By Ritchies Stores CEO Fred Harrison.
What a year 2021 has turned out to be. In reality, the priorities within the Ritchies business over the past nine months have been very much Covid-related.
The priorities include protecting the health and safety of our team and customers, managing customers’ expectations with reference to Covid, operating each store as effectively as we can (noting a number of the team were absent at varying times due to Covid-related illness), and, sourcing stock as best we could, noting several supply chain issues.
Amongst all of this, we have still managed to progress a number of projects we have been working on.
Loyalty
We relaunched our Community Benefit Card program in October of last year. We closed down the old and launched the new Ritchies Card. One year on, we are delighted with our progress.
We introduced the Ritchies app. Customers can now select or change their nominated recipient at the spin of the beneficiary list. Plus, the physical card remains as it is still popular with many of our customers. We have more than 150,000 cardholders and we aim to double that number in the next 18- 24 months.
To date, we have donated more than $51.5 million to local clubs, schools and charities.
We are in the process of forwarding unique offers to our customers for commonly purchased products. This includes rewarding our best customers in ways other than price.
Loyalty customers’ baskets are on average 30% higher, compared to our average customer base.
Games and competitions are also available to our customers on the app.
Environment and sustainability
A significant focus of our business over the past few years has been our environmental footprint.
What started off as a cost saving exercise when we saw our annual power cost increase significantly, has now been deeply embedded into the business and is one of our core pillars of focus.
The initial easy win was the retrofit of all our stores across to LED lighting. After completing this rollout, the average total store energy saving ended up at 13%. This prompted us to then look at further opportunities.
Solar panels on store roof tops became the next focus and we now have eight systems up and running, with more on the way.
Rolling this out across the entire network is a challenge, as we have hit some roadblocks from landlords who own the roof spaces and who either refuse outright to install them, or are looking for a component of the savings, making it less viable to roll out. We continue to work with our proactive landlords in this space, as opportunities arise.
Another major project we have been working on with AJ Baker Refrigeration is the fitting of doors onto all meat and dairy cases. Where completed, this will have resulted in a further 20% to 30% savings in power.
As well as adding doors, other energy saving initiatives were rolled out at the same time, such as EC fans into all refrigerated cases, variable speed drives fitted to compressors and condensers, new control systems to manage the operation more economically, recommissioning of plants, and replacement of other components for a more efficient system.
Where we have been built new stores or completed a major refurbishment, we have also installed trans-critical CO2 refrigeration systems. Not only do these save significantly on power consumption, but CO2 is a much more environmentally friendly gas than what is being used in older systems.
Further benefits have come from the integration of the refrigeration system into the HVAC. Traditionally, these two systems have worked against each other in a supermarket. When set up as an integrated system, using cooling and rejected heat from the refrigeration, the two can run extremely economically.
Aside from power mitigation, we have also been focussing on how we can reduce plastic harm to the environment. Some of our initiatives to date are ongoing, some are complying to legislation and above all, the focus from the team on this very important part of the business is growing daily.
This includes progressive rollout of plastic trolleys made from recycled milk bottles, which can be recycled when no longer serviceable; rollout of battery recycle units to the majority of stores; replacement of single use plastic packaging for in-store packaged goods with environmentally friendly alternatives; cardboard recycling; and, a focus on reducing waste sent to landfill.
Our journey is still in its infancy, with much more to be done over the next few years. However, we are well on the way with more projects on the horizon that will take us to the next level.
Online shopping
It’s still early days for Ritchies but we are now working on a launch in the first quarter of 2022. We will be partnering with Myfoodlink who is currently the provider to more than 400-plus other independent retailers across Australia.
We are excited to partner with them to develop some Ritchies specific attributes to cater for our loyalty program. We have a team working to introduce a trial in three stores early in the new year.
Part of our offer will provide traditional ecommerce options; on-demand delivery within one to two hours; a focus on premiumisation, occasions, platters and special events with food, wine and spirits; as well as targeted catalogues and unique offers based on purchase history to enhance the customer experience.
We are fully aware that online will not be a profitable means of trade, particularly in the early years. However, we recognise there are a growing number of customers who would like access to these services, from time to time.
Our clear preference is to grow our bricks and mortar network, both in store numbers and the quality of the customers’ shopping experience.
On this final point, we will see Ritchies continue to invest significantly in DSAs and upgrade our store network. 2022 will be an enormous year for upgrades.
As the calendar year draws towards a close, we can reflect on the challenges all businesses have faced. Supermarkets and liquor store are the “lucky retailers”. Covid generally allowed our sales to increase, with the exception of Melbourne and Sydney CBD stores. Many other businesses have been severely impacted for much of the year, being forced to close, cafes, restaurants and hairdressers to name a few.
Our thoughts are with these operators who have so much ground to make up in the next 12 months. I am sure one of our new year resolutions will be for a more “normal” 2022, where we can enjoy holidays with family and friends and even travel interstate or overseas. Here’s hoping for a more enjoyable and safer road ahead.