Planning for success
The last year presented much cause for celebration at Maxol but CEO, Brian Donaldson urges careful strategising is needed to negotiate the challenges that lie ahead.
Describing 2018 as a “mosaic of highlights”, chief executive, Brian Donaldson, tells Neighbourhood Retailer that he would be pleased if Maxol, Ireland’s leading family-owned forecourt and convenience retailer has a similarly successful 12 months in 2019.
Two years ago, Maxol set out a detailed strategic plan to drive the business forward before its centenary year in 2020. Evidence that the initial stages of the strategy are being well received by the wider trade came in the form of continued recognition over the course of 2018. In the last year, Maxol took home a host of industry awards from across Ireland and the UK, including Training Initiative of the Year at Ireland’s Forecourt & Convenience Retailer Awards, along with its dealers coming top in four categories at the 2018 Neighbourhood Retailer Awards, and winning the highly coveted Neighbourhood Retailer of the Year accolade. It also received UK Forecourt of the Year for A26 Tannaghmore in Northern Ireland.
It’s no secret that the Irish forecourt and convenience market has been trailblazing on a global platform for a number of years, but it was especially gratifying for Maxol to see its Ballycoolin Services showcased on stage last year at the NACS conference in Las Vegas.
“It’s been a year of outstanding recognition for the work we have been doing.” says Brian. “We’ve been acknowledged for our company-owned investment, and also our independent dealers, who we work hand in glove with. When you are being hailed as leaders in the marketplace by your industry that signals you are moving in the right direction.”
A key feature of Maxol’s three-year plan is to reposition its offering in the Republic of Ireland with added emphasis given to food service and convenience – including the development and execution of Maxol’s own deli, Maxol Deli.
Last April, two new concept stores were unveiled at Maxol’s bi-annual conference in the K Club. The pilot stores were then subject to vigorous feedback from retailers and shoppers to ensure the quality of the offer and new look and feel concept aligned with Maxol’s high brand standards and by December the finished design had been rolled out across 19 of the network’s store portfolio.
For now, Maxol plans to restrict its new offering to sites in Ireland.
“In RoI, the market is much more food service driven as customers want to eat now or on-the-go,” explains Brian. “In Northern Ireland there is a preference for bigger store formats offering a much more ambient and fresh and chilled range of goods for take home.
“We believe people shop local, little, and often. These are the three key things we see in the all-Ireland market – it’s just that the participations across each category differs according to region. Rather than having a one size fits all model, we tailor our offering to the individual needs of each catchment area.”
Maxol continue to invest heavily across its store estate to improve the offer and experience. In 2018 Maxol launched its new premium coffee brand ROSA into the Irish market, prompting strong growth in the category. By providing the correct waste disposal bins for its compostable takeaway coffee cups and lids, Brian believes Maxol stands out from the competition for its sustainable efforts.
“We’re not jumping on the media bandwagon with recycling,” he says. “The way we see it, if you are in the coffee business you need to be doing it anyway. Very few of our competitors are completing the recycling cycle, and there’s no point talking about compostable cups if you aren’t providing a suitably designed collection bin for your customers to recycle waste.”
As Maxol’s new coffee brand thrives, it continues to look at food service partners that can help create an enhanced offer for its customers. In November, the business added Zambrero to its list of food-to-go franchises joining Abrakebabra, Freshly Chopped, Ground, Insomnia, O’Brien’s and Subway.
2019 promises to be another year of heavy investment for the company with 13 large scale and eight medium scale developments planned for the group, along with 47 shop conversions to the new concept.
“Some of our larger developments run to millions of pounds/euros per project,” he says. “It’s a massive capital investment from Maxol but that’s where the market is and that’s what today’s customer require to secure their custom. We’re aiming to create a network of destination sites that really are the hub of the community, operated by independent retailers under our licensee model.”
As a family-owned fourth generation business, Maxol’s brand is highly trusted, not only by its retailers but by the increasing number of people entering its forecourts and stores every day. While its growing network must be doing something right, Brian believes there is always more to achieve. In 2019 Maxol will be concentrating on improving transaction speed and ensuring slicker, frictionless experiences for their customers.
The use of technology is a key aspect of the group’s strategy and later in the year Brian will travel to Shanghai to gather inspiration on how the latest digital innovations can be used to create a greater retail experience and build a loyal community of customers.
However, the sign of a good company is one that recognises when to listen to its customers.
“Last year we used a technology that allowed our shoppers to rate their experience at the tills when paying. However, it became clear that the constant rating became quite repetitive for our customers because they are visiting our stores so regularly. It’s important to take leadership in business and change tactics, if necessary,” says Brian.
And the ability to adapt is imperative with Brexit fast approaching. As a No-Deal outcome looks more likely with every passing day, Brian reflects on the added costs that a hard border and customs rules will bring.
“We expect to see anything from 3-35 percent increase in costs in certain goods for a convenience and food service business like ours. Businesses can’t absorb these types of costs, so they will have to be borne by the customer resulting in inflation.”
“The reality is coming home now. I think it’s important to closely monitor and have a team in place looking at Brexit. Our view is that no matter what happens with Brexit it has not been helpful for business and is likely to add considerable administration, more complexity and cost.”
Waning consumer confidence as a result of Brexit, Brian believes, has been one of the main reasons the high street experienced disappointing results in December of 2018. However, challenges have presented themselves in a plethora of ways this year. From a lack of government at Stormont and rising costs from wages, utilities, security and insurance – continuing to seek out operating efficiencies and growth is the only way to survive in the cut-throat world of retail.
“We have ambitious plans for 2019,” Brian reveals. “As a business we are continuing to strive for growth in the form of acquiring more sites and looking at new ways of improving our retail offer along with exploring new opportunities outside of our traditional trading sectors.
“Over the last five years we have been rebuilding our management team with new skills and we have new people joining us this year to help us continue to achieve our vision. We want to be the customers’ first choice and we want shoppers to drive past our competitors to come to us. We see 2019 as a very challenging year, but if we meet those challenges it will be a year full of opportunity.”