Kwik Save
Encyclopedia
Kwik Save was a discount supermarket
chain in the United Kingdom
until 2007. Its stores were small to medium sized high street
supermarkets, mainly located in areas with below average incomes. It struggled to make profits in the 21st century as superstore operators such as Tesco
and Sainsbury's introduced their own budget brands, and other discounters such as Lidl
and Aldi
(who both arrived in the United Kingdom during the first half of the 1990s
) expanded. The company was listed on the London Stock Exchange
and was once a constituent of the FTSE 100 Index
but it went into administration
on 6 July 2007 and closed most of its stores across the United Kingdom, with the remaining 56 being sold to a new company, FreshXpress
, which itself went into administration in March 2008. It was then resurrected in a smaller form with nine stores, but this second incarnation of FreshXpress
went into administration and ceased trading in 2009. All remaining stores have since been closed.
The Kwik Save brand name is now, as of 2011, owned by convenience store operator Costcutter
.
entrepreneur
Albert Gubay
on 11 May 1959 and based in Prestatyn
, the company rented its first retail shop in Queen Street, Rhyl
in July 1959. Further traditional stores were opened in Chester
and Wrexham
.
In 1964, Gubay visited the United States
with fellow director Ken Nicholson, and learnt about the "baby shark" method of retailing. Combined with ideas gained from West German
retailer Aldi
, the business model was based on buying a limited range of lines on favourable (net 60 or 90 days) payment terms, distributing and selling them at or below cost before the payment fell due, and using the interest on the resulting cash flow to fund the business. The first Kwik Save Discount branded store opened in Colwyn Bay
, produced more sales than the existing Value Foods supermarkets and by 1967 Kwik Save Discount had 13 stores.
Just before it was floated on to the London Stock Exchange
in November 1970, the company changed its name formally to Kwik Save Discount Group Ltd. In 1973, Gubay sold Kwik Save for $28 million. Gubay repeated the low-price retail model using the 3 Boys brand in New Zealand
, Ireland
and the United States
.
, a fellow food discounter, for £45 million. The Company subsequently accepted that it was focused too much on acquisitions rather than its existing operations. It went on to announce the closure of 107 under-performing stores in 1996.
Originally all Kwik Save stores were to be re-branded as Somerfield, now taken over by The Co-operative Food, but it was quickly realised that the look and feel of existing Kwik Save stores - featuring warehouse style wooden shelving, space-saving small checkouts and narrow aisles - would not lend itself well to the Somerfield fascia. For this reason, the original plan was abandoned and the best Kwik Save stores were cherry-picked for conversion, based on location and market demand, receiving a full refurbishment.
.
According to a report in PR Week
in April 2006, Kwik Save hired a marketing agency in a bid to revitalise the brand and reposition it as an alternative to the leading supermarkets. Around £200,000 was allocated to Public Relations
as part of a marketing brief worth £4m-£5m.
It was announced in October 2006 that a £30m refinancing package from unnamed investors was put in place, part of which was used to finance the purchase of a further 45 more stores from Somerfield. Some of those purchased were included in the Competition Commission
investigation ruling into Somerfield's purchase of 114 Safeway Compact
stores in 2004.
In December 2006, The Sunday Times
reported that Kwik Save was suffering from a "sharp fall in sales and mounting losses", and was seeking another financial injection. On 22 January 2007, it was reported that Kwik Save was suffering problems over delays in payment to its major suppliers, with stocks of many core products being limited as a result.
On 29 January 2007, it was reported that a new investor was about to inject £70 million into the Kwik Save business. In mid-February 2007 the company announced that it had managed to source a £50 million refinancing package to revive the failing retailer. In March 2007 the £50 million deal was finalised and Paul Niklas returned as managing director of the company. The holding company changed its name from BTTF to Kwik Save Limited.
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On 29 May 2007, Kwik Save announced plans to close 79 stores with immediate effect. All stores affected were closed by 30 May 2007. Kwik Save's market share fell from 1.2% in the 12 weeks to April 2006 to 0.2% in the same period in 2007, according to TNS Worldpanel. BBC News also reported that Arla Foods UK
stopped delivering fresh milk to the Kwik Save chain in the week beginning 21 May 2007 due to "payment problems".
On 14 June 2007, Kwik Save announced plans to close a further 22 stores with immediate effect in order to protect them from the danger of administration. The group had now closed a third of its stores across the UK, leading to up to 700 job losses.
On 21 June 2007, Kwik Save announced to USDAW that it would not be paying staff, who were expecting to be paid the following day.
On 6 July 2007, the company was placed into administration. Kwik Save was left with 56 stores, which were transferred to a new company called FreshXpress
run by Irish retail entrepreneur Brendan Murtagh. Under the deal all 56 stores stayed open, saving around 600 jobs. Most employees of Kwik Save were unlikely to be paid, having to join other creditors to claim money they were owed from the Official Receiver, unless they were part of the 56 stores going to FreshXpress.
The firm always traded on no-frills, value pricing, with utilitarian shop fittings, basic checkouts and charges for carrier bags. In the early years, when the company had little in the way of effective competition, this was a clear recipe for success among the millions of people who might have found the mainstream supermarkets expensive, so the brand was highly regarded.
The company's quirky image suffered over the years, with increased competition from other discount chains such as Aldi
, Lidl
, Iceland
and Netto
, as well as from larger chains, which introduced their own 'value' brand ranges. Kwik Save was seen for many years as the poor relation of Somerfield, consisting only of stores which were considered unsuitable for conversion to the more upmarket fascia, resulting in a further dilution of brand strength.
In an effort to modernise the Kwik Save brand when under Somerfield ownership, the company undertook a programme to renovate its stores which included new staff uniforms (a black and white chequered shirt which replaced the red t-shirts), new "ASDA-style" shelves to replace the wooden warehouse racking (referred to as "boards and beams"), new floors, checkouts, colour schemes and lighting.
Renovated stores devoted more space to fresh foods, introduced new features, such as bakeries, and removed the requirement for customers to pay for carrier bags which, for many years, was symbolic of the Kwik Save business model. Around a third of the Kwik Save estate was transformed, with each store having between £300,000 and £1,000,000 invested in the improvements. Sales figures from renovated stores suggested that the public did respond positively to the new look, although the profitability of these stores still does not meet that of un-refurbished Somerfield fascia stores.
The off-licence sections of many Kwik Save stores were in a separate department known as Liquorsave. Up until the late 1990s, the fruit and vegetable sections and butchery counters were usually run by local franchisees, usually under the name of Colemans. Some stores also rented out space to non-food retailers. This format had been reduced since the Somerfield takeover, and concessions were phased out in all stores converted to the Somerfield fascia.
During the 1980s, some Kwik Save stores incorporated a frozen foods section, which traded under the name of Arctic Freezer Centres.
promoting the Kwiksave Freephone Helpline, which people could call if they wanted to report prices cheaper elsewhere. They ended with the slogan "Kwik Save - Because we're cheap, you're cheerful!"
Supermarket
A supermarket, a form of grocery store, is a self-service store offering a wide variety of food and household merchandise, organized into departments...
chain in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
until 2007. Its stores were small to medium sized high street
High Street
High Street, or the High Street, is a metonym for the generic name of the primary business street of towns or cities, especially in the United Kingdom. It is usually a focal point for shops and retailers in city centres, and is most often used in reference to retailing...
supermarkets, mainly located in areas with below average incomes. It struggled to make profits in the 21st century as superstore operators such as Tesco
Tesco
Tesco plc is a global grocery and general merchandise retailer headquartered in Cheshunt, United Kingdom. It is the third-largest retailer in the world measured by revenues and the second-largest measured by profits...
and Sainsbury's introduced their own budget brands, and other discounters such as Lidl
Lidl
Lidl is a discount supermarket chain based in Germany that operates over 7,200 stores across Europe. The company's full name is Lidl Stiftung & Co. KG...
and Aldi
ALDI
ALDI Einkauf GmbH & Co. oHG, doing business as ', short for "Albrecht Discount", is a discount supermarket chain based in Germany...
(who both arrived in the United Kingdom during the first half of the 1990s
1990s
File:1990s decade montage.png|From left, clockwise: The Hubble Space Telescope floats in space after it was taken up in 1990; American F-16s and F-15s fly over burning oil fields and the USA Lexie in Operation Desert Storm, also known as the 1991 Gulf War; The signing of the Oslo Accords on...
) expanded. The company was listed on the London Stock Exchange
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
and was once a constituent of the FTSE 100 Index
FTSE 100 Index
The FTSE 100 Index, also called FTSE 100, FTSE, or, informally, the footsie , is a share index of the 100 most highly capitalised UK companies listed on the London Stock Exchange....
but it went into administration
Administration (insolvency)
As a legal concept, administration is a procedure under the insolvency laws of a number of common law jurisdictions. It functions as a rescue mechanism for insolvent entities and allows them to carry on running their business. The process – an alternative to liquidation – is often known as going...
on 6 July 2007 and closed most of its stores across the United Kingdom, with the remaining 56 being sold to a new company, FreshXpress
FreshXpress
FreshXpress was a discount supermarket chain in the United Kingdom. It was originally formed in 2007, from the rump of the defunct Kwik Save chain, by Irish retail entrepreneur Brendan Murtagh...
, which itself went into administration in March 2008. It was then resurrected in a smaller form with nine stores, but this second incarnation of FreshXpress
FreshXpress
FreshXpress was a discount supermarket chain in the United Kingdom. It was originally formed in 2007, from the rump of the defunct Kwik Save chain, by Irish retail entrepreneur Brendan Murtagh...
went into administration and ceased trading in 2009. All remaining stores have since been closed.
The Kwik Save brand name is now, as of 2011, owned by convenience store operator Costcutter
Costcutter
Costcutter is based in the United Kingdom, Ireland and Poland under which there are supermarkets and local and urban convenience stores. The banner also has its own brand of goods and products which are sold alongside Nisa Today own-brand products and branded products.As of December 2006,...
.
History
Foundation
Founded as Value Foods by WelshWales
Wales is a country that is part of the United Kingdom and the island of Great Britain, bordered by England to its east and the Atlantic Ocean and Irish Sea to its west. It has a population of three million, and a total area of 20,779 km²...
entrepreneur
Entrepreneur
An entrepreneur is an owner or manager of a business enterprise who makes money through risk and initiative.The term was originally a loanword from French and was first defined by the Irish-French economist Richard Cantillon. Entrepreneur in English is a term applied to a person who is willing to...
Albert Gubay
Albert Gubay
Albert Gubay, KC*SG is a Welsh businessman and philanthropist, who made his fortune in retailing with Kwik Save, building it further on investments, mainly in property development...
on 11 May 1959 and based in Prestatyn
Prestatyn
Prestatyn is a seaside resort, town and community in Denbighshire, North Wales. It is located on the Irish Sea coast, to the east of Rhyl. At the 2001 Census, Prestatyn had a population of 18,496.-Prehistory:...
, the company rented its first retail shop in Queen Street, Rhyl
Rhyl
Rhyl is a seaside resort town and community situated on the north east coast of Wales, in the county of Denbighshire , at the mouth of the River Clwyd . To the west is the suburb of Kinmel Bay, with the resort of Towyn further west, Prestatyn to the east and Rhuddlan to the south...
in July 1959. Further traditional stores were opened in Chester
Chester
Chester is a city in Cheshire, England. Lying on the River Dee, close to the border with Wales, it is home to 77,040 inhabitants, and is the largest and most populous settlement of the wider unitary authority area of Cheshire West and Chester, which had a population of 328,100 according to the...
and Wrexham
Wrexham
Wrexham is a town in Wales. It is the administrative centre of the wider Wrexham County Borough, and the largest town in North Wales, located in the east of the region. It is situated between the Welsh mountains and the lower Dee Valley close to the border with Cheshire, England...
.
In 1964, Gubay visited the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
with fellow director Ken Nicholson, and learnt about the "baby shark" method of retailing. Combined with ideas gained from West German
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
retailer Aldi
ALDI
ALDI Einkauf GmbH & Co. oHG, doing business as ', short for "Albrecht Discount", is a discount supermarket chain based in Germany...
, the business model was based on buying a limited range of lines on favourable (net 60 or 90 days) payment terms, distributing and selling them at or below cost before the payment fell due, and using the interest on the resulting cash flow to fund the business. The first Kwik Save Discount branded store opened in Colwyn Bay
Colwyn Bay
- Demography :Prior to local government reorganisation on 1 April 1974 Colwyn Bay was a municipal borough with a population of c.25,000, but in 1974 this designation disappeared leaving five separate parishes, known as communities in Wales, of which the one bearing the name Colwyn Bay encompassed...
, produced more sales than the existing Value Foods supermarkets and by 1967 Kwik Save Discount had 13 stores.
Just before it was floated on to the London Stock Exchange
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
in November 1970, the company changed its name formally to Kwik Save Discount Group Ltd. In 1973, Gubay sold Kwik Save for $28 million. Gubay repeated the low-price retail model using the 3 Boys brand in New Zealand
New Zealand
New Zealand is an island country in the south-western Pacific Ocean comprising two main landmasses and numerous smaller islands. The country is situated some east of Australia across the Tasman Sea, and roughly south of the Pacific island nations of New Caledonia, Fiji, and Tonga...
, Ireland
Ireland
Ireland is an island to the northwest of continental Europe. It is the third-largest island in Europe and the twentieth-largest island on Earth...
and the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
.
1990s
In 1994, Kwik Save acquired 117 supermarkets from ShopriteShoprite (Isle of Man)
Shoprite Ltd. is a supermarket chain currently trading in the Isle of Man. It is a wholly owned subsidiary of Isle of Man Enterprises plc . The company shares are traded on the PLUS Stock Exchange though will be delisted from 3rd January 2012...
, a fellow food discounter, for £45 million. The Company subsequently accepted that it was focused too much on acquisitions rather than its existing operations. It went on to announce the closure of 107 under-performing stores in 1996.
Somerfield merger
Kwik Save became part of the Somerfield group in 1998 when it and Somerfield merged, operating as a trading division of Somerfield Stores Ltd. Following the merger Somerfield's Food Giant discount supermarkets were re-branded as Kwik Save.Originally all Kwik Save stores were to be re-branded as Somerfield, now taken over by The Co-operative Food, but it was quickly realised that the look and feel of existing Kwik Save stores - featuring warehouse style wooden shelving, space-saving small checkouts and narrow aisles - would not lend itself well to the Somerfield fascia. For this reason, the original plan was abandoned and the best Kwik Save stores were cherry-picked for conversion, based on location and market demand, receiving a full refurbishment.
Sale of stores to BTTF
On 27 February 2006, Somerfield Stores Ltd sold the Kwik Save brand and 171 stores to BTTF, an investment vehicle headed by Paul Niklas, for an undisclosed sum. Somerfield re-branded the 102 Kwik Save sites it retained under its own name and a further 77 stores were sold to other retailers, including 19 to NettoNetto (store)
Netto is a Danish discount supermarket operating in several European countries. Netto is owned by Dansk Supermarked Group, which in turn is partly owned by A.P. Møller-Mærsk Group.Netto also operates an express version of the store, known as Døgn Netto...
.
According to a report in PR Week
PR Week
PRWeek is a weekly trade magazine for the public relations industry.PRWeek also produces research into the size and shape of the UK public relations industry including the annual ranking of Top 150 PR consultancies and Salary Survey as well as surveys into industry-relevant issues such as staff...
in April 2006, Kwik Save hired a marketing agency in a bid to revitalise the brand and reposition it as an alternative to the leading supermarkets. Around £200,000 was allocated to Public Relations
Public relations
Public relations is the actions of a corporation, store, government, individual, etc., in promoting goodwill between itself and the public, the community, employees, customers, etc....
as part of a marketing brief worth £4m-£5m.
It was announced in October 2006 that a £30m refinancing package from unnamed investors was put in place, part of which was used to finance the purchase of a further 45 more stores from Somerfield. Some of those purchased were included in the Competition Commission
Competition Commission
The Competition Commission is a non-departmental public body responsible for investigating mergers, markets and other enquiries related to regulated industries under competition law in the United Kingdom...
investigation ruling into Somerfield's purchase of 114 Safeway Compact
Safeway (UK)
Safeway was a chain of supermarkets and convenience stores in the United Kingdom. It started as a subsidiary of the American Safeway Inc., before being sold off in 1987....
stores in 2004.
In December 2006, The Sunday Times
The Sunday Times (UK)
The Sunday Times is a Sunday broadsheet newspaper, distributed in the United Kingdom. The Sunday Times is published by Times Newspapers Ltd, a subsidiary of News International, which is in turn owned by News Corporation. Times Newspapers also owns The Times, but the two papers were founded...
reported that Kwik Save was suffering from a "sharp fall in sales and mounting losses", and was seeking another financial injection. On 22 January 2007, it was reported that Kwik Save was suffering problems over delays in payment to its major suppliers, with stocks of many core products being limited as a result.
On 29 January 2007, it was reported that a new investor was about to inject £70 million into the Kwik Save business. In mid-February 2007 the company announced that it had managed to source a £50 million refinancing package to revive the failing retailer. In March 2007 the £50 million deal was finalised and Paul Niklas returned as managing director of the company. The holding company changed its name from BTTF to Kwik Save Limited.
Store closures
Arla Foods UK
Arla Foods UK Limited is a major dairy products company in the United Kingdom, based in Leeds, and a subsidiary of the Swedish-Danish Arla Foods Group, .-Company profile:...
stopped delivering fresh milk to the Kwik Save chain in the week beginning 21 May 2007 due to "payment problems".
On 14 June 2007, Kwik Save announced plans to close a further 22 stores with immediate effect in order to protect them from the danger of administration. The group had now closed a third of its stores across the UK, leading to up to 700 job losses.
On 21 June 2007, Kwik Save announced to USDAW that it would not be paying staff, who were expecting to be paid the following day.
On 6 July 2007, the company was placed into administration. Kwik Save was left with 56 stores, which were transferred to a new company called FreshXpress
FreshXpress
FreshXpress was a discount supermarket chain in the United Kingdom. It was originally formed in 2007, from the rump of the defunct Kwik Save chain, by Irish retail entrepreneur Brendan Murtagh...
run by Irish retail entrepreneur Brendan Murtagh. Under the deal all 56 stores stayed open, saving around 600 jobs. Most employees of Kwik Save were unlikely to be paid, having to join other creditors to claim money they were owed from the Official Receiver, unless they were part of the 56 stores going to FreshXpress.
Brand image
Kwik Saves stores were primarily aimed at the lower end of the food market, a position which had been maintained throughout the company's history, except for the introduction of some non-food lines during the Somerfield era.The firm always traded on no-frills, value pricing, with utilitarian shop fittings, basic checkouts and charges for carrier bags. In the early years, when the company had little in the way of effective competition, this was a clear recipe for success among the millions of people who might have found the mainstream supermarkets expensive, so the brand was highly regarded.
The company's quirky image suffered over the years, with increased competition from other discount chains such as Aldi
ALDI
ALDI Einkauf GmbH & Co. oHG, doing business as ', short for "Albrecht Discount", is a discount supermarket chain based in Germany...
, Lidl
Lidl
Lidl is a discount supermarket chain based in Germany that operates over 7,200 stores across Europe. The company's full name is Lidl Stiftung & Co. KG...
, Iceland
Iceland (supermarket)
Iceland is a supermarket chain in the United Kingdom and Ireland. Iceland's primary product lines include frozen foods, such as frozen prepared meals and frozen vegetables - hence the name of the company...
and Netto
Netto (store)
Netto is a Danish discount supermarket operating in several European countries. Netto is owned by Dansk Supermarked Group, which in turn is partly owned by A.P. Møller-Mærsk Group.Netto also operates an express version of the store, known as Døgn Netto...
, as well as from larger chains, which introduced their own 'value' brand ranges. Kwik Save was seen for many years as the poor relation of Somerfield, consisting only of stores which were considered unsuitable for conversion to the more upmarket fascia, resulting in a further dilution of brand strength.
Store formats
Traditionally Kwik Save stores had warehouse style wooden shelving, laid out in a traditional style familiar from most early supermarkets.In an effort to modernise the Kwik Save brand when under Somerfield ownership, the company undertook a programme to renovate its stores which included new staff uniforms (a black and white chequered shirt which replaced the red t-shirts), new "ASDA-style" shelves to replace the wooden warehouse racking (referred to as "boards and beams"), new floors, checkouts, colour schemes and lighting.
Renovated stores devoted more space to fresh foods, introduced new features, such as bakeries, and removed the requirement for customers to pay for carrier bags which, for many years, was symbolic of the Kwik Save business model. Around a third of the Kwik Save estate was transformed, with each store having between £300,000 and £1,000,000 invested in the improvements. Sales figures from renovated stores suggested that the public did respond positively to the new look, although the profitability of these stores still does not meet that of un-refurbished Somerfield fascia stores.
The off-licence sections of many Kwik Save stores were in a separate department known as Liquorsave. Up until the late 1990s, the fruit and vegetable sections and butchery counters were usually run by local franchisees, usually under the name of Colemans. Some stores also rented out space to non-food retailers. This format had been reduced since the Somerfield takeover, and concessions were phased out in all stores converted to the Somerfield fascia.
During the 1980s, some Kwik Save stores incorporated a frozen foods section, which traded under the name of Arctic Freezer Centres.
Own-brand goods
In the 1990s, the chain launched a No Frills brand, offering cheaper generic products, an idea that has since been taken up by all of the major supermarket chains. This was replaced by the "Simply" range shortly after the merger with Somerfield. In March 2006, the new owners of the chain announced that it would no longer sell own-brand goods, switching instead to well known household brands at discount prices.Advertising
In the 1990s, Kwik Save used adverts featuring Michael BarrymoreMichael Barrymore
Michael Kieron Parker , better known by his stage name Michael Barrymore, is a British comedian who appeared as a presenter of game shows and light entertainment programmes on British television in the 1980s and 1990s. These included Strike It Lucky, My Kind of People, My Kind of Music and Kids Say...
promoting the Kwiksave Freephone Helpline, which people could call if they wanted to report prices cheaper elsewhere. They ended with the slogan "Kwik Save - Because we're cheap, you're cheerful!"