Kenny’s magnificent seventh

Kenny Bradley tells Neighbourhood Retailer the secret to the perfect acquisition after the success of his seventh store

Retail may be one of the hardest games in modern business, but Kenny Bradley is easily one of Northern Ireland’s best players.

With seven Spar stores in Co Antrim and Derry/Londonderry, including one Eurospar, the continued growth of his retail empire almost mocks the crushing climate facing the rest of the industry.

The latest addition to his retail business is Spar Grove Road, located on the orbital road around the north west of Ballymena town.

“We took it over on October 2014 from another operator,” Kenny told Neighbourhood Retailer. “We’ve really freshened it up inside with new front counters, a Gelato Italian ice-cream offer, and a new coffee unit. We’ve added a few general cosmetic changes, updated some of the systems and serviced the equipment.”

The alterations so far might not sound too drastic, but the results have been phenomenal.

“We’re up 25 per cent,” Kenny revealed.

Attached to the Countryman Inn, the Spar and its adjacent restaurant forms a mutually-beneficial hub in what Kenny described as a “good catchment area”, with lots of traffic, especially at the weekend.

“There are always a lot of people visiting the Countryman, so that brings more attention to the store,” he said. Asked if it was those factors that led to the sale, Kenny said: “Basically, we saw the opportunity and decided to go for it. I had a feeling it could do well considering how much passing trade it had.”

Kenny said that despite the store’s good location, it was in a highly-competitive area, with another Spar nearby and a Henderson’s-owned store not far away too.

“But it’s still a good area,” he said. “There’s a lot of private housing nearby.”

Revealing his priorities for what separated stores with potential and those without, Kenny said: “These are the things I look at; competition, amount of housing nearby, and level of passing trade. Location is key.”

Kenny also understands the importance of local staff, and opted to keep on all the previous workforce following the takeover. A few have been added since to keep up with the increased demand.

One of his big changes instore is Kenny’s new emphasis on coffee, a huge growth area for the convenience industry and one of the most profitable products available to retailers. The local entrepreneur has grabbed the opportunity with both hands.

“We have created our own coffee brand instore,” he said. “I brought in a coffee business consultant to help select the right coffee and equipment, and crucially create the best experience. It had been an issue for us, because it was hard to know what was good, and what was not – there are so many opinions on coffee out there and everybody claims to be the best. We got some great advice and looked at a number of different models and systems to get it right.”

Few realise what is behind the dedicated coffee unit instore. Kenny has focused on ensuring his caffeinated beverages are of the highest quality. Equipment is regularly checked by quality managers to ensure consistency in every cup.

He is also looking at a new complimentary bakery offer, and has broken the shopping area down into zones allowing Kenny to drive the business using data-validated decisions. “Essentially the till decides” said Kenny. “It’s all about listening to our customers! Hot food is a huge growth area and food-to-go is our primary strategy. We are working on a promotional plan and have a well-known, experienced TV chef advising us as well.”

Kenny points out however, that new legislation is making even the food-to-go market challenging territory. But with new challenges come new opportunities. Simple, good, tasty food with a homemade story is what customers are after, and if it’s healthier too – that’s a bonus.

According to Kenny, stringent controls on displaying allergens and nutritional information have led to a boom in food service companies providing one-size-fits-all solutions. He believes this will lead to more uniformity in hot food.

“These new rules have created a lot more work and legislation and I suppose this creates an opportunity for food service companies who have people dedicated to getting to grips with this legislation,” he said, adding that the extra complications will force some to hire food service companies to provide their complete food-to-go offer. “The problem is that it won’t be long until everyone is just selling the same thing. So working with our chef, the plan is to create bespoke solutions using our own team. Will it be worth it? That’s the challenge.”

These areas are a key priority for Kenny, who despite seeing growth in his retail network, is frustrated at the deflation eating into grocery margins.

“Grocery is very flat at the minute,” he said. “Part of the reason is that convenience is caught in the crossfire between the discounters and supermarkets. That’s putting a lot of pressure on margins.

“Meanwhile, the cost of doing business has increased massively. With the introduction of the pension scheme, the ‘living wage’, the 2015 rates revaluation, and collecting the bag tax for government, costs are going through the roof.”

Kenny said he believed the government was “off-loading” its responsibilities onto business. Indeed, in October last year, he told a local newspaper he had cancelled a £2 million investment over the huge cost hikes forced onto business.

“All these new rules are costing a lot of money, so we’re having to find our margins another way,” he said. His alternative is maximising the three remaining pillars of growth – coffee, treats and food-to-go.

“We know it would be easier to use a food service company, but we’ll not know if we’ll succeed on our own until we try – it’s a risk.”

Kenny has never been adverse to risk, such as his decision to get involved with Applegreen, helping build and leasing the plot for the Irish oil company’s sensationally popular A26 Trunk Road Service Station.

And despite having added his seventh store in the last 18 months, Kenny said he was still on the lookout for new opportunities. “If the right opportunity comes up, we’ll always take a look at it,” he said. “I’m more than happy to keep offers confidential, and very open to approaches from other retailers. At the minute I’m very hungry to add a new site.”