2021 marks 21 years since Barry Group took over the Costcutter franchise for Ireland. MD Jim Barry talks us through the Group’s birthday
celebrations, discusses the continuing impact of Covid and Brexit on the market and why the company’s family ethos gives it a unique
advantage.
THIS year sees Mallow-headquartered Barry Group celebrating 21 years of operating the Costcutter franchise in Ireland - prior to 2000 it was operated by Vantage Wholesale - and MD Jim Barry is delighted that the company got to mark the milestone.
“We intended on celebrating 20 years of Costcutter in 2020 but then during Covid that wasn’t possible or appropriate,” he admits. “But I think one of the skills we learned in 2020 was the art of improvisation, so we felt it was an important milestone and one that should be celebrated.”
2020 saw Barry Group purchasing the Costcutter franchise outright for the Republic of Ireland, as Jim explains: “We now have total control over the brand here and we don’t have to consult with brand owners about the direction we want to take. Strategically and tactically, we believe it is better to have full ownership. The Irish and UK markets are different and I feel that the Irish market is advanced, so to bring the brand to the next level is now fully in our power.”
Costcutter’s 21 years with Barry Group was marked with a number of events, including heavyweight promotions, in-store theatre and more local events and promotions. “We had to be mindful that we are still in Covid times, but I think we got the balance right,” Jim reveals.
For Costcutter retailers, life doesn’t change, as they still deal with the same people in Barry Group as they have done for the last 21 years, along with the Group’s other two retail franchises: Quik Pick, which they launched in 1996, and primarily attracts smaller convenience stores, and the Carry Out off licence group.
“We are strong believers in franchise business and our focus on the next couple of years is to build those brands and those offerings,” Jim notes.
Through their wholesale business, Barry Group also service a number of independent retailers around the country, with 12 full-time sales reps on the road.
“We come from a trading background where value is always important to us and that has served us well,” Jim stresses. “Our independent business is going from strength to strength.”
A family ethos
Barry Group have always celebrated the fact that theirs is a family business, with the third generation of the Barry family now involved in the running of the company in the shape of two of Jim’s daughters: Holly (Brand Strategist) and Amy (Organisational Development Specialist). Jim believes that this family ethos gives them a distinct advantage when it comes to understanding the operations and needs of the retailers they supply, most of whom are family concerns too.
“I think it gives us a major advantage,” he stresses. “Large companies think differently; they have to. They are wired differently because of their sheer scale and size and because of that size they tend to be rigid. Being a medium-sized business means we are very flexible and the fact that we are a family business means that we really understand the dynamics of what goes in in a family business. Stuff is discussed at the kitchen
table at home, and we understand all that.”
He believes that the company’s size is a key selling point, as customers can discuss their plans with Jim and the rest of the senior management team: “We can meet customers on a personal level, get a proper understanding of their business, and share our vision.”
The MD insists that while they have ambitious growth plans, Barry Group are very conscious of what their strengths are and don’t want to lose them by growing too fast, too quickly: “We are conscious that we are a medium-sized business and we want to keep to the scale where we remain a medium-sized business; that might sound funny but I wouldn’t want to get beyond a €500m turnover because we might lose part of our magic if we did. We would still be optimistic about opportunity for the coming years but we are very clear that we don’t want to lose the family touch.
“I have two daughters now working in the business, taking greater roles within the business, and we have a number of long-term managers within the business who we see as family as well, because they are with us so long. I believe it is unique to have a have a decent-sized company within the Irish market with that authentic, honest family approach.”
Dealing with personal loss
On a personal level, 2021 has been marked with sadness for Jim and the Barry family, as he lost both his parents within the space of a few months, the founder of Barry Group, James A. Barry and his wife Pauline, both instrumental in Barry Group’s success.
“My mother played a major role in the early days of the business; she was doing the books, and also doing a lot of the buying,” Jim recalls. “When the family appeared and our numbers rose – there were seven of us – she focused on the family but she had an incredible brain for business; she was a very astute lady and someone you could always go to for advice.
“My Dad was 92 when he died, but we were able to bring him to work every day up until Covid hit; he would come in for an hour or two, and he loved meeting people. He probably wasn’t at his best in recent years but he still enjoyed coming to work. A lot of the values he started the business with are still part of Barry Group today. A lot of his personality still shines through the business and a lot of my standards and values come from him.”
His father’s legacy lives on in the company he founded, particularly the desire never to rest on his laurels and always seek out better ways of doing things: “We are always trying to challenge ourselves to do things better, to evolve as a company,” Jim stresses. “We know how difficult things have been over the last year and a half but because of how tight we are as a management team, a family business and as a company, we feel that we managed the last 18 months better than anyone else by a long shot.”
The impact of Covid
There is no sector in the country, no business and no individual that hasn’t been affected by Covid. Firstly, the MD stresses that Barry Group feel lucky that as an essential service, the food and drink sector remained open, but staying open was not without enormous stress and pressure:
“At the start, in particular, there was panic buying, there were volume requirements that couldn’t be met by suppliers. Because of restrictions in work practices and availability of staff there were limitations in the capacity that you could operate to. Effectively, it became impossible to operate to normal standards.”
Barry Group have always prided themselves on the quality and efficiency of their supply chain. “Our trucks arrive where they are meant to be when they are meant to be,” Jim says. “That was taken for granted pre-Covid and we probably spoiled our customers with our consistency, but it hasn’t been possible over the last 18 months to meet the standards that we set ourselves before.”
He believes that Barry Group were “far less impacted than our competitors” and maintained 90% efficiency in their service levels.
“While that fell below our high standards, we were still very good relative to the rest of the market,” he stresses. “But we had customers whose stores were being cleared out and they wanted delivery a day early rather than a few hours late, so that created a really high pressure environment.
“As a management team, we had to absorb most of that pressure and protect our team from it,” he continues. “We had team members working way beyond normal standards to get orders out. We normally have a very busy week before Christmas; in 2020, we had about 15 of those weeks in a row.”
In the worst days of the pandemic, the company took the decision to break the warehouse team into two shifts, one from 5am to lunchtime, and one from 2pm to 10pm:
“That was the right decision from a safety perspective but the downside to it was that we couldn’t offer overtime, so it effectively limited our capacity. Normally, when we get busy, overtime kicks in and we can handle a 20-25% increase in orders, but that wasn’t possible so our people worked harder to get the orders picked.”
Jim himself regularly worked a “double shift” to make sure the staff saw him involved in the day-to-day operations: “I think leaders sometimes need to dig in and be there, to keep morale up, to show the rest of the team that they are doing a good job.”
Indeed, the fact that the MD was so hands-on during the worst days of the pandemic gave him an insight into the company’s operations that he might not normally have had, and some of their processes have been improved as a result.
“I’m very proud of our team, how they stood up and got through it,” he says. “You learn an awful lot about people and while we were always a good team, we have come out the other side a tighter team with a better understanding of ourselves and our colleagues. But it was a very high pressure environment and one I wouldn’t like to put my team or myself through again.”
Like every other symbol group, the impact of Covid on store performance depended very much on location. Forecourt stores and those in city centre locations were heavily impacted by lack of footfall, while more traditional food-stores did very well, with so many consumers working from home, while
the off licence sector also enjoyed a busy year. From a wholesale point of view, bulk orders, which normally represent 25% of their business, stopped completely.
The continuing fallout from Brexit
The MD, however, described the impact of Brexit on their business as “a bigger worry than Covid long-term”. A number of their suppliers operate from UK warehouses and are being impacted as the flow of stock slows down, while the MD believes that service levels have disimproved due to Brexit.
“When you add in scarcity of commodities and subsequent price increase, it is almost a perfect storm,” Jim states. “There is a supply chain problem in the trade in terms of availability of stock and the ability to deliver in an efficient manner to retailers.”
The Barry Group MD argues that some retailers and suppliers are being hit with tariffs due to a “second movement of stock”, whereby goods produced in an EU country are imported into the UK, which has traditionally been a distribution hub for Ireland, and are then liable for increased costs and tariffs. He also believes that there isn’t a level playing field between the Republic of Ireland and Northern Ireland when it comes to certain products and regulations.
“There are goods that we would normally import through Dublin that we can’t bring in, but wholesalers can bring in through the North because the ground rules are not being imposed in Northern Ireland the same way they are here,” he states. “That won’t last forever and we think it will work in favour of the Republic’s wholesalers going forward when there is a level playing pitch.”
Barry Group had invested a lot of time and money in streamlining their processes, trying to make their business more efficient, but “Brexit has worked against all of those instincts, adding costs that will eventually be borne by the consumer. Companies like ourselves and retailers are working to very tight margins and I don’t think it will be possible for us to absorb these price increases brought about by Brexit and the harsh reality is that they will have to be passed on to consumers.”
Labour concerns
The retail and wholesale trade has had to absorb a number of price hikes in recent years, with the high cost of doing business in Ireland a real concern. For service industries like wholesale and retail, which are labour-intensive, the cost and availability of labour is a real issue: “For retailers, attracting staff is difficult, especially when it comes to deli and other specialist staff. There is upward pressure on pay, which is a huge challenge.”
Labour supply in general is a big concern for the trade, Jim notes: “In a weird way, we are lucky we are located in Mallow because we are able to get a complement of staff for our warehouse and we are able to get truck drivers, whereas we know that is a much bigger challenge in Dublin. Our understanding is that a number of our larger competitors are struggling to get enough warehouse staff and enough truck drivers. We believe supply chain is going to be a serious competitive advantage for ourselves going forward; we are growing our
capacity and are able to do so, while our competitors are struggling to maintain things to a normal standard.”
Jim believes that while Government supports were hugely welcome to keep businesses and families afloat during the height of the pandemic, it is time to refine the system to ensure that people are back in work, citing in particular the example of the hospitality sector, where there are a huge number of vacancies.
“If a sector isn’t opening up, they are fully deserving of help. But unless there is a sector that is not back to work, I feel it doesn’t make sense to paying supports to people where there is a job but they are choosing not to take it,” he argues.
Planning for the future
So what’s coming down the tracks for Barry Group? While they continued to roll-out their new Costcutter spec during the pandemic, a number of planned revamps had to be put on the back-burner due to lockdowns over the last year, so the next few months will be very busy on that front.
“We have a number of revamps planned, while we have also had a number of enquiries about joining the group and we expect a number of new Costcutter signings in the next few months,” Jim reveals. “I think Covid put people under pressure and knocked their confidence, particularly in terms of their deli and sit-down areas, which were closed during the pandemic, but I can see retailers’ confidence returning and I think the rest of this year and
the whole of 2022 are going to be very exciting.”
As part of their new spec, Costcutter have introduced a number of in-store franchises, such as Freezi Licks Ice Cream brands and Urban Sips coffee stations (“we believe we have the best tasting coffee on the market”), which have proved hugely popular, with more to be unveiled in the near future.
“We have a really good fresh food team and a brilliant store development team, so we feel we have the skills, expertise and the right offering for the next retail cycle. We are finalising our three-year strategy, which should be complete by early October, and coming out of that will be exciting plans for our three symbol offerings and our service to independent retailers.”
Value has always been at the heart of Barry Group, and continues to be a priority going forward: “I think during the height of Covid, it was all about getting stock and price became secondary but we now need to be very aware that value is important and that is a priority for us, enabling our retailers to compete and to thrive. That’s our purpose in business as a wholesaler, to provide our retailers with the help, support and value they need to compete against larger stores. It’s not just about price, but it’s also about support and advice. We know a lot of our customers a long time and it’s about more than shifting product; we want to see our customers succeed and sometimes that’s just a case of helping them to see their strengths, and that’s something I think we’re good at.”
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