This time last year Maev Martin spoke to Barry Group managing director Jim Barry about making the transition from managing to owning the Costcutter franchise in the Republic of Ireland. This year, he talks to Maev about a new business strategy that he hopes will take the Barry Group to the next level.
For the Barry Group, the pandemic was characterised by uncertainty and agility.
As the business leaves that period behind, it has been focusing on its future trajectory.
This has resulted in a new business strategy that Jim hopes will propel the Group to a new phase of development across all of the channels in which it operates.
“Last year, we put a one-year plan in place, which was about securing new levels of business,” he says.
“Our response during Covid-19 stood us in good stead – we got a lot of new customers and the vast majority of them have stayed with us. We enhanced our credentials and credibility with a number of customers and we are getting a long-term payback from that now.
"Our team was agile and responded well. 2022 is a re-set year, where every element of our business is going well. We are on a rising curve, which is putting us in a good place to achieve the objectives of our three-year plan, which begins in February 2023. We are excited and bullish about this plan, and we have ambitious growth targets for the next few years.”
Carry Out
When it comes to the Barry Group’s Carry Out business – the country’s largest independent off-licence chain – Jim says that Minimum Unit Pricing, which came into effect earlier this year, has worked in their favour.
“Under cost selling of beer has stopped and the unfair playing pitch is over, so we are doing well in that market, as are a lot of other independent retailers,” he says.
“We also have a new image that is being finalised for next year, which will provide the brand with a major boost, and we are introducing online sales for Carry Out retailers. We are trialling this at the moment and it will be fully operational early next year. In addition, we will be providing our retail partners with an IT upgrade, which will be the latest version of the local EPOS system that they use. This will be a good addition for our retailers and a considerable help to them in running their businesses. These elements combined will give the Carry Out brand a strong boost.
“The strategy for the Carry Out brand over the coming years is that a number of retailers will increase the size of their stores, and we have earmarked a number of sites for new stores. The recruitment drive is starting now, but it will really kick in next year. We currently operate 100 Carry Out stores around the country and we are looking to open between 12 and 15 new stores next year. Compared to 2019, Carry Out is running at over 25% when it comes to new store openings.”
Costcutter
The Barry Group operates approximately 90 Costcutter stores throughout the country and Jim reports that a lot of new business will land between now and the end of this year.
“There will be a large injection of new retailers, which will give the brand’s presence and turnover a great boost for the coming year,” he says.
“We are happy that the new business that is coming, and the business that has already landed, will create positive growth for Costcutter. Between now and the end of this year, we will have 15 new retailers, a number of whom are with other wholesale partners at the moment, and they are located across the country. That is 15 new stores with an average of 15 to 20 people employed per store, so we could be looking at generating up to 200 extra jobs between now and year end."
Value For Money
According to Jim, the Barry Group has identified a range of products that they believe will deliver a big value message to shoppers in Costcutter stores throughout the country.
“We are putting a merchandising pack together for our Costcutter customers to highlight our discount range,” he says.
“This will combine own label and secondary brands that are good value. When we put it together and highlight it in-store, it will further build on the value perception that consumers already have of the Costcutter brand. We believe that it will give shoppers a very strong sense of value in-store because value and value perception will be very important for the remainder of this year and into the first half of 2023. We know, and our customers know, that we offer good value, but we are trying to highlight that fact even more to consumers in the current climate.”
Quik Pick
The Barry Group is also re-launching its Quik Pick franchise.
“We have created a few concept stores that have been well received,” he says.
“This retail model would be for stores that are generating less turnover than a typical Costcutter. We see a gap in the market for a lower turnover store than your typical Costcutter operation, and we have a number of interested parties. We would be looking to roll out approximately 40 Quik Pick stores, so that is another growth opportunity for us next year.”
Wholesale Business
Like the Costcutter and Carry Out franchises, the Barry Group’s wholesale business is also trading well.
“This is because retailers are finding that margins are getting tighter and expenses are rising in-store, so an increasing number of retailers are looking for good value,” says Jim.
“We opened a lot of new business during Covid-19 and we have maintained that business. The retailers that we helped out have stayed with us. In addition, we are finding that retailers are much more open to talking about value for money options than they were three years ago.”
Jim maintains that while other wholesale brands have pulled back on their level of service to retailers, the Barry Group has enhanced its service.
“That is what we are hearing from our customers,” he says.
“We are coming across people who are telling us that the calls from our competitors are less frequent, so our strategy for this year has been to focus more on the customer in a difficult environment, and that has really worked for us.
"It appears that we are delivering above the wholesale sector standard, and we will be adding extra sales people to our team, so we are expecting a lot of growth in the wholesale side of the business. In fact, of the three arms of our Group, our wholesale arm presents the biggest growth opportunity for us."
Retail Challenges
As we all know, retailers are experiencing rapid rises in operating costs at a time when hard pressed consumers are pulling back on expenditure, as they too are meeting the same inflationary pressures as the businesses that serve them.
“SMEs will find it very difficult over the next 12 to 18 months as costs are becoming a big factor,” says Jim.
“In one sense, it is about how you respond to market challenges, but the energy and labour costs that businesses are currently experiencing, and are likely to experience in the coming months, are extra challenges. It certainly looks tough out there, but these challenges are not insurmountable.
"There have been many challenges and obstacles in recent years, such as Brexit and Covid-19, so Irish businesses, particularly businesses in the retail sector, have become adept at finding solutions. It is difficult from a cost point of view, particularly with energy costs, and none of us foresaw the impact of the Russia-Ukraine war, but when you are wondering whether we will have security of electricity supply over the winter, it is a bit scary. However, those are the cards we have been dealt and we have to come up with solutions."
What’s In Store
Looking to the future, Jim believes that while consumers will be looking for value for money, there are “lots of good and competitive Irish options” available in grocery retail.
“There will a change in some consumer habits over the winter months,” he says.
“For example, we might see people eating out less, and not as much socialising in pubs, but that will work in favour of off-licences and retailers, so I think things will be tighter, but retailers will respond. Companies that adapt and evolve their strategy will come through these difficult times in good shape.
“There is a continual refreshing of the fresh food range on the deli counter in our stores and the value message for our food offering is our single biggest focus in-store. We will be rolling out a major marketing campaign highlighting the value in-store at the point-of-sale.
“One of the strategic moves that we have made is the splitting of our Group sales division into two, with sales director Edwina Lucey leading our Costcutter and Carry Out brands, and Cyril Vickers heading up our wholesale business and key accounts. This new structure, which we introduced a couple of months ago, is working well for us so far, and we believe that it will help to drive sales growth in the future.
“It is all about investing more in strategic planning and in our sales strategy. We have responded well to market conditions over the past two years and grown our business as a result, so we want to maintain that momentum. We have strong growth plans in all three areas of our Group. 2020 and 2021 was up and down and it was difficult to set a base from which to make growth projections.
"Normally, with a business plan, it is based on the previous year’s performance, but we set a plan for 2022 in anticipation of what might happen. However, what we predicted in terms turnover and profitability for 2022 has been achieved. That means that we have now developed a good foundation for future growth, which is better than we thought it would be, and we have a three-year plan, so we are optimistic about the prospects for the Group over the next couple of years.”
High On Consumer Agenda
Jim believes that sustainability will remain high on the consumer agenda, as well as high on the Barry Group’s agenda, despite the various cost pressures that are being exerted on retailers and consumers.
“We are committed to delivering on our sustainability plans, which are part of our three-year strategy,” he says.
“We encourage our customers to buy into sustainability because it isn’t something that can be parked because of inflationary pressures. If anything, I think the sustainability agenda will move forward at pace because small businesses are finding the extra energy costs unsustainable."
© 2022 Checkout – your source for the latest Irish retail news. Article by Maev Martin. Click subscribe to sign up for the Checkout print edition.
