The Henderson Group – looking forward with 2020 vision
With all systems go in 2020, NR speaks to the group’s managing director Martin Agnew, about its forward thinking, outward looking future.
“The convenience sector in Northern Ireland is both strong and highly regarded. We punch well above our weight”, said Martin, speaking in general terms about the sector overall.
“SPAR NI is part of a global family, with opportunity to learn from each other. In Dublin, the convenience market feels quite cosmopolitan; the market in the North is slightly different, but we regularly welcome visitors who come to learn from us.
“Historically we would have looked to the United States for ideas and inspiration, but increasingly we are looking to Asia and China for ideas. We had a group out there recently on a fact finding trip. We need to look outward to remain at the forefront of what we do here.”
2019 saw the Henderson Group open 17 new retail accounts and a 3.7 per cent growth in retail space. That’s just a few indicators of what was, overall, a buoyant year. However it’s future success that matters. In this respect the Henderson Group is constantly evaluating how to develop and improve even further.
“Investment is involved, not just within our group – others are also investing heavily in the convenience sector. We have created a strong convenience niche that will continue to outgrow the market as a whole,” said Martin.
“Online will certainly increase this decade. I’m not sure what market share discounters will ultimately take, but there’s no doubt that future consumer shopping patterns will be multi-channel”.
Location, Location, Location
“For the convenience sector, it’s all about location and making the most of ideas and solutions. Convenience retailing used to be about saving time, but now it’s about both solutions and saving time, making the whole experience easier for shoppers by offering different meal components and combinations,” explained Martin.
“Where we have scored highly in Northern Ireland is never losing the grocery base. The Northern Irish consumer looks to forecourt sites as a convenient place to go. We have spent money acquiring the best sites, to ensure we can provide the parking that’s required and develop the site as an overall destination store.
“Shopping patterns have changed and continue to change. We are seeing the rise of great secondary locations on busy arterial routes. There is something different in the provision of this from that in GB which has helped convenience to grow – coupled with the focus on value” added Martin Agnew.
“In GB, food-to-go has been an enormous area of growth. We have a different version of that here in terms of hot food to go. While Tesco Express and Co-op have been growing well in the UK, the multiple supply chain is not geared towards convenience in the same way. Our focus is on ‘food for now, food for later’. Today’s consumer is topping up the larder for the next 48 hours.
“The real challenge is to connect to each successive generation – how to communicate with, predict and provide them with easy solutions. We haven’t quite got in to the home delivery side yet. It’s about scale – and the basket spend needs to justify it.
“the likes of Deliveroo might become part of the offer for food-to-go in the future, but ease of parking is still what’s essential for our customers.”
EVs – Electric Vehicles
The 2020’s will see considerable change and developments in terms of sustainability and ‘green issues’. Not least will be the move towards electric vehicles. “It is progressing slowly but will be interesting to see if our new government and Minister for the Environment have environmental issues to pursue. The previous government set targets and Northern Ireland was doing well from an environmental point of view.
“The charging network will start to develop further, with new tax breaks from April. We have invested a huge amount of money in our forecourt sites for the future. How will electrification change how customers shop in the future? It will take half an hour for a car to charge to 80 per cent, so we will need to provide free Wi-Fi, somewhere to sit and have a coffee.
“We’ve planned a visit to Norway where EVs and the infrastructure are more advanced. Being part of the SPAR International family enables us to do that. It gives us access to other enterprises and markets. Norway, despite its oil reserves, has embraced EVs, so we’ll be able to look at how EVs affect consumer behaviour, then consider how we adapt to that behaviour”.
The Henderson Group is well placed to take a strategic view and to explore visionary thinking. Forecourt sites require considerable investment – not least the underground storage tanks which last twenty years. The existing forecourt is capital intensive so the return on that investment needs to be factored in, alongside investment in EV charging infrastructure. This adds to the complexities of twenty first century convenience forecourt retailing.
In 2019, the Henderson Group opened seven EUROSPAR supermarkets within its own retail operations. The main difference is that EUROSPAR stores are larger, provide a wider range, and have various instore counters and promotional strategies. The difference is in the overall experience, although in the consumers mind, EUROSPAR is often seen as SPAR, but larger.
ViVO on the other hand, also a Henderson Group symbol brand, is geared more at the smaller end of the market – while still providing much of what consumers have come to expect from symbol group retailers.”
In the convenience sector as a whole, the aim is to persuade consumers to increase basket spend.
In late 2019, the Henderson Group launched it’s ‘The Chef’ range, with considerable investment in kitchen facilities in Randalstown and the assistance of one of Northern Ireland’s top chefs, Carl Johannesson from the James Street South Group in Belfast.
“We have developed a brand based on quality, under a name that the consumer knows it can trust, using chef skills to produce good ‘home-cooked’ meals under ‘The Chef’ brand.
The Chef’s range is on trial in several EUROSPAR stores and is performing well. Following consumer research, it will be rolled out in to the next batch of stores.
2019 also saw the SPAR Bakery brand introduced across the network.
Recognising and responding to trends is part of the role of an enterprising MD. Martin keeps his ear to the ground. “We want to build an organisation that’s self-learning, as we know more about what our consumers want and need. This feeds back in to the planning process. Consumer insight and bespoke market research is a valuable process. We invest in our teams. We bring a range of expertise in to the business, people who have initiative, ideas and ambition. It’s a continual improvement loop that drives the business forward.
“Plastic, meat free and food waste are three important trends right now. Health and well-being, and environmental issues are all important trends, as is tackling obesity”.
Social Media and technology
“Social media is a powerful tool. Technology will continue to play a transformative role in our stores. Our own IT company Henderson Technology has enabled 75 stores to be equipped with EDGEPoS self-checkouts.
“In a global first, Henderson Technology worked with app-developers to introduce the Gander App to over 300 stores. This pioneering technology allows shoppers to see real time reductions on short-dated items and has rewritten the rule book on how stores deal with food waste. Unsurprisingly, the app won Mobile App of the Year at the inaugural Belfast Telegraph IT Awards and will no doubt continue to achieve success in 2020.”
Policy and legislation
While the return of the Northern Ireland Assembly has been welcomed across the business sector, policy and legislation does and will impact on business and the wider economy in various ways.
The Henderson Group is committed to ensuring the company is attractive as an employer, and is aware of its responsibilities – not just as an employer, but to the environment, and to local communities.
“Retailers need to be able to keep pace of all legislation and policy, including the role out of the national minimum wage. Fresh and food-to-go is a labour intensive area – the challenge is to balance paying a good rate of pay yet controlling costs, and offering product quality and value to consumers yet growing cash margins for store reinvestment and sustainability.
Brexit and the Economy
Although some of the worry about a ‘no deal’ Brexit has passed, there is still uncertainty around the impact of Brexit. Henderson Foodservice has £30m business in the South, which relies on tight overnight delivery to Dublin and other population centres such as Cork.
“Any friction on the border is a problem. While we seem to have avoided the worst of a ‘no deal’ catastrophe, negotiations will take place and we can only hope for a good free trade agreement. We don’t want any physical barrier at the border.
“There will be a transition period, legislation and other hurdles but I’m a glass half full person. We need to take control of the things we can control, while making contingency plans for the worst case scenario. The new government in Northern Ireland will hopefully be able to get its head around these complexities”.
The Cornerstone of Local Communities
While SPAR and EUROSPAR are often the cornerstone of local communities across Northern Ireland, the symbol group is part of a global family – strongest in Europe, but growing very strongly in Southern Africa, Asia and China, where SuperSpar and InterSpar are large hypermarkets. In Thailand, SPAR features across the forecourt sector.
As part of this global family, Henderson attends the annual congress, and benefits from study tours, access to expertise on a whole range of information and issues affecting convenience retailing.
“The benefit of being part of a global brand is that the SPAR name is both local, and global. Each independent retailer is an entrepreneur in their own right. We supply the template, but retailers create their own art.”