The Group’s overall objective is to retain and grow its position into Malta’s largest network of grocery stores. The Convenience Shop’s vision is to be the retailer of choice in the local convenience sector by ensuring that a modern, reliable and customer centric experience is provided to shoppers. The following is an overview of the Group’s strategy:
Store network growth
Historically, the Group’s strategy has centred around growth of The Convenience Shop store network via new own operated and new franchise store openings. This has been the driving force of the Group’s operations, which grew from the first store in 2009, to 17 stores by stores by 2015, to the currently operational 83 stores across 48 localities in Malta. Management and the Directors believe that further growth within this strategic angle can be driven on two fronts:
- Identification of a number of key growth locations which currently lack a Convenience Shop presence.
- Identification of densely populated areas which can support further Convenience Shop store openings to optimise the Group’s proximity to its customers.
Own operated stores
In recent years, the Group has been refining its strategy at an operational level. From an own operated store perspective, the Group is now also focusing on the acquisition of existing grocery stores with a specific preference on stores which exceed 400 square meters in floor area. This approach reduces the risk of setting up a new store (which may underperform) and also allows the Group to realise better own store margins due to the economies of scale of operating a larger shop.
Franchise stores
From a franchise store perspective, the Group has also been experiencing an increase in demand from existing grocery store owner/operators who wish to rebrand their store(s) under the Convenience Shop franchise agreement. Such operators are recognising the value added brought about by the Group’s previously described franchisee offering. The Group’s existing robust head office structure means that onboarding new franchise stores requires little to no marginal investment from the Group’s point of view.
Focus on customer experience and increasing chit size
In addition to its store network strategy, which seeks to improve the Group’s proximity to its customers, the Issuer is constantly seeking to improve its product offering and customer experience. In this regard, the Convenience Shop Group is taking the following approach:
- Improving its in-store category management, which makes the shopping experience within its stores a seamless one
- Expanding its in-store product offering to also become a relevant destination for bakery, fruit and vegetables, detergents, personal care and pet-related goods. These have historically been limited or lacking within Convenience Shop branded stores.
- Offering quality and affordable products via the Group’s collaboration with Coop Italian Food – emphasising the importance of quality and affordability given the current inflationary economic backdrop.
Ultimately, the Group’s aim is to shift the Convenience Shop’s customer perception from an impulse purchase due to proximity to a regular shopping list top-up destination. Further to this, management and the Directors believe that by featuring a wider, affordable and high quality product offering, the Convenience Shop may also shift consumer preference away from the traditional supermarket.
By having a wider product offering, the Group is also seeking to improve the average revenue generated per customer visit, with the aim of optimising revenue generation from over 10.5 million annual customer visits to TCS branded stores.