Is it a health food shop? Is it a confectioner? It’s not easy to sum up exactly what self-proclaimed feel-good food retailer Julian Graves is, but what is sure is that, as it celebrates its 20th birthday, the business has carved itself a niche on the high street.
In September 1987, Nick Shutts and his business partner Nigel Morris took their market-stall business into a store in High Wycombe. Since then, the business has changed dramatically. It now owns tea and coffee retailer Whittard and is itself owned by Baugur, but the focus on nuts, seeds and confectionery remains intact.
It is only since the Baugur deal, however, that the growth of the business has accelerated. Baugur bought an 80 per cent stake in the company for£14.7 million in December 2003, but Shutts says that “anyone would give you£50 million for it now”.
Julian Graves has 325 stores and is seeking to open between 40 and 50 in this financial year, having opened 36 in the previous one. The ultimate aim is to have 600 UK stores, each typically between 1,000 sq ft and 2,000 sq ft (95 sq m and 185 sq m), taking advantage of landlords’ enthusiasm for retailers that add something a little different to their centres. Overseas stores are also on the agenda.
The expansion is coming on the back of strong sales. So far this financial year, like-for-likes are up 11.7 per cent. It is a performance that many retailers would give their eyeteeth for, but Shutts admits that Julian Graves has had a helping hand, because a mature customer base is less sensitive to economic turbulence and higher interest rates. “Our core customers benefit from interest rates going up,” he says. “When you’re old, you eat health food because you have to, not because you want to.”
This positive performance is also aided by the low basket size at Julian Graves, which is£4.30 – although this does mean that the company finds itself competing with other attractions for customers' impulse spending. “When a lottery kiosk opened outside our Eastbourne store, our takings were down 20 per cent.”
Winning formula
Julian Graves is built on a formula of simplicity and adding value to what are, in most cases, very basic raw materials. The commodities to make the products are shipped in from overseas, but the tasks that add value are done at the company’s site in Kingswinford in the West Midlands, which functions as head office, factory and warehouse.
This site is crucial to the profitability of the business. He uses the example of coating raisins in chocolate. As Shutts explains, “I knew what the price of chocolate was and I knew what the price of raisins was, so I didn’t understand why chocolate raisins were costing me so much,” he says. “So I set up my own coating plant.”
While there are big plans to increase Julian Graves' UK store count, Whittard is a different story. Taken private in 2005, it has 135 stores, but Shutts says Whittard's future growth will come from overseas stores and online sales rather than a growing UK store count.
A new managing director, Paddy Prowse, has been hired and further international expansion, as well as growth in the wholesale market, is on the cards. Julian Graves opened its first US store in Boston in February and Shutts is confident that the company will prosper stateside on the back of its English image.
As one of the smaller outposts of the Baugur empire, Shutts says that Julian Graves has benefited from the centralised plug-and-play services that its Icelandic investor is developing for the companies it owns. As well as help with Prowse's appointment, Julian Graves is being supplied with insurance centrally and is working with Baugur’s new e-commerce arm, headed by Figleaves.com founder Michael Ross.
In a market where few retailers are expanding rapidly, Julian Graves has been a quiet success story. And with an ageing population and the growing power of the grey pound, Shutts is looking ahead to the next 20 years with confidence.
FOOD FOCUSED
Born:1955
Interests: Owning and training racehorses
2006-present: Chief executive of Julian Graves and Whittard of Chelsea
1987-2006: Chief executive of Julian Graves
1981-1987: Partner in Food for Thought (original name of Julian Graves)
1980-1981: Meat trade supplier to restaurants
1970-1980: Saturday boy on fish counter at Mac Fisheries, working up to butcher before becoming their youngest-ever store manager at 17 years old.
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