Retail Week

31 January 2014

The grocery industry has just endured what Sainsbury’s boss Justin King described as the worst Christmas in his 30 years of retailing.

You wouldn’t know it from the confident stride of Booths chairman and retail veteran Edwin Booth as he walks through his Knutsford store, fresh from reporting buoyant festive numbers.

While the big four grocers were squeezed, the discounters and premium retailers charmed shoppers over the vital golden quarter and took more than their share of the spoils in an ultra-competitive market. Booths, the upmarket northern grocer, posted a 6% rise in like-for-likes in the 21 days to January 4, including the busiest December 23 in its 167-year history.

“Customers care about quality and provenance at Christmas - they want to know they are buying the best, they want something exceptional to serve, made by someone who cares about the food they produce,” Booth explains.

“We have to be a porcupine and appear bigger than we really are”

Edwin Booth, Booths

He attributes the festive success to the luxurious 180-page brochure the retailer produced that allowed shoppers to reserve online and collect in store. Booths’ premium offer also enticed festive spend as products such as venison and Herdwick mutton proved popular Christmas dinner alternatives.

Kurt Salmon Senior Manager Mark O’Hanlon says: “Cleverly, Booths launched its festive marketing campaign early by publishing a really inspiring Christmas book, which seems to have worked - encouraging their customers to order ahead of time - securing their share of the Christmas wallet.”

While the 29-store retailer is relatively small, it is admired in the grocery industry and seen as a breeding ground for new product trends and innovation, such as live video streaming celebrity chef appearances in its stores using Google’s Hangouts. “We have to be a porcupine and appear bigger than we really are and we have to work hard at telling our story and not be about spin,” Booth says.

A competitive market

We meet on a bracing but sunny day in the affluent town of Knutsford, Cheshire where the retailer’s store sits amid a picture postcard area featuring cobbled streets, an art-house cinema and eye-watering property prices. For those determined to write a narrative of a Britain with a North/South divide, Booths’ heartland defies the stereotype.

Booth walks the aisles of the 25,000 sq ft store, the retailer’s second largest and delivering its highest sales density, and explains how the grocer has developed an enticing store offer. “You do not have the serried ranks of a huge supermarket like Asda. We break up the shopping trip in a different way,” he says.

Booths has introduced the misty veg display employed by rival Morrisons, which is now testing a new mini-hosepipe watering technique at its Morrisons Deepdale - Food Retail Warehouse pilot store a stone’s throw from Booths’ head office in Ribbleton, Preston. Booths’ Knutsford shop also features a bustling cafe, revamped bakery offer incorporating new branding and a ‘wine machine’, where customers can get advice from a sommelier.

The imposing wine sampling station, which sits amid a plush beers, wines and spirits department, features 64 wines and is popular with shoppers, including one customer who regularly drives more than 100 miles for its selection. Thankfully, tipsy customers swaying through the checkouts have not been an issue, Booth assures, adding that he has even received a letter from a customer thanking him for “saving” Boxing Day after they stocked up on Booths’ own-brand Prosecco.

Although the Booth family toasted strong Christmas trading, 2013 was not plain sailing for the retailer.

In its last reported financial year to March 31, 2013, Booths’ profit fell to £6.4m, a drop from £9.5m the previous year, while like-for-likes slipped 1% despite a total sales rise of 2% to £279m.

Since the year-end, trading has varied. “We had a strong summer with the fine weather - this business performs out of its skin in good weather,” Booth says. “September was quiet and then October and November were very, very dull months. We saw a pattern of behaviour - people were using us for convenience early in the week but they were obviously going somewhere else at the end of the week,” Booth recalls.

The grocer responded to that trend by launching the Booths Price Match, equalling the price of 5,500 products at rivals Asda, Tesco, Sainsbury’s and Waitrose in December for loyalty card holders. The initiative was surprising as Booths had previously staunchly avoided promotional price wars.

“It was clear from consumer behaviour something had to be done,” says Booth. “We had already launched the Booths Card and customers were questioning the value of it so it is a great promotion to offer holders.

“People come in for the product but when it comes to the Fairy Liquid and kitchen towels they were going to Tesco. Now we are meeting those needs for them so it looks a success so far. The first two weeks after Christmas have been very strong.”

Eyes further afield

John Nevens, co-founder of grocery marketing specialist Bridgethorne, says: “Booths’ success has been founded on many of the values that we know shoppers regard as important: provenance, quality and customer service.

“If you couple this with its position as an authentic community retailer with direct relationships with, and support for, local farmers and real northern roots and values, it is a winning combination.”

The grocer reinforced its farming links with the acquisition of Preston-based fresh produce supplier Sharrocks in November. Booth says its addition will give the retailer “real authority” in talking to customers about food and the supply chain with a vertically integrated category as well as security of supply. No further takeovers are planned, however.

Nestled in a tranche of market towns across Lancashire and Yorkshire, Booths’ estate serves locations housing affluent food enthusiasts. It plans to open five or six new stores over the next four years, including a shop in Barrowford, East Lancashire where it plans to cut the ribbon in November.

Expansion beyond the North has long been talked about in the media and Booth says it is rising up its agenda. “We have looked at which areas we can reach from our central distribution centre. We will look very carefully at south Manchester, Derbyshire and towns on the Yorkshire/Lancashire borders. Within two years we will start to look at where we go next but we are a way off yet.”

Nevens believes the grocer’s cautious approach to expansion is right. “Booths will need to ensure it manages expansion in a controlled and planned manner that retains its core values at the heart of its proposition. And, as others have found, that can sometimes be a tough balance,” he says.

O’Hanlon observes: “Booths will always be a regional player but with the introduction of its version of a price promise, the loyalty card and a loyal workforce, it has all of the necessary ingredients to continue to grow organically.”

Delivery options

But Booth has spied an opportunity to reach more shoppers nationwide without the need for more stores. The grocer delivered hampers nationwide to people’s homes for the first time this Christmas and believes its revamped own-brand can find a wider audience.

“We will look at the potential for distributing Booths-branded products more widely in the future,” says Booth. “It’s something I would love to do. When I first joined I sent tea to expats who moved to Geneva.”

But he is cautious about whether online is the answer. While larger rivals extol the virtues of online growth, the basic cost of distributing food remains a huge hurdle.

Booths offered collection at Christmas and may roll that out as a year-round service. “We will look very carefully at how we can deliver to homes. The jury is out,” he says.

For Booth, the business’ continued growth is particularly satisfying. He is the fifth generation of the family to run the eponymous retailer. He has a raft of responsibilities outside Booths including as a royal ambassador for the Northwest, a position he was appointed to by Prince Charles.

“With over 40 years’ experience as a retailer, I really love going to work in the morning,” Booth smiles. “I love to keep fit, cycle and play tennis with my family, I love to ski and adore automobiles. I’m one of those people who could do with a week being 14 days long.”

Booth, who is a qualified pilot, is keen to keep his career flying high.

“I see myself being chairman as long as I have the right leadership for growth in the business and can provide proper stimulus and inspiration.

“I do not have weeks of the month away in the Caribbean. I enjoy the company of my customers and my staff,” he says, noting that he is prone to nipping on to the tills to help out.

Keeping it in the family

Booth hopes a family member will continue to lead the business into a sixth generation and there remains a strong family presence. His daughter has done shifts on the checkouts. Henry Booth, the son of Booths’ property director and Edwin’s brother Graham, has just completed his first year in the business. And Edwin’s cousin Simon specialises in central operations and warehousing at the grocer.

For the business, Booth explains that its family heritage is important but the retailer is a serious market contender. “We have been modest in the past but now we are competing,” he maintains.

“We have to try new things. The fact we have to have rigour and discipline is not lost but because we are quite small and grow organically you do not get this formulaic aspect to the stores.”

Booth adds: “We are not a ubiquitous alternative to the major multiples, we are primarily an addition.”

The retailer has developed a stable business model that breeds innovation and a customer base with a fervour for its offer rarely seen among grocery chains.

Booth himself appears so at home among the artisan bakeries and bustling cheese counters of his shops you half expect him to be wearing slippers. With expansion plans afoot, he will doubtless be a feature at the checkouts for some time yet.

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