Rural retailing generally receives little publicity but the spotlight flickered over it recently with the news that the largest player, Mole Valley Farmers, had acquired the 11-store farming supplies business CWG.
The move prompted Retail Week Knowledge Bank to update its Mole Valley Farmers profile and incorporate Mole Valley’s other main retailing component, SCATS Countrystores acquired in 2002.
The result is an operation with combined retail sales of about £130m excluding VAT, comprising the nine Mole Valley stores with latest annual sales of £76m, 19 SCATS stores with sales of £38m, plus the 11 CWG stores. There is also an agricultural merchanting subsidiary D&I Bridgman & Sons not included in our calculations.
Mole Valley has two main competitors: Countrywide Stores has 47 stores and latest annual turnover of £70m; while Wynnstay Group’s retail operations comprise 30 Country Stores plus 16 Just for Pets stores, with combined annual sales of £54m.
Mole Valley’s retail sales growth across the eponymous and SCATS formats has consistently outperformed the wider retail average, rising by close to 60% in the seven years to 2008/09. Moreover, its store total has remained unchanged, although trading space has risen about 15% in the interim.
If Mole Valley Farmers’ retail operations have an Achilles’ heel it is perhaps their modest profitability. Admittedly the SCATS margin did double in the latest year to 3.1%,
but Retail Week Knowledge Bank calculates that Mole Valley’s equivalent figure was only 1.2%. Countrywide Stores achieved 3.8% and Wynnstay Group 5.6%.
Now that Mole Valley has combined its retail operations and added CWG, management will doubtless be expecting economies of operating scale to bring sustained margin improvements.