Majestic ramps up franchise store model

Majestic is ramping up the semi-franchise store model it launched last year with a new ‘super-partner’ system designed to turn around some of its struggling stores.

The retailer launched the ‘franchise-lite’ store model in August 2017 to boost stores’ autonomy by allowing store managers to manage their own shops, staffing, and discounting and giving them a slice of the profits.

It has since upgraded around 25% of its estate (51 shops) to the new model – albeit short of the 50-60% of branches envisioned by Majestic CEO Rowan Gormley at the launch of the project.

However Majestic Retail md Joshn Lincoln told db the franchise-lite model has had a ‘huge impact’ on the retailer, not just on the 51 stores that have already been upgraded, but across the whole estate.

“The bar has been raised and all stores are wanting that status and autonomy,” he said.

It is now extending that model by parachuting successful store managers or ‘super-partners’ into struggling stores to turn them around and train up a store manager to subsequently take on that store.

“The speed they can turn around the customer experience, the operations and the profitability of that store!” he said. “The more we can do that the better.”

“We’ve got the data and level of personalisation for the customer and the better we are at blending those things, will put us in very good shape in the future.”

Future-proofing

Last week, the specialist wine retailer revealed it was stockpiling booze ahead of Brexit as it plans for “tough times” in the UK, however Lincoln insisted Brexit was “an opportunity rather than a threat”, and the retailer had robust plans in place to deal with any uncertainty.

“We are making sure from a stockpiling point-of-view that we have enough inventory. Any other retailer will be impacted in the same way as we are, but with all the work we’ve done over the last six months, we’re in a position to be agile to whatever the market throws at us as well,” he told db.

However he admitted that the company had absorbed some of the increasing cost of wine.

“To keep sales prices stead, margin percentage has taken a bit of hit, but interestingly customers are spending more per bottle, treating themselves to a better bottle but buying fewer of them, so although the overall spend is largely similar, it is coming from fewer bottles, but of a better quality.”

“We see it an opportunity not a threat – it’s an exciting not a scary time for retail as shopping for the consumer will get better over the next few years,” he insisted.

“Retailers will have to evolve and the purpose of the store will have to evolve, and I think the experience for the consumer will evolve too,“ he told db.

“Those who embrace it the most and do the best job of that will be the ones who will win. And the work we’ve been doing in the last few years will enable us to do that.”

The retailer is also continuing to renovate its estate, putting in shelving and other measures to free up staff to concentrate on selling wine.

Lincoln said it had no plans to open or close a lot of stores and although a few would be closing, this was part of “simple estate management, which is a healthy way to be working.”