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Mike Estlea has followed an interesting road to his current role managing a successful Budgens in the Berkshire commuter town of Newbury. And that road has moved beyond just owning and managing a store to a more fundamental role in the local community.
He originally started at Waitrose, progressing to management roles in-store between 1984 and 1986. He then left grocery retail somewhat quickly to run several Pizza Hut restaurants for an eight-year stint until 1994. Despite the useful lessons he learnt in terms of managing staff and providing "great customer service" during that time, he says he harbours no ambitions to run a restaurant alongside a store!
The lure of grocery however proved too strong, and Mike returned in 1996 to take a key position at Budgens head office. While in charge of merchandising, he honed many of the skills in terms of ranging and supplier liaison that would stand him in good stead when the Newbury opportunity came up.
He actually spent a few weeks in this store when he was training up for his head office role, so it is something of a homecoming. His fondness for the friendly, local community nature of the store, plus the fact that the store is not far from his home, meant he was "absolutely determined" to get the franchise and make Newbury his own. He says that, like Victor Kiam, "I loved it so much, I came back and bought the store!"
The position was advertised in 2006 to take on the franchise in the quiet Berkshire town. However, despite the leafy comfort of the surroundings, the proposition of typical strong head office support for a newly divested store and Mike's own strong experience and desire, the role was far from a soft option. The store (which first opened as a Budgens in 1973) was struggling, with a limited range and poor local supplier presence, and it was surrounded by big rivals that were stealing the march on it. Waitrose and Sainsbury's have stores within two miles, there is a Tesco Extra a mile away and a Metro in the centre of town. This smallish convenience supermarket, just off the beaten track, may be somewhat 'surrounded', but it's now fighting back with Mike at the helm.
Mike has added 1,000 lines since he took the franchise in July 2006, considerably upping the local element through his knowledge and ability to liaise with local suppliers. As a result, takings are going in the right direction. Sales are up 10% like-for-like since the store was divested from the central Budgens operation, which is impressive, but Christmas 2006 was a particular triumph, with sales up a massive 25% on 2005. Mike says this was chiefly driven by the improved range, with customers not just topping up groceries as they had been but getting a "full weekly shop" from the store.
According to Mike, the strategy he implemented to provide a 'destination' offer was a success: "It was to enable customers to come into the store and do a full shop for their Christmas food and drink, so they didn't have to go to the major competitors." Taking this risk on stocking considerably more lines bore fruit - customers were actually coming to the store because the major multiples had run out of essentials, he says.
Recently, the local mults ran out of pumpkins a couple of days before Halloween, when Mike's store still had stocks. He says his was the only store in the area to actually have them on Halloween itself.
All areas of the store have shown sales growth since Mike took over, but the most noticeable uplifts have come in bakery and fresh produce. Customers have increased by around 5% to 6,000 per week and individual customer spend is also up.
Mike puts this success down to not only the ranging and merchandising improvements (availability has been a key focus with his head office merchandising experience). Great customer service is what a store such as his lives or dies on, with bigger competition offering similar goods cheaper up the road. "A lot of my customers come on foot. This store offers an important community service for them that they can walk to." And they also want staff they can chat to.
He says empowering his staff has enabled him to become more of a community figure than just a store manager. "Thanks to my team, I'm freed up to do things like work with local schools on charity days." Providing food or drink for such events allows Budgens the opportunity to get its name across to consumers and tell them about the store. He says donating items free of charge is well worth it when the loyalty generated can be long-term, and he prefers such promotion to direct mail or other less subtle approaches. "We will be trying to get on local radio again soon, doing things such as our local ranges," he says.
Examples of the store working with local organisations include supporting fundraising activities at Falkland Primary School - everything from providing free stock to raffle prizes, even allowing the school to resell certain items. The store also sponsors the local cricket team, getting pitch-side advertising and branding in the club newsletter.
When I met Mike he had just returned from his short honeymoon in Rome. He is readjusting to work well, maintaining a happy face and a calm demeanour despite the imminent arrival of hordes of schoolchildren in his store. A comprehensive of 1,200 pupils lies just down the road and Mike says his store is like their tuck-shop. Just after 3pm every weekday it goes "mad".
Mike says the biggest challenge for 2008 is to ensure that the community-focused nature of the store is fully promoted to customers. With his laid-back, friendly nature, as well as his evident enthusiasm and knowledge, Mike is certainly the right man for the job. n
Has the number of customer complaints about the price of goods increased recently?
