The chilled distribution platform offered by Londis has proved so successful for its retailers that many can’t wait for Phase II…or Phase III for that matter. Checkout reports.
It’s rare enough that new retail initiatives introduced at head office level are so warmly adopted by a symbol group’s members; rarer still for participating retailers to be chomping at the bit for the next phase to come on stream. But that’s the welcome situation Londis finds itself in, following the full rollout of its chilled distribution platform in June. Approximately 90% of retailers have reported widespread satisfaction with the programme, which has delivered price savings of over 6% and increased margins almost across the board. Naturally, delegates at this year’s Londis Conference were eager to learn about Phase II, which commences this month.
Building on the rollout of iSIS last year (and the complimentary iPad for each of its members), Phase I of the new chilled distribution platform marked a step change in how the retailer supplies chilled products; consolidating around 40 different supplier deliveries into one, via a central distribution facility in Swords, Dublin.
Phase II brings a slew of additional brands to the table, including Benecol, Müller, Glenisk and Clonakilty, as well as increasing the availability of Nisa Today’s Heritage chilled private label range, fresh meat and fish products. Around 400 products will be introduced as part of Phase II, bringing the chilled offering at Londis to over 1,200 products.
Londis Ballyheigue, in County Kerry, is one of the most westerly Londis outlets in the country, which, until the advent of the new chilled distribution platform, meant increased out-of-stocks during busy periods, particularly in the dairywall. But as proprietor Brendan Moriarty tells Checkout, not only has the platform provided more control over the ordering process, it has also delivered much-needed consistency. “Being in Ballyheigue, we were traditionally located at the end of most suppliers’ runs, so we would often get what was left in the van; we might get a supply of Tropicana in May, and that would have to do us for the rest of the summer.
“But with the new chilled distribution system, you have a consistent supply coming in on a daily basis, meaning our turnover is also up considerably. There were also a lot of products we didn’t stock before, because we couldn’t get a consistent supply; fresh meat, for example. But the added value that Londis has given us enables us to deliver a far wider product offering.”
Moriarty estimates that in the first 14 weeks, between the rollout of the programme and the Londis Conference, dairy turnover at his store rose 7%, with deli up 6%, while efficiencies were boosted significantly: “Sometimes, you could spend the whole day talking to suppliers and checking dockets. Now, it’s just one supply, it arrives early in the morning, and everything is dealt with in half an hour. It’s much simpler.”
The Next Phase
While there was an element of the unknown about Phase I, which required a certain amount of faith from both retailers and suppliers, its success to date exceeds the expectations set by the group. “When we started Phase I, we pinpointed a few areas that we felt were most important to deliver on for our retailers; increasing their margin, offering more consistent product, upweighted promotional activity and the level of efficiencies that we could deliver,” explains David Moroney, Retail Development Manager, ADM Londis. “For Phase II, we can adopt a more tailored approach about how we launch new suppliers via the platform: we can launch one or two a week, and present our retailers not just with a supplier, but also with a particular spec for a product, point of sale material, and advice on how they can bring that individual supplier forward in their stores.”
The margin potential offered by the programme is something Londis is also keen to reiterate, with Moroney explaining that as more suppliers join up to the programme, the better the potential value offering for the retailer: “You can choose what sausages you want to stock, or which pre-packed meat you want to stock, based on your individual store’s need. This allows retailers more control over what products they are ordering in what categories, and what the potential margin is from these categories.
“This also enables us to create proper planograms for our customers, right down to individual retailer level. You could look at Brendan’s dairy wall, and pull certain data from that, as well as from other sites of a similar size, and seek to deliver an optimised planogram for that location. That was never possible in the past as we couldn’t be assured of supply across the range. We don’t have that problem now.”
Engaging With Staff
Much of the programme’s success has been thanks to the rapid rate at which retailers engaged their staff with the system; during the implementation phase, Londis sought to engage not just with store owners, but also their teams, ensuring that interactivity started from the shop floor. “They’re the ones at the coalface, that can give you the proper feedback on how to bring the whole programme forward,” says Moroney. “That has changed the whole dynamic about how these stores operate now – you don’t walk into a shop now without seeing an iPad somewhere on the shop floor.”
And such is the hunger from Londis retailers for additional suppliers to be added, that Phase III is scheduled to rollout by Q1 2013, by which stage the programme will become a near-continuous process. “We’re all putting pressure on them to quicken things up!” Moriarty laughs. “It’s working so well for us that we can’t wait for the next supplier to come along.”