Big changes ahead for Henderson Group

Paddy Doody, sales and marketing director at Henderson Group, tells Neighbourhood Retailer about the group’s major capital expenditure plans for 2017

The Henderson Group was extraordinarily busy throughout 2016.

Its year began with property acquisition and expansion, and ended with a major deal with the SSE Arena that will see the SPAR brand associated with the region’s biggest entertainment venue.

Now the group is set for an even bigger 2017, with a major capital investment plan worth some £40 million over the course of the year.

Neighbourhood Retailer spoke to the company’s sales and marketing director Paddy Doody about the ambitious scheme and the group’s successes over the past 12 months, beginning with that landmark deal with the former Odyssey arena.

The SSE Arena and SPAR Northern Ireland partnership will see the retail franchise become an official partner of the arena, and its W5 and Stena Line Belfast Giants residents.

SPAR branding will be splashed across digital screens at SSE Arena events, while the arena, W5 and the Belfast Giants will benefit from promotional activity across the retailer’s network of over 300 SPAR stores in Northern Ireland.

“We first spoke to them about a possible partnership a number of months ago,” Paddy explained. “It was particularly appealing for us because a relationship with them would cover a lot of bases. The association with the Giants is particularly relevant, as its message of fitness, health, sport, and family are fantastic for the brand.”

The year also saw the group’s launch of ‘The Kitchen’ range; fresh, convenient meals that furthered the innovative ‘Meals Made Delicious’ concept tested by the group in 2015.

What made this project different, however, was its collaboration with the Ulster University Business School’s Food and Consumer Testing Suite, to develop and refine the range.

‘The Kitchen’ now extends to 39 products including main meals such as Chicken and Broccoli Bake, Roast Beef in Peppercorn Sauce, and Cottage Pie, to party foods, soups and desserts. It’s available across the Henderson Groups full SPAR, EUROSPAR, ViVO, ViVOXTRA and ViVO Essentials network throughout Northern Ireland.

For Paddy, the work with the university was important to achieve an independent perspective on this pivotal range.

“We decided to work with the University of Ulster for a number of reasons,” he said. “Firstly, they were able to facilitate an independent testing panel. There is a full catering school on site, and it was important to use experts that were independent.

“We wanted to get quality feedback that we can use in our advertising. That’s why we wanted to use those guys. The Kitchen Range is our own range of meal solutions. We use 100% NI beef and poultry.

“It gets into that touchpoint of ‘local’, and supporting local has resonance with shoppers.

“Shoppers have continued to have less time and less money, while still looking for convenient solutions.

“People at 4pm don’t know what they’re going to eat later that evening.

“Given the dominance of our network, there’s always a SPAR near you. So when you enter a store at 6pm, we need to offer something that can be cooked quickly and is properly wholesome and made locally. The Kitchen range and the rest of our offer is all about fresh, and the key is that shoppers see that fresh offer is there.”

The Henderson Group’s sales and marketing director revealed the group had enjoyed an “excellent performance” in its wholesale fresh sales over the past year, increasing an impressive 6% over the period.

“At retail, our like-for-like fresh sales were up 3.5%,” he said. “We’re very pleased with that because it’s very tough out there, but we’ve been successful in having a comprehensive support package to help our retailers thrive.”

Paddy spoke about the discounts the group had made available to its retailers, such as their 12 Deals of Christmas promotion, which saw massive reductions in key product areas.

He added: “That represented a huge investment totalling some £600,000, with deals like 18 cans of Coca-Cola for £4. They are genuinely market-beating offers and driving footfall in the store.”

The strength of the group’s performance over the last year was highlighted by a number of significant openings. These included the landmark Creighton’s Garage on Belfast’s Upper Lisburn Road which features a cutting-edge EUROSPAR store with a menagerie of leading retailing solutions.

“Creighton’s is a great example of an independent retailer,” Paddy said. “We sold the original site to Niall Creighton who completely redeveloped it.

“It has been doing exceptional levels of business, and provides a fantastic service to the area. If you’re trying to sum up what we’re doing, that says it all; about our approach to wholesale, investment and at a consumer level.

“The offer available at this new store is completely comprehensive, and suits a huge range of missions, whether it’s breakfast, coffee, baked goods, a grocery shop, or even ice-cream.”

Last year may have been an important one for the group, but Paddy Doody believes 2017 will be even better, and the scale of their ambition is impressive.

“We’re very excited about our performance and have high expectations for 2017,” he said. “We’re planning a £40 million capital expansion programme.

“At wholesale, we’re building a new warehouse, because we’re bursting at the seams. We’ve acquired the old Marks & Spencer’s building, knocked it down and are now halfway through construction.

“We’re also planning to continue a programme of co-investing with our independent retailers, co-funding expansions and refurbs. On top of that, we’ll continue to expand the company-owned network in number and size.

“One example is the company-owned Knock Road site, a SPAR and BP forecourt that has recently signed a trial deal with the Chopstix franchise. They have over 100 outlets, so we’re running a trial with them to see if it works out.”

While the economy poses a number of hurdles for local retail, Paddy is adamant the Henderson Group will perform strongly over the next 12 months.

“We’re very confident for the year ahead,” he said. “Consumer confidence has taken a dip amid the uncertainty surrounding Brexit. And we’re expecting to see food inflation throughout this year linked to the fall in Sterling.

“There is uncertainty but it’s not affecting our investment plans, and it’s that investment that will help drive sales and reduce costs.

“We’re growing our Daily Deli, our Barista Coffee offers, and our investment in retailers. It’s going to be a great year.”