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Achieve profitability by offering something unique

Published: 28. January 2016

Meet Carl Schartau – the retailer with a good amount of entrepreneurship and resourcefulness, who successfully developed his grocery store to a vibrant business, customised for the specific residents of the area. As a result, he has reduced inventory shrinkage, built a loyal customer base and realised higher returns.

Retail and dining in the same area mean less shrinkage

In Stockholm, in an area called Vasastan, there is a different kind of ICA Supermarket. It is run by Carl Schartau, and besides being an unusually pleasant and accommodating shop, it houses a restaurant in the store, complete with a liquor license.

“I have focused on having a well-stocked deli, catering services, and a restaurant because it gives less inventory shrinkage.” explains Carl. “I can serve a perfectly ripe cheese in my restaurant instead of throwing it away when it nears the expiration date. And, of course, it is very enjoyable to have this combination of supermarket and restaurant.”

Focus on your main segments of customers

Carl’s customers are very trend-sensitive, he says. The neighbourhood he serves is mostly populated by DINKs (double income, no kids) and Carl has shaped his store accordingly.

“They like cooking and care about what ingredients they buy. So I do not only provide goods from ICA. I also sell products from other suppliers, and I often buy small quantities from small suppliers.”

The wide and unusual range of products is particularly noticeable in the deli counter. There, customers can choose among rare meats, fish and cheese. There is also a wide variety of prepared meals. Those meals attract another customer segment – the lunch crowd from the businesses in the area.
Carl’s focus on certain customer segments is a conscious choice that has proven successful and lucrative. For those customers who are price-sensitive, the discount chain Lidl is near, and there are a couple of huge supermarkets that sell non-food items as well.

Find new ways to serve your customers

As part of the ICA retailers, Carl had to push through his idea with a restaurant area with rights to sell alcohol.
“Maybe they saw my idea as crazy, but every area has its audience, and you have to adapt to your environment to succeed. My shop is located in a neighbourhood where people are accustomed to taking an after-work drink before they go shopping for their dinner. Why not benefit from that? Sometimes I see people taking a selfie while they are eating their shrimp sandwich and drinking a glass of champagne. They tag it ‘I am at the grocery store´” he laughs.

Carl recognises that his focus on high-quality food and restaurant service may not be economically feasible outside the big cities. However, he has seen examples of how stores in the country can distinguish themselves from the competition by extending services beyond food. He recalls something he saw at an ICA store outside Stockholm.

“They had fitting rooms next to the mail delivery counter, so the customer could try the clothes on, right away, after they had collected their parcel from online clothing stores. If the clothes didn’t fit, the customer could return them immediately instead of first carrying the parcel home, trying the clothes on, and then walking back to return the parcel by post. Simple and genius!” says Carl.

Be unique and provide something extra

Though Carl’s shop is not large enough to accommodate parcel service with fitting rooms, he offers – besides the catering and restaurant – non-prescription drugs and also a wide range of allergy-friendly foods, without gluten or lactose. Moreover, he and the staff goes to the gym together with some of the regular customers.

“It´s a collaboration with a gym nearby. Health and food go together, so I think it´s obvious that we in ICA should take an active role in that”, says Carl.
“The bottom line is that you have to be unique and provide extra services to survive in the business.”

 

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Five ways for better retail cash flow
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Boost you business with retail cash management