Conviviality, the parent company of drinks wholesaler Matthew Clark, as well as retailers Bargain Booze, Select Convenience, Central Convenience Stores (formerly owned and serviced by Palmer & Harvey) and Wine Rack, has reported a 10% increase in retail sales for the 26 weeks to 29 October 2017 after opening 22 new stores.
Overall, the group reported a 9.2% increase in revenue to £836.3m for the first half of the year, while its adjusted pre-tax profit fell 1.6% to £12.3m in the six month period.
Diana Hunter, chief executive of Conviviality, said: “The convenience market is experiencing significant consolidation with both Tesco and Booker and Nisa and the Co-op announcing mergers. The board sees these changes as positives for Conviviality Retail, which continues to hold a differentiated position in the convenience market through being off-licence led convenience retail.
“For the half year, total sales were up 10.0% on the corresponding prior period reflecting the quality and number of new stores brought into the group. In line with our strategy of increasing our multi-site franchisees, 16 existing franchisees opened 45 more stores in the first half, some of which were acquired from existing franchisees, and in total there are 30 franchisees actively seeking to grow with the business.
“Attracting new quality franchisees remains key to our plan with 15 new franchisees joining us in the period. Franchisee margin for the period improved 0.8% points and we were delighted to award 220 franchisees 1,214,650 shares under our Franchisee Inventive Plan.”
Conviviality said it recently opened a trial standalone Vape store in Stretford, Manchester, and 418 stores now have the full Vape range in store to complement its off-licence and convenience proposition.
Hunter said the company continues to develop marketing strategies to win in the local community, including leveraging its strength in social media. A new digital club, which already has 50,000 members, has been launched to enable consumers to access personalised offers and promotions.
Conviviality Retail successfully acquired the Central Convenience business in December 2017, adding 127 convenience stores located in the South and South West, bringing total store numbers as at 2 January 2018 to 831.
The stores will move to being fully supplied by Conviviality by the end of February 2018 and during the next 18 months the stores will be converted predominantly to Select Convenience stores and will move from being company-owned to fully franchised.
Hunter added: “We already have 10 existing franchisees who have stated an interest in operating some of these stores. We expect to achieve buying synergies of approximately £0.2m and cost synergies of approximately £0.8m in the first full year of ownership.”