Closing loss-making Post Office counters in Spar shops has been welcomed by store managers, the company’s boss said.
In June Spar Scotland announced the decision to close 31 of its 48 in-store Post Office counters.
Six of the closures are in Fife, two in Perthshire, one in Dundee and five in Aberdeen. Many have already closed and all will shut by mid-November.
The move has led to community anger and the convenience store chain accused of putting “greed before need”.
Spar boss on Post Office decision
But Spar Scotland chief executive Colin McLean said it was essential to help ensure the stores continue to operate.
He said the strategy of closing the loss-making Post Office counters and expanding the company’s food to go offering was backed by shop managers.
Speaking at the company’s annual tradeshow, Mr McLean said: “A higher margin food to go offer typically replaces a loss-making Subway or Post Office counter.
“Many of our store managers said our recent decision to remove the Post Office from most of our store estate was the best decision management has taken in years.
“Yes, we’ve had to manage our way carefully through the Post Office feedback.
“But we are trying to… focus on running stores profitably for our customers.”
‘Perfect storm’ of tough conditions
Mr McLean, who is also chief executive of Dundee-based Spar wholesaler CJ Lang, said the last three months had seen a “perfect storm” of tough conditions.
He listed the issues as supply chain problems, driver shortages, Brexit and the ‘pingdemic‘.
He said the last three months had been more stressful than the previous 15 of the pandemic.
“Collectively we have done and continue to do a terrific job overall at managing a very tricky situation,” he said.
“In some instances we are having to send our own trucks to suppliers south of the border to protect availability.
“We have managed to protect the depot and our delivery operation from falling over – just.
“We’ve hit the headlines trying to attract and retain our drivers.
“Let’s be clear, we don’t have a business without drivers.
“We are keen to ensure we have enough drivers to support our future ambitious plans.”
He said conditions will “remain challenging” towards Christmas.
Investment in Spar stores
CJ Lang, which is owns more than 100 Spar shops, will show a rise in sales and profits for 2020/21.
Mr McLean said Covid had given the convenience sector a sales boost as more people shop local.
It follows a successful turnaround programme started by new management in 2018.
But the company boss said margins in the convenience store market are “wafer thin”.
He said: “£1 in sales this business only makes around 1p profit. That’s convenience retail. We have to work very hard.”
Spar also announced plans for its largest ever investment programme to upgrade its shop estate.
The investment will go towards new energy saving refrigeration and store refits.
