Taking stock

Meet the C&I store operators who like to look before they leap

Opting to leave the security of steady employment in order to run your own convenience and impulse outlet will always be a risky business … but more so, it seems, for some than for others.

Gary Ross and his wife Andree could probably claim to have been as prepared as anyone possibly can be for the rigours of the self-employed retail rollercoaster when they took the small store plunge back in 2004.

Both boasted a long track record in the grocery business; Andree in admin with Coles, and Gary with a decade of service with the same supermarket group, before stints with the Nightowl Group, Caltex and Shell. And he's still only 39.

After serving their lengthy 'apprenticeship' and doing their homework, the Brisbane-based couple felt ready to go it alone, without – they hoped – the sleepless nights and ridiculously long hours endured by many first-timers.

After "cutting their teeth" on a smallish outlet in the Brisbane suburb of Morningside, the couple moved to a larger store at Eight Mile Plains in the south east suburbs about two-and-a-half years ago.

A challenge found

Having proved – by doubling the sales figures at Morningside during their two-year tenure – that their corporate experience could translate into small business success, they both felt the need for a greater challenge. And they found exactly what they were looking for!

Gary readily admits that the Eight Mile Plains store was terribly run down when the couple took it over. However, the fact that it was located in a very well-serviced small shopping complex sitting halfway between a couple of major shopping centres in a developed suburban area appealed to him. He considered it ideal for luring in the fly-by, drop-in, top-up shoppers, and importantly, he says there was no room for competition to move in.

Once Gary and Andree – who have two young daughters – had decided that the store was ripe to be fixed, improved, and its potential maximised, they weren't about to let the grass grow under their feet.

"We started planning immediately … as soon as we knew we were going to sign the contract we got busy," said Gary. "From Day One, we had carpenters, electricians, tilers ready to move in and rip down shelving, change the flooring ... they all knew exactly what they had to do."

One of the most crucial decisions that the couple made was to change the store's branding. They immediately switched to Spar, a group with whom they had formed a good relationship at their previous Morningside store.

Something different

"We wanted to make a statement, and refresh the signage and change brands," said Gary. "We felt the store had been looking shabby, so we wanted it to be noticed that something different was happening."

The fact that the store kept trading throughout the refurbishment also allowed shoppers to see exactly what was going on. The revamp meant turning aisles around, adding new fridges, new shelving, new lighting and changes to the floors. And then, of course, there was the stock to look at, and the whole Civic Video branded DVD rental area to re-assess.

Spar Civic Eight Mile Plains, which playfully but accurately refers to itself as the only combined Spar Express and Civic Video store on the planet, is divided into two distinct areas. Some 210 square metres of the 330 square metre outlet is given over to the convenience business and the rest to its DVD rental operation.

Not surprisingly, given his breadth of experience. Gary had already gained some exposure to video and DVD rentals and was determined to make that side of the business work.

"A lot of the small Convenience stores that used to rent DVDs a few years back have got out of the business," said Gary. "It is not simply a matter of ordering a few movies and that's that … it is actually very complex and has got to be managed properly, and we had to work it out very quickly."

When Gary and Andree did the refurb they made absolutely sure that the two sides of the business were completely distinct from each other.

A step each way

"If you step into one side of the store you are stepping into the entertainment world with colour and differential, displaying movies to rent or buy," said Gary. "If you take a step the other way, you are into top up, convenience style shopping … they are connected but they are different."

Crucially, there is still a single point of sale for all products although there is also a 'grocery-only' checkout available so people don't get stuck in a big DVD queue, and all the staff are trained in all aspects of the business.

"We have made it so it can work together," says Gary. "Someone will grab a movie and get their chips for the night and their daily essentials as well."

Indeed, some 85% of customers renting a DVD will buy something else from the store so the two elements complement each other.

Interestingly, due to the fact that Spar Civic Eight Mile Plains operates in a small shopping centre that has a number of well-run specialist shops, Gary decided not to compete on all fronts but rather to trade away the traditional deli, fruit and meat departments in favour of the video store.

"The video component is about 22% of our business which is almost exactly the same as you would expect from deli, fruit and meat," he said. "But then DVDs have a much greater margin!"

Spar Civic Eight Mile Plains, which is open from 6.30am-10pm every day of the year, has 18 staff, most of which are casual. It has three registers and, at peak times, there will always be a member of staff free to maintain the shop or who can assist with DVD enquiries. It's a busy place with its own ATM and even a dry cleaning service.

The joy & the rewards

But Gary and Andree's efforts, hard work and planning have been rewarded with sales that have continued to grow healthily despite the challenges presented by the economic downturn. The store now serves well over 5500 customers a week and over 6000 during the summer season.

The couple believes that one of the most crucial elements in keeping sales up when trading conditions are difficult is to maintain stock levels. They say that a store with empty gaps on its shelves is the quickest way to lose the consumer's confidence. Stock, they believe, should be seen as an asset or an investment to be handled with care and not as a cost that you might squeeze or cut back on.

The Eight Mile Plains store stocks more 10,000 DVD titles and well over 3000 shop products ranging from grocery, dairy, freezer and biscuits to ice cream, drinks, tobacco and phone recharge, and the couple is determined that no item should ever be out of stock. Once the store has a product that has proved it sells, then it's simply got to be available on the shelves.

"That is absolutely vital in building customer confidence," said Gary. "If people want a can of kidney beans they have to have confidence that their local store will have it, otherwise they will think they have to go to one of the big supermarkets, and we certainly don't want that."

The passionate way Gary talks about the convenience and impulse business makes it obvious he has no regrets about 'taking the plunge' and leaving the relative security of the corporate world ... but there have been adjustments.

"There is not that same corporate support network when you are out on your own, everything has got to come from you," he said. "To me though the joy of this is seeing things work, making money and enjoying a better lifestyle … it's about executing everything to the very best of your ability and enjoying the rewards."

And yet, importantly, Gary says he is still learning and, as he listens to customers, is constantly tweaking elements of the store. His hunger and passion for the business makes you wonder whether a new challenge may beckon at some stage in the future.

"We are enjoying life as we are at the moment but we are ambitious and maybe we will want to give something else a go at some stage," says Gary with a smile. "And if we do move again, we certainly would not want to go backwards … it would have to be bigger and better."

The Spar Civic Eight Mile Plains website is www.sparcivic.com.au