Simply Fresh’s Kash Khera tells Nick Shanagher that c-stores need to embrace fresh to survive.
“Look at the two key messages of our values in our windows,” said Kash Khera, managing director of Simply Fresh: ‘We Love Food’ and ‘We Love our Community’ beam out from the front of his new Leamington Spa store.
Khera’s vision is driving one of the most exciting symbol groups on the UK high street in partnership with the wholesale channel.
Kash Khera’s top tips
Stock what they can’t: C-stores will become ‘fresh hubs’. Bakery, fresh, food for now, food for tonight, food for the weekend, fresh meat, fruit and veg – these are all the things people cannot stock up on.
Small is beautiful: Smaller and half-pack sizes and mixed cases are necessary to help retailers move from selling ambient to selling fresh and chilled.
1,600 sq ft: This will be the size of the ideal convenience store in the future, as people buy bulky items, long-life products and non-foods from discounters and online.
Simply Fresh is anchored by a supply agreement with Costcutter as its trade partner for its core range. On top of this, it encourages local deals to deliver its fresh promise.
“We want our retailers to use local suppliers for fresh fruit and veg, meat, and bakery,” said Khera.
“Costcutter does the deals with the big guys and this leaves us free to have conversations with people who are more relevant to our local shops.”
Simply Fresh works closely with its retailers to shape the physical environment of the shops in its network. It also helps with key negotiations, such as with landlords. The stores are high-end, aiming at the Waitrose and M&S Simply Food shopping trip, rather than competing with Aldi and Lidl.
As the convenience market grapples with the launch of franchise models, demanding more discipline from retailers, and with Tesco at the back-end offering bigger margins, the Simply Fresh model needs to be understood.
Khera thinks that the arrival of One Stop is just business as usual in a highly competitive fast-evolving retail channel. His network is peppered with great retailers such as Vic Grewal or Simon Biddal who have achieved strong sales growth by adapting the Simply Fresh model.
Sunder Sandher’s One Stop is a short walk away from the store we are in. Its weakness, Khera thinks, is that One Stop has a ceiling in terms of what it can do as a proposition for a particular retailer. In other words, he believes the format can only take a shop to around £25,000 a week in locations where Simply Fresh could do £50,000 to £60,000 a week.
Khera is convinced the future for the convenience channel lies with smaller stores of around 1,600sq ft, partly because of a rise in online sales of bulky, non-food and long-life items. This will be marketed with ‘buy now, pay slowly’ deals, including supermarkets and discounters.
“Therefore, fresh is important because you cannot store it in bulk. A convenience store will be more about bakery, fresh, food for now, food for tonight, food for the weekend, fresh meat, fruit and veg – all the things that people cannot stock up and buy for.
“If you look at fresh fruit and veg, fresh meat, and bakery – the key fresh areas – people cannot get these delivered, unlike ready meals, which have a 10‑day shelf life, and cheese which is longer. Therefore convenience will turn into a fresh hub.”
This is what symbol groups have to help retailers to be good at. In particular, they have to help independent retailers understand how to invest in the proposition to offer shoppers.
The journey from selling ambient and the cash & carry mentality to delivered wholesale and then fresh and chilled needs to be supported. Smaller pack sizes, half-pack sizes and mixed cases are necessary, Khera says, to help retailers on this journey.
This is expensive for wholesalers and manufacturers as the retailers are not buying products that then go to waste.
Khera says that this fits with the need for retailers to be more disciplined about the ranges they stock and effective merchandising. On a recent retail visit, he challenged a friend about the massive range of soft drinks he was offering.
“Let’s watch a shopper in action,” he said.
The shopper stood mesmerised for nearly two minutes, not seeing what he wanted.
They asked him what he was looking for and he said a bottle of water.
“Too much choice can be dangerous,” said Khera.