Rooted in meat and chicken - Supermarket.co.za

Township storewatch
Rooted in meat
and chicken
Besides the strategic location of stores in township and rural areas, key to the success of the Roots
concept is the focus on daily necessities – meat, chicken and basic groceries.
Roots Group uses well-priced
convenience to grow in township market
By Laura Durham
The soft serve station is in
overdrive outside Roots in Protea
Gardens as school goers and city
workers return home to Soweto. By
focusing on everyday needs – meat,
chicken and basic groceries – the
store has succeeded in bringing
convenience home.
Township stronghold
Roots Group was established in 2004 and
moved into the rural and township markets
with its butchery format ‘Roots Meat &
Chicken Butchery Wholesale & Retail’.
Group main member, Manuel Ferreira saw a
gap in the market and bought existing
stores in Hammanskraal, Ga-Rankuwa and
Alexandra to establish the brand as a quality
and competitively priced meat offering.
“People asked why we were going into
the meat industry when everyone was
getting out – but isn’t that the ideal time to
go into it?”
Strong sales in Soweto
John Jardim opened his Roots store in
Protea Gardens shopping centre in Soweto
in April 2007. “We wanted to bring the
convenience home. Our customers were
leaving work in town, climbing into a taxi
and coming home to Soweto but they still
needed to do their shopping. We just made
this easy for them,” explains Jardim.
By belonging to the ICC Buying Group,
they are able to get the best prices, which
Store: Roots Meat & Chicken
Butchery Wholesale & Retail
Location: Townships and rural areas
Average trading area: 700m 2
Average number of tills: 6
Average staff complement: 40
Opening hours: Everyday, 8am–8pm
they can then pass on to their customers
who are extremely brand and price
conscious.
Understanding customer needs is
important and Jardim and store managers,
Shane du Ponte and Munro da Corte
spend all their time on the store floor to
make sure everything runs smoothly and
that customers leave satisfied. His staff is
well-trained and 80% come from Soweto,
which means they know exactly what
customers are after. Throughout the group,
members make sure they employ staff
from the area. “One of the main focuses of
Roots is to create employment in the local
community,” adds Ferreira.
The Protea Gardens store services a
low- to mid-income customer base, which
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Township storewatch
usually pop by daily to top up on essentials.
The afternoons are the busiest times instore
as people stop by on their way home
from work and school. Weekends also get
busy and Jardim says the store has a “good
value basket”.
Not a franchise group
Roots currently has 34 stores, eight of which
are corporately owned. Ferreira is quick to
point out that Roots is a buying – rather
than a franchise – group and says that the
members are closely involved in the running
of the entire operation.
For example, each month, one store
gets to choose which items will go on
promotion for the next month in the
national campaign. Members pay a fixed
fee (not based on turnover) in order be part
of the national promotions, as well as to
benefit from the low pricing attained. Each
week, a recommended price list is sent out
to the stores that members can adhere to
or tweak, according to their local market
requirements.
Importance of training
Area managers keep a close eye on stores
to make sure that everything – from
product quality, pricing to the overall store
experience – is kept up to standard. “We
Despite rising operating costs and increased
competition, store owner, John Jardim is
confident about the store’s successful recipe of
a convenient and value-for-money offering.
have to police them to ensure that they run
the Roots brand well and don’t destroy their
own business,” says Ferreira. Besides keeping
an eye on the operation, the area managers
are also very involved in the ongoing
training of staff.
Training members to become good
retailers is something close to Ferreira’s
heart as he has been in the retail business
since age 12. “We’re like a school here. We
According to staff members, Jerry Ngoepe and
Thabo More, Mzanzi wors is the most popular
in the Roots range of wors with customers at
the Protea Gardens store.
try and make great retailers because they
are few and far between at the moment!”
“To be a retailer, you have to have passion
– money can’t be the main reason. You
also need to be committed to hard work
– 12 hours a day, seven days a week!” says
Ferreira. Ferreira says that if a member is
found not to be protecting the brand and
running his store efficiently, he will be given
six months to improve things or else he
must leave the group. In the same way, a
member can choose to leave the group after
a six-month notice period. “Performance
is not just based on sales or turnover, it’s
about paying suppliers, producing good
quality products, honesty and customer care
– the most important part of the business,”
he says. In addition, if the member is not
selling between 70-80% of meat and
chicken, Roots management will get the
member to refocus on the what the brand is
based upon. “Our members must be proud
to belong to the group and reflect that in
their stores,” he adds.
Groceries may be a small part of the business, but Roots joined ICC to benefit
from bulk buying, the savings of which are then passed onto customers.
Meat market
The core of the business is meat and poultry
and each stores makes up to 80% of its
sales in the various cuts and by-products of
meat and chicken. “Meat and chicken are
our speciality – it’s what drives our business
and our customers say we offer a range
18 wholesalebusiness Issue 2, 2012

The Protea Gardens store boasts the first bakery in the group. Customers
can now buy better quality bread (700g) and a limited range of
confectionery, which is set to expand in the near future.
A soft serve dispenser located just outside the store provides a cheap and
delicious treat for school goers and working customers returning home
at the end of the day.
that our competitors just cannot match,”
Ferreira says.
The meat is sourced from abattoirs and
fresh chicken is supplied by the leading local
producers. Imports supplement the demand
because “we simply can’t get enough
product in the country,” he says. Two years
ago, Roots opened a cold storage unit in
Krugersdorp to be able to deliver directly to
stores and offer better support through the
supply chain.
Jardim says he chose not to include a
fresh produce section in his store, as it is
not a core part of the business, choosing
to rather dedicate more space to meat and
chicken. Qualified blockmen produce wors
and sausage in-store on a daily basis and
Jardim hints at new products to come into
the market in the next few months. All meat
products – such as boerewors and sausage
– are made in-store as Roots currently
does not have a centralised facility for
this purpose. “The downfall of every store
producing their own versions is that there
is a lack of consistency across the group,”
he admits. Product presentation and strict
hygiene standards are applied throughout
the group.
Creating jobs for the community around each store is important for Roots. Cashiers like Thembi
Maqhashalala are well-trained and made to be responsible for their cash float every shift.
A complete basket
Although meat and chicken is the main part
of the business, every Roots store also has
a limited range of dry groceries for their
customers’ convenience. Ferreira says they
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Township storewatch
sell only known value item (KVI) lines – one
national brand and one cheaper alternative.
“We just don’t have space for more in our
700m 2 stores,” he says.
They have also added value to the store
experience in other ways. Most stores have
an in-store ATM and sell airtime and prepaid
electricity and some members offer pension
payouts. Others, like Protea Gardens, have
also added a soft serve machine.
A big drawcard to the Protea Gardens
store is its bakery (the first in the group),
which was added during a revamp in
October. Jardim says they are now able to
offer better quality bread (700g), which
customers are willing to pay the price for.
“At the moment we are baking a little
confectionery but we will be going full
house in the bakery in the future,” he says.
Challenges
Because of increasing levels of
unemployment in the area – and the
country in general – shrinkage has become
quite a problem in the Protea Gardens
store. “Customers will buy what they need
and take an extra one that they want but
can’t afford,” admits Jardim. To combat this
rising problem, there are CCTV cameras
throughout the store, security guards at the
door and plain-clothes detectives that stroll
through the store.
The increasing cost of electricity weighs
down heavily on Jardim. “In the last
five years, we’ve had a 75% increase in
electricity costs and if this carries on, I’ll
have to retrench people because I can’t put
up the price of goods to our customers,” he
says.
Competition is also tough now that the
big corporate supermarket groups have
moved into the townships.
“Regardless, I’m here for the long-term,”
concludes Jardim.
Exciting time ahead
“We strive for progress every year,” says
Ferreira, looking ahead. There are 10 stores
set to open this year and management
has identified further potential sites in
the Eastern, Western and Northern Capes.
“We’ve been growing 30% year-on-year,
despite the recession,” he says. He says that
Roots members need to ensure that chicken and meat contribute 70-80% of total store turnover.
All meat products – such as boerewors and sausage – are made in-store and product presentation
and strict hygiene standards are applied throughout the group.
they try to keep expansion within the group
as much as possible, giving first preference
to existing members before opening it up
to the public. Roots always rents rather
than buys a new store (located in a rural
shopping centre) and setup costs amount to
R5 million for the member.
Ferreira also hopes to be able to
concentrate more on the other division of
the Roots Group – Roots Fish Chips &
Fast Food. “We currently have one store
in Northam in the North West but up
until now, meat and chicken has actually
swallowed us up,” he laughs. Future plans
also include radio advertising for their
promotions, as well as introducing a loyalty
programme.
“And as we train better and better
retailers, our business does better and
better,” says Ferreira.
20 wholesalebusiness Issue 2, 2012