The Aurivo Co-operative Society Limited’s indigenous footprint impacts the entire West and North-West of Ireland, satisfying the diverse needs of a wide-ranging population and fostering a community spirit among employees, customers, and everyone in between. The Hardware Journal touched base with Stephen Blewitt – General Manager of Aurivo’s Agribusiness – to learn more about the co-op’s Homeland store network in particular.
Could you tell our readers a little about your own background and your extensive experience in grocery retail? What key lessons did you learn from that earlier period, that you then brought with you to Aurivo?
I initially completed a business qualification in college and started my career as a Trainee Manager with Quinnsworth, before they were bought-out by Tesco. From Quinnsworth, I then went to work with Supervalu, before moving to the UK for a couple of years to join ALDI, prior to their arrival on the Irish market. I then returned to Ireland with ALDI in 2000, as they were starting to open their stores here. Overall, I spent six years with ALDI before switching to Aurivo (or Connacht Gold, as it was then known). Having worked for such diverse companies with different cultures and customer types, I was able to apply the best customer service, operational and management techniques to my various roles within Aurivo. Also, during my working career I made a point of undertaking constant upskilling and education, gaining third level qualifications in Finance and Agriculture over the past 20 years.
Could you describe your store formats – Homeland Agri, Homeland and Homeland Plus – and how they differ?
We have 33 retail outlets across Southern and Northern Ireland, and an animal feed outlet in Ballaghaderreen, Co. Roscommon. Out of those 33 retail outlets, 21 are Homeland Agri which strives to supply everything a farmer would need, with a limited non-agri offering. These are mostly located in the small towns, villages and communities across the eight counties in which we operate. The ten Homeland stores are located in the larger towns, where the population exceeds 3,000-4,000 inhabitants, with the size of those particular outlets ranging from 3,000 to 10,000 sq. ft. While catering for farming needs, those Homeland stores also carry an extensive range of hardware items, paints, gardening products and pet food. In terms of size, the largest of these Homeland stores is in Ballina. And finally, we have two Homeland Plus stores, located in Deepwater Quay, Sligo, and in Westport. They encompass everything the other stores offer, with homeware and various other products on offer as well. The Homeland Plus store in Deepwater Quay is in fact our largest store overall.
I understand the geographical footprint of your stores has increased over the last few years. Could you give an idea of how your store numbers have developed?
In recent years, we’ve gone through a phase of right-sizing our retail network. In 2012, following the purchase of Donegal Creameries, we actually had 41 retail outlets. What followed was three years of right-sizing our footprint. For example, we found ourselves with certain stores only three or four miles apart, which didn’t make a lot of sense economically. Once that revision took place, we concluded that phase of right-sizing with the overall reduction taking us from 41 stores down to 32 stores. Thankfully, we’ve returned to focusing on our expansion once more. In December 2017, we opened a new store in Belmullet – our 33rd.
How important are the Homeland stores to the overall Aurivo business?
Well, we have two brands within Aurivo Agri Business; Homeland, which is our retail brand, and Nutrias, which is our animal feed brand. So those two brands are a huge element of the overall co-op, with their combined ¤100m turnover accounting for a solid quarter of the co-op’s overall turnover of just over ¤400m. For our 10,000 shareholders too, Homeland and Nutrias play a key role in their businesses and day-to-day lives. Farmers in particular rely heavily on these two elements of the Aurivo co-op, as almost 70% of our turnover and profits comes from farm inputs. The co-op also comprises our four livestock marts and our 1,000 or so dairy producers. These producers and the mart customers are of course Homeland and Nutrias customers too, and it’s this communication between our different Business Units that we’re constantly trying to promote. We feel that our network offers a huge advantage over our competitors, with so many touch points allowing our customers specific advice and flexibility when buying and paying for goods.
What are the main growth objectives for the Homeland stores in the next two to three years? Have you an optimum number of stores you want to achieve by 2020, and what would that be?
While it’s too early to disclose specifics, we developed a strategic plan at the end of 2017, and we will have three more stores open by the end of 2022. In our strategy, we’ve plans to expand both within the eight counties in which we currently operate, along with the greater Leinster region also. When developing our strategy, one of the most alarming trends highlighted by the 2016 census pointed to a population decline in Donegal and Mayo – counties in which a third of our retail outlets are situated. Therefore, for the long-term sustainability of the co-op, we have to ensure that we invest in more populated areas displaying population growth. Early last year we were presented with the opportunity to open a store in Belmullet, Co. Mayo, as the then owners felt it was an opportune time to exit. Since opening in December, it has exceeded all our targets and is experiencing huge growth in the Agri, Hardware and Building categories. It is this kind of expansion we plan to pursue in the coming years, where we can partner with one-off retailers who see the benefit of what the Homeland team have to offer customers in their area. With our plans to expand beyond our current region underway, the door is always open to new ventures with like-minded businesses in regions where we’ve yet to establish ourselves; to work together to improve both those new regions and the overall health of our industry as a whole.
With your parent company Aurivo’s deep roots in the west and the northwest, is this reflected in Homeland’s relationship with customers?
We’ve a team of 240, spread over the Agribusiness, between the mill and the stores, as well as our team on the road. The vast majority of that team would be local men and women, with many of them involved in agriculture themselves. In the rural areas especially, our stores are seen almost as a sort of community centre, where you can come not just to buy your feed or supplies, but also chat with your neighbours. We also maintain a very strong working relationship with the agricultural colleges – namely UCD, Greenmount, and Mountbellew – in terms of offering work experience. Indeed, a lot of our graduates and trainee managers would’ve come through one of those institutions. Our social club is also actively engaged with the local communities, organising charitable events that managed to raise ¤40,000 in 2017 for local charities.
Do you believe there has been a two-tier economic recovery, with rural areas experiencing slower growth than the big towns and cities? What should be done to drive growth in rural areas?
It’s most definitely two-tier, from all the economic data being released. However, what I’ve witnessed since taking over as General Manager 18 months ago is that if you up your game and provide a good service, you will get the turnover growth. In 2017, we experienced growth in every category, and that’s with a declining population. That is mostly down to the fantastic team we have out there, who serve the customer well. It’s also down to the effort we put in to our digital marketing over the past year and-a-half or so.
What I have also seen is that you have to invest in training and developing your team. I am delighted to say that 99% of our promotions are filled from within, and our team see a clear career path for progression. Unfortunately, not all companies in our industry have the ability to develop their people and they suffer when vacancies exist. Your people are the future of your business. It’s easy to sit back and complain that things are better in Dublin – and they are – but there’s no doubt that if you do your best, and if the customers see value, if they feel well treated and respected, and if you have a high-performing team, you will see growth.
Merchants operate in a fast-moving, fast-changing environment. 2017 saw Brexit loom ever larger on the horizon. What do you consider the most significant obstacles in the next two to three years?
The co-op actually established a Brexit committee, with representatives from each of our three business units who meet on a monthly basis to review the current situation. We currently transport milk from the North to the South of Ireland, over the border, and we also have one retail branch in the North – in Omagh. But overall, I think it’s very much a waitand-see situation. To be fair, if Theresa May can’t tell what’s going to happen next, there isn’t much hope of the rest of us successfully predicting the next step. Personally, I fully expect a much more watered-down version of what people originally feared back in June 2016.
What is Homeland’s online retail strategy for the next couple of years? What’s your view on the quality of the broadband network across the west and the northwest?
While we don’t yet have an online retail presence, it is part of our strategy. Selling online is certainly something we’re aiming to do in the very near future. As part of the required research into an e-commerce offering, we actually carried out a survey of our customers, most of whom reported back with good-to very-good broadband. So, I think we’re leaving behind the days of poor broadband. We believe there to be a niche in the market for what we’re looking to do, and the target is to have our e-commerce operational within 24 months.