ShelfLife visited Daybreak, Claremorris, to learn how husband and wife team Caroline and Brian Higgins are surviving in one of the most competitive towns in Ireland
13 October 2009 | 0
Claremorris in Co Mayo is a unique site. At one time every single symbol group was represented in the town, all competing aggressively with each other for custom.
Just recently however, the fourth of these businesses has been forced to close, as footfall has dropped off and, probably more significantly, as the massive Tesco Extra opened just outside the town in late 2007.
Hard as it is trying to survive in the current economic maelstrom, try keeping afloat in a small town in the west of Ireland with a 30,000 sq ft global retail giant flogging cheap booze and petrol just down the road; especially when your c-store is attempting to run a forecourt too.
Higgins’ Daybreak responded at first the way most probably would, and have. “We were actually going to throw in the towel at one stage, things got so bad here,” says Caroline Higgins, describing the financial pressure their store, and indeed all food retail businesses in the town came under with the arrival of Tesco.
However, having worked hard to build up the business over 12 years, the Higgins were not prepared to let their livelihood go without a fight. After sitting down and discussing their position with their territory manager and others from their wholesale partner Musgrave, they decided there were definitely enough positives to make a rescue attempt worthwhile.
First of all, they cut costs by reducing staff levels and increasing their own working hours, which went some way to remedying the balance sheet. More importantly for the store though, they undertook a significant revamp with the aim of stripping out more operational costs, implementing new category management strategies, and generally repositioning the store to present a good value offering to consumers.
Making the investment in this climate was a bold move, most especially because of the iron fist currently cutting off the supply of vital credit to businesses like Higgins’ Daybreak. Although they possess a viable business and although the work was essential to keep it that way, the couple was effectively forced to finance their revamp through an overdraft. The result was another blow to their cashflow, but such is the hand being dealt to Irish businesses at present, they have no choice but to play the game with what they’re given.
Thankfully, their initial analysis was correct; the store has enough of the right elements to continue on successfully. The revamp, despite its cost to the business, has undoubtedly secured its position and realised the potential for recovering and even increasing sales.
“With the revamp, we have deals there we didn’t have before, explains Caroline Higgins. “We always had a strong deli here but when people come in and go to the deli now, it’s at the normal price but there are deals there now, such as five sausage rolls for a euro.
“When they’re shopping around the store, there’s snacks on offer, there’s crisps on offer, and there’s minerals, so they’re actually picking up more offers around the store too. That has had a big impact on our business since we got the new image.”
In addition to taking on the up-dated Daybreak image, the store’s categories were reorganised to drive sales and better avail of the group’s value proposition, which has been ramped up to deal with the recessionary environment.
The space allocated to core, revenue-generating categories was increased, including impulse, off-licence, dairy and frozen foods – also the categories that differentiate them from Tesco. “We also implemented the full value statement,” adds Colm Dolan, Daybreak territory manager.
Every department is littered with shelf-edge signs, shelf-talkers and other materials highlighting the myriad offers in-store, including Daybreak’s national promotions as well as other deals. What’s more, all of the offers that are available in-store, from flashed packs to extra fills, have been flagged with specially created POS designed in the store itself.
Brian Higgins appreciates the Daybreak ‘toolkit’ which enables them to create all their own POS and in-store communications. This ensures their customers cannot miss their value deals or the value message of the shop in general. “That wasn’t available to a lot of other groups in the past. I don’t know whether it is now, but it is a real benefit to us and looks very professional,” he remarks.
This, in addition to the materials prepared by Daybreak to communicate its national value strategy, provides strong support in-store for their investment in value this year. Dolan adds: “The key thing is communication. In the climate we’re in where people are shopping around looking for value, so we need to communicate that value message in-store.”
Team work to tackle costs
Another major part of the revamp was removing old equipment such as refrigeration units and installing new energy-efficient models that would reduce energy costs as well as footprint on the shop floor. The move enabled the team to increase space for vital categories, such as beers and minerals, while simultaneously cutting operating costs.
Energy costs have been a major issue for businesses this year, as most have actually experienced increases in spite of attempts to reduce their own usage. Just as every step of the plan for Higgins’ Daybreak was the result of team work between the retailers and their partners, so too have other solutions been devised to aid business on the strength of discussions at regular meetings and constant communication with Musgrave.
At cluster meetings, retailers expressed the need to tackle energy costs, so Musgrave negotiated a deal with Airtricity for its retail partners across all associated symbol groups.
“It’s considerably cheaper than ESB,” Brian Higgins comments, and it is an example of the kind of useful solutions that Musgrave’s cluster meetings produce. The meetings offer the retailers a forum to discuss any issue that is important to their businesses at the time.
“We talk about anything; energy costs, prices in the shop or the deli, anything at all. They listen to us, that’s the big thing,” adds Caroline Higgins, “It’s all part of the support, and they’re only ever a phone call away.” In addition, she says, they can expect to have their calls returned from any person in the company they contact, no matter how high up. “That means a lot to us as retailers, that people up the top will listen to you as well. They’re not just interested in the money.”
This year, as a direct result of listening to retailers at cluster meetings, Musgrave devised a 24-point saving plan, to help businesses cut down their costs. It also holds workshops for its customers focusing on specific aspects of the business, such as food-to-go, and how to maximise the sales occasions within those departments, demonstrating best practice and also offering assistance on specific questions. “It’s also another chance for retailers to meet up and discuss things,” says Dolan.
Strength in numbers
As well as utilising the support of Musgrave, Higgins’ Daybreak reaches out to other businesses in the town, creating a stronger network that can support local enterprises in their fight to survive.
“That’s one thing I find about this street,” says Caroline Higgins, “business people on this street all support each other. There’s no negativity, we all actually work together as a team. So if I haven’t got something I can go up the road and ask for it and likewise, they can come down to me and if I have it I’ll give it to them.”
In particular, the Claremorris Daybreak was able to run a mutually beneficial promotion with another local retailer, in a united effort to bring back customers lost to the out-of-town super store. Brian Higgins explains: “We did a promotion with SuperValu to compete with Tesco, offering customers 10c a litre off their fuel here for every €40 spent at SuperValu.” And the initiative proved a great success, he adds: “It brought us back up to where we were before they arrived.”
Fuel is, and has been even before now, a tough fight for small operators like Higgins. As Dolan points out however, partnering with Topaz makes life a bit easier, particularly with the fuel card, which makes up a significant proportion of the shop’s fuel business.
Once again, developing relationships within the town has helped drive this business. The Higgins are very supportive of local gardaí, especially when it comes to monitoring underage drinkers and antisocial behaviour. “If the Gardaí come to us, if they need to use our camera system, we have no problem helping them in any way,” says Caroline Higgins. Consequently, the gardaí have become good customers and, of course, all have fuel cards.
Succeeding to survive
After all of this hard work, the survival plan for Higgins Daybreak is succeeding so far, and looks set to continue that way. Thanks to their €100,000 revamp, their value strategy, their savings initiatives devised between themselves and their partners, and their own tenacity as business people, they have protected their store and their livelihood for the foreseeable future.
Furthermore, the Higgins have proven that strengthening alliances between local businesses and the local community is a strategy that has real value for their business.
In general today, Brian and Caroline Higgins are more optimistic than before about the future of their store, despite the continuing difficult conditions. “Bit by bit it’s started to come back again,” says Brian Higgins, who reveals that now only the fuel side of the business is down on pervious takings, while grocery turnover has returned to a healthier figure.
Now the task is to continue to trade their way through and continue to defend their business. As Higgins points out, “You can’t take anything for granted, you just have to keep looking after the customer.”
Owners: Caroline and Brian Higgins
Size: 1,200 sq ft