Business Model
Our business model is to directly source a targeted limited range of best-selling FMCG and General Merchandise products at the best prices we can. We pride ourselves on being an Everyday Low Price (“EDLP”) retailer with a relentless focus on maintaining excellence in operational standards and an Everyday Low Cost (“EDLC”) operating model.
Differentiated operating model
Targeted grocery offering
We offer a targeted range of branded convenience grocery products covering ambient food, soft drinks, confectionery and alcohol, in addition to FMCG categories such as toiletries and cleaning products. The offer is complementary to, rather than a substitute for, a customer’s fresh grocery shop and delivers great value on the branded products they regularly buy for their home and families. We enjoy long standing relationships with many global suppliers, ensuring consistency of supply and delivery.
Compelling higher ticket General Merchandise offer
We sell General Merchandise products across a broad range of product categories including homewares, electrical, gardening, toys and DIY. This broad choice at great value encourages a “treasure hunt” browsing experience, which is something customers enjoy and often leads to impulse purchases, helping to drive average transaction values.
Disruptive sourcing process
Our direct sourcing process is a key element of our ability to offer General Merchandise products at disruptive prices without compromising on product quality. Our buying teams are constantly monitoring the prevailing consumer trends, and we then source directly from factories in the Far East without the need for a Far East exporter or UK distributor in the supply chain, ensuring we benefit from advantageous cost prices. Alongside the sourcing of branded products, we also have an in-house team responsible for the design and packaging of private label products in categories such as Homewares, who work directly with factories in the Far East to bring on-trend products to market.
SKU discipline
We maintain a disciplined approach to SKU's (“Stock Keeping Unit”), focused on the “best sellers” only. This focus and hence volume for the selected SKU creates buying power and allows us to benefit from advantageous buying terms, whilst also keeping our operations simple and agile. This SKU discipline also ensures that our buying teams adopt a “clear as you go” markdown strategy by selling through an under-performing SKU prior to introducing a new product into the range.
Seasonal flex
We actively change our store floor space throughout the year, so the product offering is aligned to seasonal trading patterns, with seasonal space typically 20% of the store footprint. In the Spring/Summer season we offer a compelling range of garden and outdoor living products, whereas in the Autumn/Winter season this space is occupied by toys and Christmas decorations. This allows us to minimise seasonal low trading periods, unlike single category specialist retailers.
Format flexibility
We are able to successfully trade from both town centre and out-of-town locations. The town centre stores are well positioned to benefit from convenience shopping and have a greater emphasis on grocery and FMCG products, whereas the out-of-town stores are typically larger and carry the full product offering. We are increasingly seeking out-of-town locations where we are also able to have a Garden Centre and continue to penetrate southern areas of the UK.
Cost efficiency
The adherence to a low-cost discipline is key to ensuring we can maintain a price advantage over our competitors. We aim to maintain a low store rent base, flexible store wages model, and tightly controlled variable operating costs. By avoiding complexity, we pass the savings from our low-cost model to our consumers in the form of everyday low prices.