AN EXCLUSIVE WITH MORNE DREYER
With the effects of the pandemic still lingering, many businesses across the country are feeling the pinch. Sadly, some have shut their doors, never to re-open. To find out how Covid-19 is impacting the retail fitment sector, we sat down for an exclusive interview with Morne Dreyer, Franchise Director of the Supa Quick group of retail stores, who also let us in on the Franchise’s plans for the future. Supa Quick is the longest-established fitment chain in South Africa, founded in 1986. This success story also boasts over 200 retail stores around the country, positioning it among its opposition, as the franchise with the biggest footprint.
Morne, thank you for spending this time with us. How has the pandemic and the lockdown that ensued impacted your operations?
Suffice to say that April was a complete write-off, with most of our stores, (aside from a handful that were deemed essential services providers), closed for the month. This meant that several stores found themselves in financial stress. As the Franchisor, we immediately stepped in to see how we could assist, coming up with specific payment packages, extended payment terms and a two-month franchise fee waiver. Thankfully, by early July, most stores were trading at 70% capacity, with stores in the rural areas back to 100% trading capacity, due to the Agri sector being part of essential service providers.
Were there any casualties, along the line?
Yes. Unfortunately, for some stores that were already struggling pre-Covid-19, the pandemic was the last nail in the coffin. They were not able to recover. Around 31 stores found themselves in dire financial straits, six of which were unable to reopen.
Were any of these casualties area-specific?
To give you an idea, our Melville store, which traditionally relied heavily on university students from Wits and UJ for its business, was unable to weather the storm, with its clientele disappearing virtually overnight.
Equally, stores located in previously buoyant motor vehicle dealership strongholds, suffered a major blow with many motor dealerships either closing or consolidating their operations into one. These closures are very sad of course, with huge implications for their staff and families. But, unfortunately, those with pre-existing sissues, or insufficient financial backing, were forced to shut their doors forever.
What is the feedback from your franchisees a few months down the line?
Thankfully, from a sales point of view, the majority experienced record months between July and September, with October also showing pleasing figures. It would appear the lockdown did not affect our consumers all that much, with not many cutting back on replacing their tyres. However, consumers are exploring their choice of product more carefully, which has led to a boost in sales of our Firestone product, which comes with a free Tyre Damage Guarantee.
At the same time, although some are gravitating towards cheaper brands in order to save some money, our Bridgestone and Firestone brands exceed expectations with positive sell-out growth over the last 6 months.
Who looks after your many franchisees?
We recently doubled up on the number of Area Managers, enabling them to spend more time with each of the stores under their care, in a bid to add value. The demographic of our franchisees, is such that they still enjoy an in-person experience with our managers, rather than a virtual one.
How are you finding the retail sector as a whole?
There is a bigger focus on price and promotions by all the retail chains, especially those aligned to the manufacturing companies. We are seeing aggressive There is a bigger focus on price and promotions by all the retail chains marketing coupled with price-cutting, as everyone struggles to compete in the hopes of arriving at pre-Covid trading levels.
What would you say are the biggest challenges facing the Supa Quick franchise group at this point in time?
Undoubtedly, the growing number of cheap imports filtering into the country. These are not only having a disastrous effect on road safety, they are compelling us to source our own price competitive products, that deliver on both price and quality. The consumer is often unaware that cheap imports are not only a hazard, but that there is no recourse, in the event of a claim. Our sales force is working hard to educate the consumer on the merits of fitting a trusted brand that is linked to a guarantee, over an unknown ‘cheapie’ from another part of the world.
Notwithstanding, we do not want to get into a price war. Instead, we are focusing on remaining unique. With the backing of a global giant such as Bridgestone, as well as a tyre damage guarantee, we believe that we can fight imports successfully. Bear in mind, that for cash-strapped individuals that fall into the mid-to-low tier of the market, price is everything. For them, our ability to provide a solution by way of an imported tyre with the right quality and price, offers them peace of mind, especially now during the summer months when there is a lot of rain and more potholes to contend with on the roads.
What is being done, from an industry perspective, to clamp down on substandard cheapies coming into South Africa?
Together with the RMI, we are trying to understand exactly what is coming into the country and what the legislation is around that product. The monitoring of substandard tyres is a matter for the authorities, but unfortunately, this is not being policed as well as it should be.
What about Bridgestone’s historic partnership with the SA Taxi Industry? Is this alliance being used to educate taxi drivers on the importance of fitting reputable makes of tyres to their vehicles?
We are currently in discussions with them to launch a safety initiative, details of which will be announced in the near future.
Is Supa Quick still supplying the full range of underbody components, in addition to tyres?
Very much so. It is critical to focus on ratios of sales between the two at every store. We have reassessed our preferred supplier list and are currently negotiating marketing opportunities with them. We are further encouraging our stores to expand on their underbody offering by adding other essential components, such as nitrogen in tyres, wiper blades and oil changes, to their mix. A better split between tyre and underbody sales does not only benefit our customers, it allows our franchisees to tap into higher margin opportunities.
Speaking of opportunities, are you planning to open any new stores in the foreseeable future?
The Covid era has seen declining property development and fewer development opportunities to open new stores, this, despite all the new mall developments in Gauteng. So, for us, this has also meant total reliance on organic growth, as opposed to new business. Although we have opened three new stores this year, this is far from where we want to be. We are about to launch an aggressive expansion programme during 2021-22, and are busy meeting with property developers to identify key trading areas that will continue to position Supa Quick top of mind to the consumer.
We are planning to open 10 new stores during the course of 2021, with plans for further expansion in 2022. With business radically changing in the era of the pandemic, we need to be where the action is. We enjoy the largest footprint of all the retail chains, and we are planning to maintain this advantage. Moreover, we are currently looking at the business from a retail operations
standpoint, rather than a sales/market share standpoint.
This will allow us to add value to our franchisees’ businesses, which are presently being assessed via a newly implemented growth plan to identify key success factors within their respective operations. In short, we are taking a holistic view, essentially asking: how can we add value from a financial/customer experience/
look and feel standpoint? From a store perspective, we want to be able to give our customers what they want. We want to provide the ultimate customer experience that keeps them coming back.
How are you doing your ‘homework’ in this regard?
For one, by focusing heavily on our female clientele in terms of what they would like their customer experience to be. For instance, what should the waiting area look like? Should we install a coffee station or would they prefer a full-fledged coffee shop instead? Would they prefer to sit on leather sofas or chairs? All this, plus much more, is part of the research process, so that in the end, we can combine a quality product and service with a pleasant shopping experience.
Are Covid protocols in place at all your stores?
Much like every other business, all Supa Quick stores have the necessary PPE and protocols in place. Customers are obliged to sanitise and have their temperature taken, while store employees are under strict instruction to sanitise the vehicle internally, before and upon completion of the job. So, yes, I am confident that our stores are fully compliant with Covid-19 prevention measures.
In conclusion, what message do you have for the consumer? Why Supa Quick?
That’s an easy one. Supa Quick is Bridgestone’s family channel and preferred distributor of Bridgestone and Firestone tyres. Bridgestone has been in existence for over 80 years and is the number one tyre manufacturer in the world. The consumer can have faith in knowing that they are buying a trusted brand. The Firestone brand in particular, enjoys iconic status in South Africa, one that stands for heritage, service and reliability