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Northern chain takes on supermarket giants

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  • Northern chain takes on supermarket giants

    Edwin Booth is proud to be at the helm of England's last surviving independent supermarket chain.



    The 162-year-old upmarket grocer has 26 stores across Lancashire, Cumbria, Yorkshire and Cheshire.

    The first store was opened by tea dealer Edwin Henry Booth in Blackpool, and Edwin Booth Jr is the fifth generation of the founding family.

    While his forefathers grappled with World Wars and the switch from counter to self-service, Mr Booth's challenge has been to fend off the growing dominance of the 'Big Four' - Tesco, Asda, Morrisons and Sainsbury's.

    It's a battle that is likely to get tougher as the economy heads into recession.

    "We know our shoppers," he says, over lunch at Booths' newest store in Lytham, Lancashire.

    "We don't just process our customers like Tesco."

    Competition

    To date, Booths has done a good job of keeping the competition at bay. In the 2007 financial year, the company saw profits rise 73% to £6.9m. Sales rose 5.4% to £243.6m.

    In 2006, the chain was ranked as the second best retailer in the world by The Grocer magazine - trailing US organic retailer Whole Foods Market.

    No easy feat in the UK's cut-throat retail market.

    Tesco, Asda, Sainsbury's and Morrisons control three-quarters of grocery shopping in the UK, and smaller rivals can find it tough to negotiate the same good deals with suppliers or secure the best store sites.

    Mr Booth credits his loyal customer base, who are attracted by the high-quality food, local provenance and friendly service. The retailer sources 25% of its products from the local region.

    "People tell us it's about cost reduction," says Mr Booth. "But we've proved it's about serving people well."

    Based predominantly in Lancashire market towns, the chain has also benefitted from less competition from rivals such as Waitrose, which traditionally has had a stronger presence in the south of England.

    Aldi effect

    Mr Booth is well aware that customers might "trade down" to lower-cost outlets as the economic downturn begins to bite.

    Since July, the chain has begun to see a reduction in revenues.

    "We're still making a profit but not what we expected," he says.

    But the firm is on the offensive.

    In December, it launched "a raft" of promotions and more will be introduced this month.

    "We've shifted the emphasis to look at things like sausages and meatballs - things that enable you to feed yourself at reasonable cost but are still tasty."

    But Mr Booth acknowledges the aim isn't "to take people away from Aldi and Netto".

    Booths has also forged a buying alliance with Waitrose that will enable it to negotiate better prices with major suppliers, and the chain broadcast its first TV ads at the end of the last year.

    The chain's Lytham store was quiet on a December weekday.

    Elizabeth Wilson, a full-time mum, visits the store once or twice a week, mainly because she lives nearby.

    "There are some good offers," she says.

    Confident


    Mr Booth is confident about the long-term future.

    On a firm financial footing, the chain has been able to offer help to suppliers hit by the credit crunch.

    He plans to open eight stores in the next 10 years - venturing further afield to County Durham and to big cities like Leeds and Manchester but remaining close to the company's northern roots.

    This could mean the chain encounters more of the local opposition usually reserved for Booths' bigger rivals.

    Plans to open stores in Grange-over-Sands in Cumbria and Barrowford in Lancashire have hit planning objections but Mr Booth says they have been able to respond to local concerns.

    Success

    Founded in 1847, Booths is older than all the 'Big Four'.

    Sainsbury's first store opened in 1869 in London and William Morrison established his Bradford market stall in 1899.

    Tesco and Asda are both 20th Century creations.

    Is Mr Booth puzzled that his company has not been able to replicate the scale of their success?

    He attributes Booths' smaller reach in part to geography.

    Sainsbury's and Morrisons grew up in heavily populated, urban areas, while Blackpool - the location of Booths' first store - "has the Pennines and sheep to the north and the Irish Sea to the west".

    But it is also to do with values.

    The chain has looked at expanding quicker but its small, local suppliers would not have been able to keep up.

    "We want to take the quality of the offer with us."

    "That's what makes us unique."

    BBC NEWS | Business | Northern chain takes on supermarket giants

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