs to the recommended best practice and looking at other costs in the store, whether it’s refuse collection, or energy, and making sure that they have the best and cheapest suppliers.”
Managing to excel
It’s perhaps not surprising that store manager Jason McSteen has the ability to excel in these areas, given the broad range of experience he has accumulated over his years within the grocery trade. Indeed, he first started off working part-time at Superquinn Carlow aged just 16. Shortly afterwards the supermarket sent him on an all expenses paid two-day training programme with 20 employees from different stores. This was to have a major impact on McSteen’s career path; instead of going on to study science as originally anticipated he embarked on a career in management.
During the two day programme, McSteen says he was “taught to pride ourselves on customer service; they gave us the whole philosophy behind Superquinn and for a want of a better word, you were brainwashed. When a customer said something to you, you reacted the way Superquinn wanted you to react.” This ethos proved convincing enough to change his plans. While he emerged from college with a certificate in business, he still worked at the supermarket part-time all through his studies. On leaving, he secured the trainee manager position at Superquinn Carlow and progressed through Superquinn working in Carlow, Kilkenny, Finglas, Walkinstown, Bray and Blackrock as an assistant manager.
Striking out on his own
On leaving Superquinn seven years ago, McSteen resolved that he wanted to open up his own shop. A colleague had opened a Fresh supermarket at Dublin’s Grand Canal and shortly afterwards a new Fresh opened in Malahide where McSteen was appointed store manager. However after six months, the owners decided to run Fresh as a chain rather than offering franchises. This didn’t fit in with McSteen’s ambition so he decided to leave and became an area sales manager dealing with the multiples for Breo Foods. He stayed there for two and a half years before Kerry Foods bought the company over and he was made redundant. At this point he moved to Costcutter Rathfarnham where an old Superquinn colleague of his, Aaron Massey was based. He was introduced to many Barry Group colleagues and specialists during his two year tenure as store manager at Rathfarnham and so when an opportunity to run his own Costcutter store in his home town of Carlow arose, he eagerly took up the reins.
No manager could have a successful store without having a dedicated team behind him though. In this respect, store supervisor Brendan Delaney, who had previously worked at Dunnes Stores for four years before moving to the Costcutter comments: “We’ve great teamwork. You ask anybody in the store to do something for you and it’s done straightaway, there’s no questions asked. Everybody’s a team player and I’d like to think everyone enjoys working here.”
The secret to success
The Barry Group’s secret shopper programme which involves three individual audits, has helped improve the team’s offering even further. As Barry Group’s Alan Hogan explains: The secret shopper programme in a nutshell, looks at the shopping experience through the eyes of a shopper. It looks at customer service, if there is value in the shop, what are store standards like, what’s merchandising like, it also marks the store on product availability, so it’s exactly what the customer sees. This store in particular has implemented the suggestions and implemented them very quickly and that has driven profit. In an environment that’s very difficult, that has been very significant in driving turnover.”
McSteen agrees that the audits provide a useful tool that can help retailers improve their businesses. “While we were very strong on some points, at the first audit we had a lot of improvement and we’ve worked on that and you can see in the recent secret shopper audit that we focused in on our customer service. Now it’s a key point for us that our customer service is 100%. Customer complaints, although very few are made, are dealt with there and then. If a customer requests a product, we will chase it up with reps, Barry’s, cash and carries, anywhere to get the product in for them and ensure that they’re not going somewhere else and that we are the one-stop shop for customers.”
Constantly trying something new
Trying new concepts and ideas is crucial for McSteen who is always keen to take staff suggestions onboard and likewise stocks a broad range of local products. Looking towards the future, he comments that a scratch bakery is a possibility “further down the line” and that for him, constant improvement is a must. “Every week we’re tweaking something; we’ve put a lot of work in during the past couple of weeks on our wines and we’ve seen a growth in the wines department because of that. So we can’t stand still; we always have to try and tweak things to grow the business.” With this mentality firmly in place, the store’s current impressive growth appears set to continue.
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