DUBBELMAN, Peter - Metcash (June/July 2013) - Convenience and ...

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the indigenous townships, where no white businesses were allowed to operate. We’d build Cash & Carry warehouses just outside the borders. Thousands of small stores relied on their wholesalers for supply at competitive pricing and also looked to their wholesaler manager for assistance in product selection, pricing and even business training. For a young ambitious branch manager, this was an incredible education in trading and customer service; and some wonderful relationships developed. In 1991, we saw the merger of both wholesalers and Metcash South Africa became a very successful public company with interests in over 300 cash and carrys, over 3000 Lucky 7 convenience stores. I was appointed to the position of General Manager in the Southern Division. Scary jump I make no secret that it was a scary job to jump into initially and part of my job was to merge two warring wholesale cultures into a single business, coupled with the management of socio-political changes that came with the abolishment of apartheid. By 1996 we had a young family and had finally settled in Port Elizabeth (on the East Coast), after moving a number of times following my career from branch to branch and area to area. Yet Metcash was looking for international opportunities. It saw David Holdings in Australia as a takeover opportunity and the rest is more or less history. By early 1998, Metcash South Africa had acquired Davids and a small team followed Andrew Reitzer to Sydney. This wasn’t to be an overseas stint. It was nothing less than full-on emigration. So we moved again! Naturalised Aussies I had been to Australia before, visiting my older brother in Perth a couple of times in the pre‐mining boom days, and we liked what we saw. But we found Sydney to be vastly different – a much faster pace with a lot more going on. We loved it. However I learnt very quickly the benefits of traffic minimisation and realised the benefits of not living too far from one’s place of work. We soon got the kids, Jarred and Jenna, into some good local schools and easily settled in as a family. We weren’t going to move again and, fifteen years later, we still live in the same house, as naturalised Aussies – but still supporting the Springboks. The early days at Davids proved to be a real challenge. It was a broken company, yet had enormous potential, and I was appointed as CEO of Campbells Cash & Carry. There were heaps of challenges and heaps of opportunities. ADVICE FOR INDEPENDENT RETAILERS • You can’t survive or prosper without leverage. Whether it’s a banner group, a franchise or a buying group – being part of a group can give you that leverage. • Reinvest in your business – exploit the value of your location. • The Majors cannot compete with you on service – ensure you capitalize on it. ADVICE FOR SUPPLIERS • Be mindful of your investment with the bigger players and keep the scales balanced. • Stay in touch with all of your markets. There is collective value in smaller markets. • Continue to innovate with a constant flow of new products, especially in the area of pre-prepared foods. June / July 2013 | C&I | www.c-store.com.au 7
Face Time We had to build relationships with suppliers and customers and get a return for our shareholders. I was fortunate to have a great team who supported me, we worked hard and the results eventually came home. I obviously didn’t have enough stress in my life rebuilding Campbells at the time, so I embarked on studying once again and completed my MBA at the University of Melbourne in 2004. Restructures and growth Back at Metcash, what followed were a series of restructures, particularly in the Cash & Carry area. Cash and Carry, while still relevant in high density Capital cities, is a mature business model and with the demise of small corner While consolidation is experienced in the route market, conversely growth in the organised convenience sector continues... stores in the route market, consolidation of warehouses in regional Australia became a major strategy. This process is now complete and the remaining 18 outlets are trading well. While consolidation is experienced in the route market, conversely growth in the organised convenience sector continues. Metcash’s significant investment in picking and warehouse technologies has seen the C Store Distribution business expand nationally and the opportunity to supply a wide range of merchandise including Fresh, Automotive and Everyday consumer goods remains our competitive advantage over other distributors. And recently a new supply contract with 7 Eleven was also secured. Of course there are currently significant challenges: The two supermarket giants continue to be a threat. Not only are they actively engaged in taking a larger slice of the convenience consumer, they are also de facto wholesalers, particularly for impulse market products. There is a good deal of talk about gloom and doom in the independent small store area. In fact, in the USA you hardly see corner stores anymore. But you do see innovation in small format stores that provide an excellent offer around fresh food, particularly in Canada and the UK. The closure of a number of inefficient corner stores in Australia is probably inevitable; but it is not something that can’t be at least partially avoided. In my view it’s imperative to have the smaller independent retailers align themselves with a credible banner. They do that to get better terms of trade and promotional programs, married to a supply chain infrastructure that gives them electronic data interchange (EDI) and access to a large range. This gives smaller retailers a better chance to engage with their customers through competitive pricing and promotional offers. Also where small retailers invest back into their businesses, the results are compelling. Internal evidence indicates that refurbishment programs can deliver a 30‐40% increase in sales. Organised retailers refurbish every 5-7 years. Unfortunately independent corner stores do not. Opportunities to be realised Convenience retailing should be more than an offering of soft drink, chips and chocolate bars. Although we have seen evidence of foodservice growth and coffee, we sadly lack innovation in fresh and convenient foods. This opportunity has been identified and will eventually be realised in our market. The last eighteen months have been a very busy time at Metcash F&G. At home, the kids are grown up. Jarred completed his commerce degree and is doing very well at Aldi. Jenna has recently graduated and is actively involved in fashion and modeling. Outside of work, I do a fair bit of mountain biking in the bush as well keeping a small trailer boat for fishing and skiing. I also love to jump onto my motor bike every now and again and feel the wind in the place where my hair used to be. Despite the challenges, it’s still a great industry to be involved in with many opportunities that lie ahead.
Page 1: Face Time Many opportunities lie ah

DUBBELMAN, Peter - Metcash (June/July 2013) - Convenience and ...

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