Vision for change - and money to do it

21 March, 2008

Can a new strategy help the Thresher Group better compete in a tough high street?

Christine Boggis report

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The Thresher Group's new strategy aims to give each of its fascias a clearer focus to reverse declining profits. And new owner Vision Capital, which took over the business in June, is prepared to pay out to make that happen.

Shop managers have welcomed investment in a new EPOS system and customer relationship management software, but the group is also ploughing cash into marketing - with a new marketing director, Vibha Hardaker, and plans for advertising from leaflets to TV in the pipeline.

On top of that, it is investing in a new distribution deal with Christian Salvesen, which will also give it the capacity to launch online sales - for Wine Rack this summer and later for Threshers.

The company reported £775 million turnover and £20.7 million profits in its last accounts at Companies House, to July 2006. But chief executive Yvonne Rankin says: "It's been a performance that's been in decline over recent years. We are very clear that we are about rebuilding sales and rebuilding profit.

"There is a great opportunity in this sector for a high-quality specialist drinks retailer. I think we have already got fantastic brand loyalty, but it is a market in growth and if we are really clear about our offering to customers and react to their needs and their requirements, there really is every opportunity for this business to get stronger and stronger."

Rankin also wants to establish clear internal communications - which many Thresher Group workers have complained are missing from the company.

"I am determined and committed to making sure we have very solid communication. We want to make sure managers believe they have a clear communication line within the organisation to make sure we can resolve any issues and improve the business," she says.

She also says managers have reacted "incredibly positively" to changes. Those OLN contacted were cautiously optimistic, although some were concerned about losing three-for-two promotions. Now they must wait and see if the new strategy and investments have the desired effect.

Wine Rack

Wine Rack's True Blue concept will be rolled out to cover 370 existing Wine Rack and Threshers shops, with 100 new stores to be added over the next four years. It will have a 500-strong wine range priced around £5-£7 and some higher-end Bordeaux and Burgundy, plus local beers and a range of premium spirits.

A Wine Rack manager, whose shop has recently converted to the True Blue format, says he is pleased with the new look, and confident that it will help boost sales despite the current economic climate.

"I'm all in favour of the changes," he tells OLN. "Converting to True Blue has really freshened up the shop; it has brightened up the colours and removed some of the clutter that builds up over time. I'm confident and really happy with the way it has gone and the process of change was very quick and very active. It does feel different, brighter and airier. I think it's good and positive."

Threshers

Threshers will be repositioned to appeal to "mid-market urbanites" who generally use the shop for opportunistic purchases on their way somewhere. The 300-350-strong wine range will be brand-led, with all the major brands represented, as well as a more diverse European offering.

A Threshers manager comments: "They have now found some money at last to invest in us. We have known all along - for years as managers - what we need, and we have requested new tills, which up to now they never appeared to have the money for. Now they have got the money: let's go - the future looks bright provided they put the investment in."

The Local

The Local will become a drinks-led convenience store with a brand-dominated wine range at "accessible" price points, including a strong £3.99 offering, with promotions and multibuy offers, plus some 200 convenience SKUs such as bread, milk and tea. Another 100 stores will be opened in the format.

One manager says: "I think the changes will be good in the long run. It is all a matter of seeing how it goes in time - let's see if we get the customer base back that we used to have. A lot of the beer deals in supermarkets - like the case deals they are doing at the moment with two for £16 - just knock us out of the water."

Scotland

The Scottish business - which currently has 220 shops in a number of formats, including some Threshers, Victoria Wine, The Local and 107 Haddows - was up for sale but has now been taken off the market.

Thresher Group is doing customer research into the estate with a view to repositioning it soon, and 30 Wine Racks will open north of the border.

Victoria Wine is expected to be phased out, but the company has not yet decided which fascias the Scottish arm will operate under, but it is likely some will be rebranded to streamline the estate.

The franchise scheme

Thresher's much-publicised franchise scheme was put on hold pretty much as soon as Rankin joined the business as chief executive, by which time 130 shops had signed up.

The group has decided to keep the programme on hold for another year before making a decision about its ­future.

Rankin says: "If we were to extend it in the future it would be about putting on new stores, rather than franchises taking up our existing estate - it would be adding further value."

One Thresher franchisee told OLN the changes will not affect them much - they got new tills as part of the franchise deal and are able to set their own promotions and prices regardless of company strategy.




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