My Local boss Mike Greene insists the newly-launched retailer can compete with its convenience store rivals, despite Morrisons struggles in the sector.
Greene spearheaded a management team backed by Greybull Capital that acquired 140 c-stores from the supermarket chain in September. The first tranche of newly-rebranded My Local stores opened their doors last week following a “mammoth” overnight task to change fascias, in-store signage and restock shelves.
Morrisons boss David Potts made no secret of his desire to offload the grocer’s M Local c-store chain, but Greene is adamant he is identified the problems within the business he inherited - and thinks it can now become a retailer that “people will want to emulate”.
In a video interview with Retail Week, Greene said: “The reality is, these stores turnover more than double the average convenience store turnover in the UK, so it’s hard to say they are underperforming stores. The rent is between 3.5%-4% of sales in all of these stores, so relative to sales, it’s not in a bad place.
“The stores were performing, but the thing that was causing this business a problem and creating the loss in the business was actually above store and distribution. Above store there were 150 people very much pushing things into stores, rather than working with managers to pull through the product that was right for their locations.
“In addition, they built three distribution depots at a he cost with huge resource, with a view to scaling up. If Dalton [Philips] had got 500-1000 stores very quickly, it would have been a very different commercial scenario. Our cost of distribution through Nisa will be less than a tenth of Morrisons cost of distribution.
“A lot of those problems fell away on completion because we didn’t take Morrisons distribution, we didn’t take an overly-weighted head office structure and the stores were performing quite well already and are in their growth curve.
“The business grew at around 15% while we were negotiating, because it takes about four years for a c-store to go from zero up to its maturity. On the basis that most of the stores are still under two years old, we’re still on that maturity curve and the stores are growing week-on-week.”
Greene, who worked a marathon 40-hour shift from 4am last Sunday to play his part in store openings and refits last Monday, has pinpointed what he calls “the five Fs” to drive My Local’s success: a fresh offer, full shelves, fair prices, friendly staff and fast service.
But perhaps the most important factor is a localised offer – something Greene believes Morrisons did not offer shoppers in its convenience stores.
My Local is far from just “shoving a ‘Y’ on M Local”, Greene insists. Instead, the name encapsulates the “necessity” of introducing an offer that is distinct to each store and its catchment, with Greene already targeting locally produced beers and sausages to bring into shops.
Asked if that localised offer and the five Fs will help the retailer compete with supermarket giants Tesco and Sainsbury’s in convenience, Greene said: “I really think we can.
“It is a competitive sector and people think it’s a mature sector because it’s getting better all the time, but if you compare us to America or China where there is still a growth in convenience and there are more stores, we have less than 50% of the c-stores to population ratio than those countries do. We are still a long way from being mature in terms of the number of c-stores the UK can handle.
“We are already starting to do far more localisation, looking at letting the stores choose their own charity within a one-mile radius, because 80% of shoppers come from within one mile.
“We will compete to become a retailer to be reckoned with and one that people will want to emulate. We will get better and better as each day passes.”
Mike Greene, My Local
“We make sure we don’t throw away waste – we’ll give it to homeless shelters and connect more with the community. It’s about feeding the community that feeds us, supporting the community that supports us.
“The combination of those global supermarket standards we’ve inherited, with the local activity that our teams are going to have the freedom to be involved with will be a great marriage that will enable us to compete to become a retailer to be reckoned with and one that people will want to emulate. We will get better and better as each day passes.”
That gauntlet laid down by Greene is accentuated by a pledge to give “100% focus” to the c-store business – something the likes of Dave Lewis and Mike Coupe cannot afford to do at their respective retailers with the bigger supermarket fish still to fry.
Greene’s focus is highlighted by the way My Local store managers and regional managers have been given a direct line to their chief executive to discuss any problems and ideas with him directly.
And after committing to the My Local project for “a minimum of seven years”, the hotly contested convenience sector certainly seems to have found another player to be taken very seriously.