Fri, 27/11/2015 - 12:40
Current Issue 77
In five years, Corner Bakery grown its convenience food business into the fourth biggest retail chain in South Africa, with more than 640 stores in the country today and a sizeable portfolio of food & drink products
Taking a Share of the Retail Pie
Writer: Emily Jarvis
Project Manager: Chris Marsh
Selling more than one million pies every month and creating more than 2,000 jobs through its franchisees, Corner Bakery has cemented its reputation as a fresh food and confectionery provider, baking products on-site daily to the highest food hygiene and safety standards across the franchise. Complementing the sale of pies and baked goods is a new range of Brazilian coffee from the Equatorial Coffee franchise brand.
Corner Bakery recently passed the 640 store mark, making the up-and-coming franchise Group the fourth biggest retail chain in South Africa in terms of store numbers, and one of the biggest local business success stories in the country.
“We are dedicated to bringing you our wide range of products every day with extra convenience to suit your schedule at the kind of prices that suit your pocket,” says the Company.
Holding Company, Retsol’s Chief Executive Officer (CEO), Wayne Duncan is particularly proud of the rapid growth and acceptance of both brands into South Africa’s convenience food & drink industry.
“Retsol was started and is still operated by experienced entrepreneurs who are constantly innovating to offer consumers the best products and services in a retail setting,” the CEO states.
Since purchasing Corner Bakery in 2007, Duncan has grown the Company from a “franchise by name only” with no franchisees, to one with outlets in Engen Garages across not just South Africa, but a further 65 stores spread across Botswana, Namibia, Zimbabwe, Mozambique, Zambia, Reunion and Mauritius.
Since signing a management agreement with Engen just under five years ago, with outlets established on Engen service station forecourts that are operated by Engen franchisees, the number of Corner Bakery stores has grown exponentially; with the majority of stores located along the west and east coast with a further 60 inland.
Although the Company’s core product category is pies - which is particularly well suited to, and in demand at service stations - additional products have been added to complement its portfolio to cater for a range of tastes.
Commenting on the reasons for the franchise and franchisee success of the Engen Garages, Gary Milne, Managing Director of Corner Bakery said that “the service station forecourt market is an exciting and unique retail environment and hence a networked solution is important. That means that there’s a need for standardising the right products”.
In total, Corner Bakery has more than 2,000 menu items and each franchisee can select between 60 and 100 items so as to tailor each individual store offering to suit the individual market. “This enables the brand to be both flexible and one size fits all,” added Milne.
Duncan and Milne said in a recent article that the success of the Corner Bakery brand within the existing South African market can be attributed to the fact that consumers across all LSM’s (living standard measures) are becoming more sophisticated in their choices.
Milne explained: “At the very beginning, pies were the staple product and accounted for between 80 and 90 percent of our business. The Company then began to explore value-add products for the consumer, including the addition of coffee through another Retsol subsidiary - the Equatorial Coffee brand - subsequently growing the product offering.
“We found out very quickly that, in the convenience food space, there is a strong correlation between buying food and beverages. To exploit this synergy, Corner Bakery has offered a number of combination coffee and food promotions.”
Nevertheless, pies still dominate the menu and together with other fast-food items, now account for 50 percent of turnover.
After enhancing its product range with value-add food & drink products, Corner Bakery partnered with Rhodes Food Group to create its own, larger 210 gram (g) pie; compared to the standard 170g and 180g pies that were available before. These new pies were launched at the same price point and with the same stamp of quality Corner Bakery is known for.
Another recent success has been the introduction of Pie Bites™ – smaller mini pies of between 35g and 50g, which are sold in packs of three. “Still within the pie category, Corner Bakery has introduced the Big Shot Burger Pie™, which is effectively ‘the Big Mac’ of pies. This has quickly taken its place among the brand’s top five products,” highlighted Milne.
As the emerging middle-class continues to offer promise for the convenience food & drink industry, Corner Bakery has adopted an expansion strategy to take the brand beyond its current geographies; targeting the addition of stores in the DRC and Gabon, as well as increasing the total store count across the entire African continent.
In the past few years, Corner Bakery’s turnover growth has averaged 20 percent year-on-year and Duncan is confident that the franchise will continue to register double-digit growth for the near future. “We are growing sales aggressively. So far, growth has been organic. Revenue has come through the existing market as well as product innovation,” Duncan explained in a recent interview.
Supported by a vertically integrated supply chain and facilities in Cape Town and Durban, the Company will also be adding a further factory in Johannesburg early next year, in a bid to cater for its expansion plans and grow the franchise into new regions.