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MAR SERVICES P22
HOUSING SOLUTIONS P32
HOLLAND AND BARRETT P48
ISSUE 409
PROPERTYAND DEVELOPMENT THE MAGAZINE FOR THE PROPERTY INDUSTRY
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48 PROPERTY AND DEVELOPMENT Retail: Holland & Barrett
THE
GOOD LIFE With 711 stores across the UK and Ireland Holland & Barrett is Europe’s leading retailer of vitamins, minerals and herbal supplements
❱
Successful retailing is generally dependent on listening to customers and acting on what they say. That, together with a change in the market, led to Holland & Barrett embarking on a store refit programme that started with one trial location and gathered pace due to positive feedback on customer experience. The company is Europe’s leading retailer of vitamins, minerals and herbal supplements, with 711 stores across the UK and Ireland, international franchises in other countries and three other brands across Europe as part of the same group (trading as GNC, De Tuinen and Essenza). The size of the estate means a massive refit programme that, as Director of Property Gurdial Flora explains, is being undertaken through a phased approach: “It’s going to take a while to hit all the stores so we’re prioritising based on the time since the last refit, the store’s turnover and ranking. We’re also looking at when the current lease expires and whether we want to relocate or renew. It’s part of an overall strategy that covers asset management, refits, relocations, concepts, whether we want to downsize or upsize. Everything’s being looked at and we have a plan we’re managing.” FRESH IMAGE The aim is to give all stores a fresh image although a standard template isn’t being rigorously applied to each one. The general approach has been to change from a light beech finish to a dark Cordoba Olive
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51 PROPERTY AND DEVELOPMENT Retail: Holland & Barrett
laminate for a modern feel. Within that are three basic styles, which have been refined since the project started — standard Cordoba finish, standard plus goal posts that have zoning for particular product categories and concept stores that apply to only the biggest sites and have exclusive product lines such as jelly bean units, beauty stands, cereal and oil dispensers, and pick and mix counters. Although all stores potentially have variations, they are based on standard designs adjusted to individual sites. “It’s based on the store size and the area’s demographics,” recounts Head of Facilities Management Alison McHugh. “We’ll liaise with the retail, merchandising and trading teams to see if there are any special concepts they want in the store. We then use the in-house design team to design and deliver accordingly.” Since our stores aren’t especially big when compared to other national retailers outlets, each refit doesn’t have to be individually tendered. Instead, as Alison points out, contractors deliver several stores a year on a turnkey basis: “The shop-fit contracts are tendered yearly to produce a list of four approved contractors to work on our stores. Because we have a fixed fit-out style and the concepts are fairly standard, it’s a process that happens once a year and approved contractors are allocated a certain number of stores.” The same principle applies to the fitting out of new stores, with Holland & Barrett having an aggressive acquisition programme aiming to add some thirty stores a year, some being relocations, with a big focus on Greater London and large cities. The emphasis is on stores that can accommodate the concept format due to feedback showing these improve customer experience and increase sales. Although there’s no preference between shopping centres and high streets, they have to be prime sites. “We’re very cautious about where we site new stores, especially with the potential demise of the high street,” remarks Gurdial. “We’re being very particular and looking at demographics, with a requirements list that’s extensive and focused, going out to agents who introduce potential units. Our Acquisitions Manager reviews these and presents the ones that are of interest at the weekly property meeting
The shop-fit contracts are tendered yearly to produce a list of four approved contractors to work on our stores
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with the CEO. The opportunities that are of interest are then assessed by area sales managers and regional sales managers and then each goes through a viability assessment, based on our company acquisitions strategy, that includes return on investment calculations and the minimum contribution we require from the store. If it’s viable, a deal will be negotiated and we process it.” SITE ASSESSMENT There’s a regular strategy review of potential sites because a particular area or location can alter and so the requirements list changes constantly. As Alison recounts, results from the new store programme and customer feedback surveys change the company’s perception of possible sites: “We’ve gained valuable information from certain new store openings about the store layouts, size of stores, local and catchment demographics.” That’s part of the ongoing feedback that’s used to determine the retail estate strategy and is based on exit surveys and interviews, questionnaires, store performance statistics and the company’s Rewards for Life loyalty card. This provides a lot of customer insight in terms of who the customer is, what the average transaction value is and where customers are travelling from as well as a number of other things. That enables more mapping, analyses and understanding of the customer base.
There’s a bespoke property management system that holds all data relative to the property estate and provides vital information for the various functions within the Property Department. But, as Gurdial emphasises, the various sections don’t operate in isolation: “We’re a very tightly knit department where everybody links with everyone else. Our macro property strategy feeds into the various parts of the department at micro level where everybody is talking the same language with the aid of the bespoke central property system that links into the estates management, the maintenance helpdesk, the project managers and acquisitions as well as the legal team and regulatory services. It’s a central master tool that enhances communication, improves transparency, improves efficiency and overall ensures everybody is talking the same language and actioning towards the overall property strategy.” The central property system also helps with the sourcing of contractors for reactive and preventive maintenance, with a preference for local suppliers where possible since this helps the local economy and is generally more cost-effective. However, specialist companies are
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55 PROPERTY AND DEVELOPMENT Retail: Holland & Barrett used for particular types of equipment and there’s a team of national builders and shop fitters that provide a benchmark against local firms. All the work, as Gurdial recounts, is strictly controlled: “We have a programme each year that’s based on actual spend and a forecast of major expenditure based on the number of stores we want to open. The capital expenditure budget is based on that and maintenance is based on the amount being spent now plus a percentage for inflation.” The budget includes environmental work, which covers a current trial of LED lights to assess the potential return on investment. That’s been complicated by a need for wall wash lighting that highlights the products but with no LED lighting equivalent available. A solution is being developed because the correct lighting is crucial to create the best shopping experience. Another environmental development is smart metering, which has so far been installed in 470 stores and is intended to be rolled out further. That’s shown improvement in some stores but not in others where equipment is being left on when not needed and the aim is to change that behaviour. “We have our Plan It Green policy where the plan is to reduce consumption and make the business greener,” confirms Alison. “It makes people aware of energy consumption in stores. There are hints and tips such as switching off air conditioning, only boiling half kettles, making sure heaters and lights are switched off, that sort of thing. We’re also trialling PIR switches in the back of house areas to see the outcome.” As part of the Plan It Green policy, the company is to adopt 100% sustainable power throughout its UK store
“We have our Plan It Green policy where the plan is to reduce consumption and make the business greener,”
estate. That’s being provided by Haven Power in the form of electricity generated from biomass, a form of stored solar energy from plant-based materials such as woodchip. That will significantly lower the company’s carbon footprint and continues its ethical approach that has included banning single use plastic bags and removing certain chemicals for toiletry products. BRAND IDENTITY The main plan now is to complete the store refit programme and develop and implement more concept stores. Allied to the UK programme are the new store fit-outs and the need to maintain standards in the overseas franchised store. Gurdial says: “We’re expanding globally and there’s going to be massive growth over the coming years. For the global franchising, whilst they have got their own business structure, any new shop designs have to be approved here in the UK to ensure consistency and the brand image is maintained. We take into account each country has a different style but we need to ensure that the rollout within those countries is consistent and the brand identity is maintained.”
Registered office: Samuel Ryder House Barling Way, Nuneaton, Warwickshire CV10 7RH www.hollandandbarrett.com Tel: 02476 215540