Future Proofing the Business at The Henderson Group

Paddy Doody champions the case for constant investment as The Henderson Group reveals its best store growth figures in a decade…

From a group perspective, says Paddy Doody, it’s been “an exceptional year” for Henderson Wholesale.

And so it has. One-hundred-and-twenty years after John Henderson threw open the shutters at his seminal grocer’s shop at the Old Lodge Road in Belfast, his successors preside over a sprawling wholesale and symbol network which last year, announced profits of almost £24m – up 11 per cent on the previous year.

For Doody, that’s a vindication of his methodical approach to the group’s development. A relentless moderniser, his years in post as sales and marketing director at the group have been characterised by signal growth in Henderson’s physical estate and rapid expansion across its burgeoning network of company-owned and independent retail stores.

He gets thing done, those who know him, know that. But it’s equally clear that Doody values strategy, forward-planning and a shrewd eye for the competition just as highly when it comes to plotting a course for the market-leading group.

“It’s hard to stay at number one when everyone’s nipping at your heels, but that’s actually the thing that motivates us,” he says. “Being able to say that our convenience market here in Northern Ireland is at the cutting edge of world retailing, knowing that other markets are looking in at what we’re doing here, those things are important to us.”

Doody’s evangelical approach was in evidence soon after his arrival at the group’s Mallusk headquarters in 2004. Within a year, he had identified the fledgling Eurospar small-supermarket format as a profit-boosting vehicle that was ripe for development:

“That wasn’t something that we were known for doing at that time, but we decided to go ahead and invest in these 5-7,000 sq. ft. supermarkets,” recalls Doody. “Fast-forward to 2018 and we now have 59 Eurospar stores and five VivoXtra and they account for about 30 per cent of our business…Shoppers love this format and it’s turned out to be a really rich vein of business for us.”

It’s that perpetual forward motion that Doody values, never missing an opportunity to preach the need for continual investment both within the group and among its wider network of independent retailers.

Spar

Opening of the latest phase of the £30m redevelopment project at Henderson Group, headquarters in Mallusk. Pic: John Agnew, Geoffrey Agnew – Joint Chairman and MD Henderson Group, Tobias Wasmuht – MD SPAR International and Martin Agnew – Joint Chairman and MD of Henderson Group.

Refurbishment

That reforming zeal was in evidence in December when Henderson put the finishing touches to a £1m refurbishment at a Eurospar outlet in Portadown:

“That’s a great example of the current standard that we’re aspiring to in store fit-out,” says Doody. “Actually, we only completed that store a week before Christmas and I can tell you that sales figures from there for the first few weeks have been just phenomenal.”

And at Templepatrick, where the company-owned Eurospar had reached the limits of development on its existing site, Henderson spent more than £1m and purchased two adjacent properties to boost capacity at the busy outlet.

“We finished that development in the middle of the year and we have seen like-for-like sales growth of 10 per cent at the site. We’re really pleased with that,” reports Doody.

It’s all part of a planned £40m capital expansion scheme for Henderson, key elements of which were the opening of a new £3.5m group office at Mallusk early last year and the much-anticipated unveiling of a new £12.5m warehousing facility on the site in September.

The next parts of that investment will be put in place over the next three years, including another £15m warehouse at Mallusk that will allow the wholesaler to expand its fresh, frozen, ambient and foodservice storage.

“We are future-proofing the business for the next 20 years,” explains Paddy Doody. “We were bursting at the seams before the new warehouse opened in 2017, but the work we’re doing now will allow us to look at other opportunities, such as contract storage, once we have everything in place two or three years from now.”

Paddy Doody

Expectations

Generally speaking, says Doody, the group is performing above expectations. The wholesale end of the business grew 7.5 per cent ahead of plan last year and like-for-like sales growth of 4.2 per cent was also more than forecast.

“In terms of new sites coming on, we’ve been very successful with some very notable new stores,” he adds. “We opened 35 new stores in 2017, which is probably the most we’ve done in a year for the last 10 years. That all came about through a combination of acquisition, building on greenfield or brownfield sites and straight-forward recruitment of existing retailers.”

Doody admits that the market has been “squeezed a little” by the sustained growth of the discount sector, but the lion’s share of his concern is reserved for the recent emergence of The Co-operative as a new – and very significant – supplier to the independent retail trade.

In November, Co-op took advantage of a level of chaos in the sector that followed the well-documented collapse of wholesaler P&H to clinch a supply contract with symbol operator, CostCutter, which has 2,200 stores across the UK.

That deal came a fortnight after the Nisa symbol group, which has 3,200 outlets, had accepted a £143m takeover bid by the Co-op.

“The Co-op is a good operator and the next big threat for us lies in whatever they do next,” concedes Doody. “But we are also good at what we do and we welcome any new competition, it makes us better, it keeps us sharp and we will see how they intend to operate.”

Spar forecourt

Investment

Going into the new year, the focus is, predictably perhaps, on investment, spending on infrastructure and staff development and maintaining a focus on fresh food, which now accounts for about 45 per cent of the business – 12 years ago, it was closer to 30 per cent.

“You need to be investing in your sites every five to seven years and if you don’t, then you’ll see business go down, there’s no doubt about that,” asserts Doody.

“Look at Mulkern’s [Eurospar, Forkhill]. In 2004, that was a 2000 sq ft Spar store. Look at it now. It’s one of the best stores in the network and that’s because the Mulkern’s family has invested and expanded every couple of years. They have a great local butcher, they have great outside facilities, an off-licence. It’s a great example of the importance of investing in your business.

“Going forward at Henderson’s, we are going to be focusing on providing the best environment, the best pricing and the best range to our customers. That sounds very basic, but it’s true. If you go into a store and it’s a nice, bright site with easy parking and pleasant staff, then you’re going to keep going back. That may not be rocket science, but it’s what good retailing is about.”

Featured image: Pictured at the opening of the new 180,000 sq ft warehouse at Mallusk are John Agnew, joint chairman and managing director, Henderson Group; Geoffrey Agnew; CEO of SPAR International; Tobias Wasmuht, head of Spar International and Martin Agnew, ioint chairman and MD, Henderson Group. Credit – ©Press Eye/Darren Kidd

Leave a Reply

Your email address will not be published. Required fields are marked *