When Pete Patel was announced as winner in the Convenience Chain of the Year category at the 2021 Asian Trader Awards, it was the third consecutive win for the soft-spoken retailer, who won the Shop Safety Best Practice Award in the previous year and the Bakery Retailer award in 2019.
The Asian Trader Convenience Chain Award, supported by Dr. Beckmann, celebrates the maturing of the convenience sector, as more and more impulse entrepreneurs expand into multiple sites and establish themselves as true convenience chains. With five convenience stores, all under the Bestway’s Costcutter fascia, in addition to a Bargain Booze outlet, Pete represents one of the pioneers in this expansion, coming back to retail a decade ago with a steely determination to be a multi-site operator.
“We always had single sites. It was probably about 15 years ago, when we sold our last site, I took a break from retail. And then I decided that when we come back into retail, we will be a multiple store operator, not a single site player. That was a real turning point,” he says.
Pete’s parents bought their first shop in 1980, in Orpington, Kent, when he was just five. He has been brought up around shops all his life, joining the trade filling shelves by colour. They still own their second shop in Brentwood, Essex where he also has the Bargain Booze store. His other stores are located at Brockley, Lewisham; Southborough, Tunbridge Wells; Heanor, Derbyshire and Meopham, Gravesham, his latest and the first dual-branded Costcutter-Bargain Booze store.
Multiplying
Running six stores, he is very much aware of the importance of delegation, and ensures that staff are taken care of. He recruits the store manager and the assistant manager and then it’s the responsibility of the store manager to recruit all the staff within the store. All his staff enjoy a 10 per cent discount
“We have staff training within the store and each store manager has the same staff training manual. So they're all trained to the same standard,” he adds. “And I keep the store managers up to date with any decisions I’m making in the background which affect the store.”
It also helped that his first store was in Derby, 180 miles from the family home in Kent, playing a big part in letting go of the reins and learning to delegate. “When we opened that store (in 2011), I stayed in Derby for one year. And then, after six months of being there, I decided who would be the store manager. And, in fact, I have had the same store manager since I left Derby,” he says.
Refill station at Costcutter Southborough store
“The turning point came when I realised that by having faith in your store team and giving them the responsibility to run your business, it encourages them to work better and it gave me the opportunity to grow from a single store operator.”
He has also perfected an operational model that is consistent across stores. “Once we got to the second store, we were sort of trying different ways to operate the stores, and we made some mistakes along the way, but then we now believe we have a formula that works, and we use the same format. So operationally every store works the same,” he says.
One advantage of this is that he can easily redeploy staff, when necessary. “We have got stores near to each other, and if I need to cover another store with another member of staff, someone can go from one store to another store. And operationally it will be exactly the same. One doesn’t have to learn anything new,” he notes. “So it was very important that we made sure that every store operated the same way.”
Technically speaking
Technology has also made it quite a lot easier. A fully integrated IT system allows him access to all stores any time. “And there is stuff like electronic shelf labels, which means I can change the prices from wherever I am and it will change in all of the shops,” he adds.
They also use a labour management company called S4labour. “They just use their mobile apps for clocking in and clocking out and for their wages. So that makes it easier for us, to keep the rotas up to date and stuff,” says Pete.
All of his stores have unique points of difference, catering to their location and customer profile, but he notes they all have the same DNA – and that is of a business grown on the best customer service possible.
“I spend as much time as possible when we take on or open a new store. The majority of my time is focused on the new store so that it starts off how I want it to grow. The team learns the DNA and adapts to it. I make sure the team is always fully engaged with the decisions within the store to make them feel it is there store as much as it mine,” he says.
Symbol support
As an independent multi-site operator, Pete feels that the support from a symbol group is crucial in running the stores.
“One of the main advantages (of joining a symbol group) is having all the stock delivered,” he says. “Having multiple stores, I can't be in every store. So it was important to be with a symbol group partner that can deliver the order to the shop. Plus a brand that people recognises is important as well.”
He adds that having a group like Costcutter has worked very well for him. “They have got the knowledge of what product ranges to put in, they have got knowledge of how the store layout should work. They help with advertising the store when you are opening a new store,” he goes on.
He particularly values the help from his business development manager at Costcutter. “He's always coming around giving you ideas, and especially with multiple stores, he'll go and look at the stores and if there's an issue, he come back to me,” he says. “For example, he goes to Derby more than I go to my Derby shop and feeds back, so he's got my eyes on the road.”
Costcutter Southborough
The integration of Costcutter into Bestway Wholesale’s retail proposition is also working well for him. Pete’s Meopham store, opened in January this year after a complete refurbishment, was the first dual-branded Costcutter-Bargain Booze store under Bestway’s dual-store strategy.
The innovative concept allows retailers with Bestway symbol groups like Costcutter, Select Convenience and best-one to take their beers, wines and spirits offer to the next level through the Bargain Booze store element, while the focus remains on a strong fresh food offering and a strong presence of local and regionally sourced products.
Pete says the concept has definitely helped the store to stand out, as the 1800 sq ft site trades less than 100 yards from a multiple convenience store (Tesco Express) that has been there for many years.
“Sales have gone up about 125 per cent overall and alcohol sales have more than doubled,” he says. “The key point of difference is Bargain Booze, because there's no other convenience store in the area that offers the same range of alcohol and that pricing that we can offer. Also, in that particular store, we have a lot of local suppliers for food products.”
Pete believes that the Costcutter takeover by Bestway Wholesale gives retailers more opportunities to buy stock from, in addition to the benefits expected from greater buying power, but he feels that an offer like Co-op own brand range is essential for the success of the stores.
“I think a major, a multiple own brand is vital. Whether it's Co-op or another supermarket own brand, it's important. I don't think having an independent own brand will work. It needs to be a multiple own brand,” he says.
Investing in stores
Pete is one retailer who continuously invests in his stores. He did a major refit of his Brockley store in 2018 and opened the Southborough store in September 2020. Now, the latest one, at Meopham, has seen the site double in size with a big extension.
He is known for his meticulous, data-driven approach to store openings and refurbishments, backed by thorough research of the area and demographic. He also makes use of the data on their customer persona from Costcutter’s Shopper First programme and tailors his range accordingly.
At present, Pete’s priority is to make sure that the refrigeration is up to date. “Because obviously, we are having this [energy bills] issue, so making sure you have got new refrigeration which is more energy efficient. At the moment, we are focusing more on energy consumption. The store has got an older lighting system. We are upgrading it to LED lighting. The next sort of 18 months will be [about] energy efficiency,” he explains.
Costcutter Brockley in Lewisham
While the cost-of-living crisis and inflationary pressures affect the business, Pete hopes that the customers would not abandon their local stores, just as in the Covid-19 pandemic.
“I think people are not going to supermarkets to do a larger weekly shop. They are going to stay more local and do daily shopping,” he says, adding that people would also prefer to have a good meal at home instead of eating out in restaurants. “So they come in and get a good quality meal and a nice bottle of wine, which is going to save them a lot more money than going to a nice posh restaurant.”
He has seen a decline in shoppers since the pandemic restrictions ended, but the sales have now “levelled up”, he reveals. “It's back to what it was. For the last year, if you look month on month, we are now actually up. We are still in a good place.”
Pete agrees that margins are going to be an issue if the current situation persists. “We are seeing price increases on a daily basis at the moment. So I do think margins will become an issue,” he says.
“The advantage I had, well, I've got access to Costcutter, I've got access to Bestway cash and carry, obviously, we have got the margins and so I can shop around and find cheaper goods. Possibly my cost of goods can be reduced by having access to all the different wholesalers,” he adds.
Pete Patel
However, Pete wants retailers to bear in mind that everyone is in this cost-of-living crisis, and this is not the time to make high margins.
“It is important to be reasonable so the customer does feel that they're getting a good value. Running good promotions, making sure they have got good value perception when they come into the store is important,” he suggests.
And it's also important to stock a wide range for your local area, he adds. “I think there's always going to be a requirement for good independent retailers. So someone new is coming in, just do the research of their local area and see what their requirements are.”
Home secretary Yvette Cooper has announced plans to rebuild neighbourhood policing and combat surging shop theft as part of an ambitious programme of reform to policing.
In her first major speech at the annual conference hosted by the National Police Chiefs’ Council and Association of Police and Crime Commissioners on Tuesday, Cooper highlighted four of the key areas for reform: neighbourhood policing, police performance, structures and capabilities, crime prevention.
The initiatives she announced include:
a Neighbourhood Policing Guarantee to get policing back to basics and rebuild trust between local forces and the communities they serve
a new Police Performance Unit to track national data on local performance and drive up standards
a new National Centre of Policing to harness new technology and forensics, making sure policing is better equipped to meet the changing nature of crime
The home secretary also announced more than half a billion pounds of additional central government funding for policing next year to support the government’s Safer Streets Mission, including an increase in the core grant for police forces, and extra resources for neighbourhood policing, the NCA and counter-terrorism.
In her speech, Cooper said that without a major overhaul to increase public confidence, the British tradition of policing by consent will be in peril.
“I am determined that neighbourhood policing must be rebuilt,” she said, pointing to its decline over the past decade. Cuts to community-based roles have left town centres vulnerable to rising crime and antisocial behaviour, she added.
“Shop theft is up at a record high, street theft is up 40 per cent in a year… Criminals – often organised gangs – are just getting away with it. We cannot stand for this,” she said.
Cooper reiterated the government’s commitment to deliver an additional 13,000 police officers, PCSOs and special constables in neighbourhood policing roles, adding that further steps will be announced in the coming weeks.
The reforms will restore community patrols with a Neighbourhood Policing Guarantee and an enhanced role for Police and Crime Commissioners to prevent crime. The changes will also ensure that policing has the national capabilities it needs to fight fast-changing, complex crimes which cut across police force boundaries.
“The challenge of rebuilding public confidence is a shared one for government and policing. This is an opportunity for a fundamental reset in that relationship, and together we will embark on this roadmap for reform to regain the trust and support of the people we all serve and to reinvigorate the best of policing,” Cooper said.
Retailers are right to warn of potential job cuts as a result of tax increases announced at last month’s budget, Bank of England governor Andrew Bailey has said.
Bailey appeared before the cross-party Treasury select committee on Tuesday (19), after almost 80 retailers claimed rising costs would make “job losses inevitable, and higher prices a certainty”.
“I think there is a risk here that the reduction in employment could be more. Yes, I think that’s a risk,” Bailey said, adding that depending on how companies respond, there could be a bigger reduction in employment as a result of the NICs rise than the 50,000 jobs projected by the government’s spending watchdog, the Office for Budget Responsibility (OBR).
Bailey suggested the Bank’s monetary policy committee (MPC) would continue to reduce interest rates slowly from their current level of 4.75%, allowing time to assess the impact of the tax changes.
Rachel Reeves’s first budget increased taxes by £40bn, which Labour said would be used to fund creaking public services. The biggest revenue-raiser was a £25bn rise in employer national insurance contributions (NICs), which has prompted a backlash from business groups.
In a letter to the chancellor, retail bosses claimed this and other changes would cost the sector £7bn and lead to layoffs. Signatories included senior figures from Tesco, Greggs, H&M, B&Q and Specsavers.
The letter, which was organised by the British Retail Consortium (BRC) and signed by 80 companies, warned the industry faces £7bn in increased costs as a result of changes to employers’ National Insurance, a higher minimum wage rise and levies on packaging.
It added that job losses were now “inevitable”, as a result of the “sheer scale” of the new costs on business.
The letter continued: “For any retailer, large or small, it will not be possible to absorb such significant cost increases over such a short timescale. The effect will be to increase inflation, slow pay growth, cause shop closures and reduce jobs, especially at the entry level. This will impact high streets and customers right across the country.”
The BRC estimates that retailers will face a £2.3bn bill from April, after the implementation of the increase in employer NICs from 13.8 per cent to 15 per cent, as well as the reduction in the earnings threshold when they must start paying it, from £9,100 to £5,000.
Meanwhile, retailers are understood to have been contacted by the Treasury last week to find out whether they planned on giving their support to the letter, which criticised the Chancellor’s decision to impose extra costs on the industry. One industry source suggested the Government had been thrown into a “tizzy” by the prospect of a public letter rebuking the Chancellor.
The British Independent Retailers Association (Bira) has urged independent shop owners to reach out to their local councils about the government's newly announced High Street Rental Auction (HSRA) powers, which aim to tackle persistently vacant commercial properties on UK high streets.
Introduced through the Levelling Up and Regeneration Act 2023, the HSRA legislation will come into force on 2 December. It will give local authorities the ability to put the leases of long-term empty shops up for public auction, allowing businesses and community groups to secure short-term tenancies.
Andrew Goodacre, CEO of Bira, said: "The introduction of High Street Rental Auctions is a positive step forward in revitalising our town and city centres. For far too long, disengaged landlords have been allowed to leave key commercial properties sitting vacant, to the detriment of local businesses and communities."
"We urge all independent shop owners who have experienced issues with persistently empty premises in their area to engage with their local council. These new rental a provides an opportunity for retailers and other organisations to gain access to high street spaces that may have previously been off-limits."
The government has committed over £1 million in funding to support the HSRA process, which aims to breathe new life into town centres by bringing businesses, community services and customers back to the high street.
Goodacre added: "High streets are the beating heart of our local communities, and we cannot allow them to wither away due to landlord inaction. These new rental auction powers give opportunities to established or new retailers to secure affordable, short-term tenancies and expand their reach within their community."
Britain's annual inflation rate jumped more than expected in October to back above the Bank of England's target as households and businesses faced higher energy bills, official data showed Wednesday.
The Consumer Prices Index reached 2.3 per cent from a three-year low of 1.7 percent in the 12 months to September, the Office for National Statistics said in a statement.
CPI was last at 2.3 percent in April, the ONS added in a statement, while analysts' consensus had been for the rate to climb back to 2.2 percent.
The Bank of England (BoE) target stands at 2.0 percent.
"Inflation rose... as the increase in the energy price cap meant higher costs for gas and electricity compared with a fall at the same time last year," ONS chief economist Grant Fitzner said of October's data.
Britain's energy regulator Ofgem sets a price cap quarterly that suppliers can charge customers. The latest increase in October was 10 per cent but this is expected to drop markedly in January according to forecasts.
The regulator had cited rising prices on international energy markets owing to increasing geopolitical tensions, and extreme weather events driving competition for gas, as the reasons behind the sharp rise.
"We know that families across Britain are still struggling with the cost of living," senior Treasury official Darren Jones said in reaction to Wednesday's inflation reading and saying the Labour government needed to do more to help.
Food and non-alcoholic beverage prices rose by 1.9 per cent in the year to October, up from 1.8 per cent to September 2024. The annual rate of 1.9 per cent in October compares with 10.1 per cent in the same month last year.
Analysts said despite prices rising faster than expected, the BoE remained on course to keep cutting British interest rates.
"But it lends some support... that the Bank will skip the December meeting and cut rates only gradually, by 25 basis points in February and at every other policy meeting until rates reach 3.50 percent in early 2026," forecast Ruth Gregory, deputy chief UK economist at Capital Economics research group.
The central bank earlier this month trimmed borrowing costs by 25 basis points to 4.75 per cent.
Following its decision, the BoE added that a maiden budget from Britain's Labour government in October, featuring tax rises and increased borrowing, would boost growth but also lift inflation.
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Nestle logos are pictured in the supermarket of Nestle headquarters in Vevey, Switzerland, February 13, 2020
Nestle on Tuesday said it will increase investment in advertising and marketing to 9 per cent of sales by the end of 2025. The company also announced plans to make its waters and premium beverages activities a global standalone business from New Year.
Unveiling a plan to fuel and accelerate growth at a Capital Markets Day for investors and analysts, the Swiss group also said it aims cost savings of at least CHF 2.5 billion (£2.25bn) above existing initiatives by end 2027 to fund increased investments.
“Our iconic brands and innovative products connect with people every day, at every stage of their lives. These strengths give us a unique advantage and position us to win in the marketplace. We will now invest further in our brands and growth platforms to unlock the full potential of our products for our consumers and our customers,” Laurent Freixe, Nestlé chief executive, commented.
“Our action plan will also improve the way we operate, making us more efficient, responsive and agile. I am confident that we can deliver superior, sustainable and profitable growth and gain market share, while transforming Nestlé for long-term success.”
Nestlé confirmed its 2024 guidance, with organic sales growth of around 2 per cent, underlying trading operating profit margin of around 17 per cent and underlying EPS broadly flat in constant currency. Looking ahead to 2025, the company expects an improvement in organic sales growth compared to 2024, with the underlying trading operating profit margin anticipated to be moderately lower than the 2024 guidance.
Nestle last month lowered its outlook for 2024 to 2 per cent as the company reported falling sales for the first nine months of the year.
The consumer goods major, whose brands range from Nespresso coffee capsules to Purina dog food and Haagen-Dazs ice cream, had already cut its annual sales growth expectations from 4 per cent to 3 per cent in July.
The company on Tuesday said it expects organic growth to be over 4 per cent in the medium term, in a normal operating environment, with an underlying trading operating profit margin of over 17 per cent.
Nestle said the its new action plan will allow it to drive category growth and improve market share performance.
Actions will include targeted investments in winning brands and growth platforms, more focused innovation activities to drive greater impact, and systematically addressing underperformers.
Nestle will step up investment in advertising and marketing to support growth. The necessary resources will be generated through cost savings and growth leverage.
As part of the action plan to drive operational performance, Nestle’s water and premium beverages activities will become a global standalone business under the leadership of Muriel Lienau, head of Nestlé Waters Europe, as of January 1, 2025.
Nestle said the new management will evaluate the strategy for this business, including partnership opportunities.