Ritchies Stores is set to make the largest single acquisition in Australian independent history from May, when it formally takes on 12 grocery stores from the Fishers Group.
Ritchies and Fishers are both well-established retail brands, founded in Victoria in 1870 and 1911, respectively. Fishers, which joined the IGA banner in 2001, is led by fourth- generation retailer Alan Fisher, whose decision to take a step back from retail, although not entirely, made the acquisition possible, says Ritchies CEO Fred Harrison.
“Alan and I have been close over the years,” he told Retail World. “We’ve always had a good understanding that when this opportunity arose, he’d talk to us, and that’s basically what happened. The good news is that Alan is the landlord for a number of the sites, so we’re going to continue a strong association with him.”
The acquisition, announced late 2015, will see Ritchies acquire all but three or four stores from the Fishers Group.
In addition to the 12 IGAs and SUPA IGAs, Ritchies will acquire two standalone liquor stores and – a first for Ritchies – five fuel sites.
Mr Harrison is optimistic about Ritchies’ foray into fuel.
“It is a big challenge for us, but Coles and Woolies have been strong in this aspect of their business and Alan has been very successful,” he said. “It’s a good thing when you acquire another business. You obviously bring some of your own skills to it, but you also take the skills from the existing retailer. Who knows – if we find that these fuel sites work well, we might end up having more fuel sites in the future.”
The acquisition of the IGAs and SUPA IGAs will bring Ritchies grocery store numbers to the low 80s. However, it is not yet confirmed how the stores will be branded.
“They’ll all be owned by Ritchies, but the Fishers name is very strong, particularly in the Mildura [Vic] area,” Mr Harrison said.
“We’re certainly doing a lot of due diligence around maintaining the Fishers name in the heartland stores. Or it might be co-branded Ritchies- Fishers. We certainly respect that Fishers, with a 104-year history, is a very powerful brand, so if that’s the right branding for the stores, or we co-brand in the early days, then that makes a lot of sense.”
Mr Harrison is planning a ‘steady as she goes’ approach to the acquired stores and says any changes will be subtle due to the fact that the stores are already well-managed and well-operated.
“Fishers is competitively priced and Ritchies is competitively priced, so I think there’s going to be very little fundamentally changed there,” Mr Harrison said. “Alan’s staff are well-trained and well- disciplined, so that’s a positive.
In many respects, we see this acquisition as being relatively smooth due to the strong performance of his business.”
There will be some ‘Ritchie- isms’ brought to the new stores, such as the Myer one loyalty program and wider ranging.
“We probably carry a bigger range than Fishers, so that’s something that might be introduced over time,” Mr Harrison said.
There will also be upgrades to the stores and Ritchies is in talks with Mr Fisher as to what the priorities are with them, so they can be locked into the group’s program.
“We’re going through a fairly good upgrade period at the moment,” Mr Harrison said. “One of the introductions that we’ve brought into our business is sushi. We now have three sushi outlets up and trading and doing very well. So I would think, as part of the acquisition or part of the refurb, you’ll see some sushi outlets in certain stores in the Fishers group.”
A number of Ritchies stores are currently undergoing Metcash’s Diamond Store Accelerator (DSA) program, with sites at Mount Waverley in Victoria and Ballina in NSW showing particularly stunning results.
“We’re seeing 15-20 per cent growth in both those stores, with the completion of the DSA,” Mr Harrison said.
Ritchies also has two major projects underway that are expected to set the new benchmark for Ritchies. The Boonah site in southern Queensland is growing from 900sqm to 1,900sqm, incorporating sushi and the full suite of fresh food departments.
“We see this as being a great opportunity to grow our market share in Queensland,” Mr Harrison said.
Ritchies SUPA IGA Dromana on the Mornington Peninsula (Vic) is extending to 3,300sqm and is set to challenge the Ritchies Mount Eliza site as the flagship store.
“Mount Eliza is obviously our current premier supermarket and this store is trading exceptionally well, but we believe the new Dromana is going to go a big step beyond Mount Eliza,” Mr Harrison said. “It’s going to be a stunning supermarket and liquor store.”
Works are well underway at both stores, with launches expected in May (Boonah) and July-August (Dromana).
Stores to be acquired by Ritchies
- Fishers IGA Ararat and Liquor
- Fishers IGA Hamilton + Liquor
- Fishers SUPA IGA Irymple
- Fishers SUPA IGA + Liquor Kyabram
- Fishers SUPA IGA Merbein
- Fishers SUPA IGA Mildura
- Fishers SUPA IGA Miners Rest
- Fishers SUPA IGA Red Cliffs
- Fishers SUPA IGA Robinvale
- Fishers SUPA IGA Stawell
- Fishers SUPA IGA + Liquor Tatura
- Fishers SUPA IGA Warracknabeal
- Fishers Fuel Merbein
- Fishers Fuel Mildura
- Fishers Fuel Red Cliffs
- Fishers Fuel Tatura
- Fishers Fuel Warracknabeal
- Castlemaine Cellarbrations
- Mildura Bottle-O