Dobbies details growth ambitions

Shopping villages and local buying control to be utilised.

Dobbies: shopping village concessions will be extended by Cleland - image: Dobbies
Dobbies: shopping village concessions will be extended by Cleland - image: Dobbies

Dobbies Garden Centres' new chief executive John Cleland will be driving growth for the chain, recently bought by Midlothian Capital Partners and Hattington Capital from Tesco for £217m, by adding shopping villages and returning some buying control to centres.

Tesco bought the 34-centre chain for £155m in 2007 before selling in June. Latest turnover was £153m, but with most centres built to turnover at least £8m, and only Edinburgh reaching that level, the figures suggest scope for growth. By the end of November, Cleland will deliver a three-year investment plan to the owners. "The plan is we invest back in the core business. We know we bought a valuable estate from Tesco but also recognise there is a bit of catch-up Capex to be done," he said.

On how much money is available to fund development, he added: "We have enough (resources) otherwise we wouldn't have bought it." Three sites - Braehead, Dundee and Liverpool - have "shopping village" pre-agreements to match the Chesterfield centre's model and Dobbies is working on 18 unnamed sites to create something similar.

"All offer benefit to local communities", said Cleland. "We should be able to get good revenues expanding our shopping villages if we get planning on these sites. It will make a big difference to our revenues." Chesterfield has 13 shopping village concessions including Shuropody, Hotter, Pets at Home, Crafter's Companion and a pet-grooming parlour to "offer a destination draw in categories we don't do".

He added: "There's also a plan for expansion into new sites into parts of country where we don't currently trade. There are substantial towns and conurbations we're not represented in." Cleland said he has visited independent garden centres such as Bents, Aylett, Longacres and Scotsdale. Dobbies has done an exit survey at an independent and at its own stores to find differences, gaps in performance and growth opportunities.

"They have been helpful and friendly in allowing me to talk to them and sharing what makes them such a success." On the surveys, Cleland added: "They're all very clear that a national chain is sometimes about compromise. A lot of stand-alone independents are about no compromise, with a focus on one site." He said the "simplicity" of a multiple-site business can "compromise the ability to run a local business".

Cleland, formerly of Maplin, Esporta, Somerfield, B&Q and Asda, said in his last five businesses he surveyed customers to understand what they "think about your brand and your business" and he believes in making time to "understand what your colleagues think and see how close that is to how your customers are and to act on feedback". This follows the Apple idea of "listen, act, then listen some more - a brilliant guiding principle in business growth strategy".

He said the surveys show customers think "the Dobbies brand of old was a destination for difference and differentiated product, and some of that has been lost over recent years". Those surveyed said they had expectations to sell locally and seasonally relevant product "from Shepton Mallet to Inverness", reflecting different horticultural and lifestyle regions, which "plays more to the independent view that compromise destroys multiples if you don't get it right".

Some customers believe service is "a bit Russian roulette - sometimes it's just not there", said Cleland. "They are asking us to put back in place the availability of staff and advice expertise more than anything else." He said the key driver to visit is horticulture/plants and restaurant, which is "not a major surprise because that's where the turnover is. Horticulture is the key driver of customer visits, but restaurant has the highest customer count as it tends to be a secondary mission for all visits."

Cleland is writing an individual plan for each store with a "focus on decentralising some decisions moved into over the last five or six years and giving some control to stores". This includes some ordering of local regionally relevant product and direct relations with local suppliers. For example, the restaurant offer will be more locally tuned to meet local dietary requirements, so Carlisle will introduce Cumberland sausage. "If you have one single menu you also avoid engaging with customers and some of that goes back to local control."

On the internet, he said "there's not been serious engagement in online purchasing" in gardening, quoting an industry-wide figure of nine per cent of transactions being by mail order/internet and many of those by postal catalogue and TV shopping as opposed to pure internet play. The Dobbies website will mainly be a 24-hour shop window for the chain's products, he added, while the issues around successful e-commerce are "less about technology and more about content", with customers expecting interaction and advice, which is an expensive service to give.

Something different

On ranges, Cleland said: "Customers say what we need to change to get that bit of magic back into the offer." That means introducing something different and re-establishing top-end brands in core categories, with better differentiation of "good, better, best" and giving "real reasoning" why products such as an entry-level rake, branded rake and multi-head tool are there.

But there will be "some expanding and putting in some brands we've lost. It's about reversing the move from the 80:20 ratio, taking out the slow-moving in favour of fast-moving." This is to avoid removing the products that make Dobbies recognised as a gardening expert, he explained.

Cleland said there will be more SKUs in live horticulture. He gave the example of landscaping, where Dobbies sells no natural stone products, only reconstituted stone. He was tackling that at Glee with buyer Steve Guy by seeking higher-end ranges. Last Christmas a "value engineered" cheap Christmas tree did not sell because "it was not right for our customers", he said.

Local food is easiest to change, said Cleland, with cheese, pies, beer and butchery going back on the menu, having been lost by Dobbies over the past three or four years. He added that the only people who understand local plant needs are Dobbies' horticulture experts, with 247 staff qualified in horticulture over 34 stores, so they will have more say on local sourcing.

Going back to local will not be a "very high proportion of sales but will be a meaningful proportion". On prices, he added: "Our customers are telling us they are more driven by value for money than prices. A hard discounter can sell bedding plants but they aren't going to get watered any time soon. But they will sell volumes at low margin. We want to provide consistency and quality."

He said quality adds up to better value and "we're not going to put prices up". Cleland cited John Lewis addressing both ends of the market on how to tackle pricing, adding: "It's about being able to do 'good, better, best' at the same time. We see ourselves growing the market. It's not about finding easy long-hanging fruit and not about stealing off each other. That's lazy retailing. I'm clear we want a strong relationship with the industry. It's about growth for us and growth in the industry."

Key stats: Dobbies interviews, surveys and store information
Customer interviews: 7,000
Colleague surveys: 1,000
Stores: 34
Cost: £217m
Turnover (53 weeks to 1 March 2015): £153m
Concession villages planned: 21
Trained horticulture staff: 247

Key themes
Three-year masterplan
Shopping villages
More buying control for individual centres
Acting on customer feedback

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