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Focus also looking at smaller store options

Focus will target urban infill areas and the UK's high streets with a new smaller 'convenience' DIY store format.

In a similar move to the launch of supermarket small format high street stores, which now dominate the convenience foods sector, Focus will concentrate its efforts on smaller, outlets. This includes "carving off" and giving up retail space in existing units in order to downsize some of its larger stores.

The move is part of the company's 'Parasite Location Strategy' whereby it aims to open smaller stores, 15-20 minutes from competitor outlets to "cut off" parts of the catchment area.

Speaking exclusively to DIY week, chairman Bill Grimsey said: "we are really excited about the convenience store format, I can't emphasise enough that in order for the Focus business to create value for its stakeholders it has to differentiate, not compete head on."

The first smaller format store is already trading from the company's Congleton site.

Previously measuring 30,000sq ft with a 10,000sq ft garden centre, the store itself has been halved in size - yet still retains every category. The thinking behind the move is simple and the execution enviable. If the company can operate the same categories, generating the same sales, from half the retail space then profit, stockturn and efficiencies all improve accordingly.

The benefits to the landlords are also clear - they can secure another tenant (with a stronger covenant) for the space Focus relinquishes, increasing the overall rental value of the unit. In the case of Congleton an M&S Simply Food will open in the other half of the site by Christmas.

The Congleton store, which didn't close at all during the downsize and refit, reduced SKUs by 28% from 14,300 to 10,400 and has seen stockturn increase 38% to 5.5 sales per square foot rise 57% to £113.

Mr Grimsey said the downsize was relevant to up to three quarters of the Focus store portfolio, but that the Congleton site was only the beginning.

"I think we can go smaller," he told DIY Week. "I think we can take this onto the high street. I'm bullish about this and I think we can change DIY retailing."

Source : DIY Week

08 July 2010
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