MICHAEL HUMPHREYS OUTLINES OBJECTIVES FOR SA’s LARGEST FITMENT GROUP Supa Quick – South Africa’s largest fitment Centre franchise – has a new Managing Director in Michael Humphreys, who took up the role on 1 April 2023, in a career move he laughingly describes as this year’s April Fools for the fitment group. But his skills and expertise in franchising are no laughing matter, having amassed a wealth of knowledge and experience in the retail sector during the course of his career, both domestically and internationally.
We caught up with Michael in an exclusive interview to find out more about his earlier years, what led to his current designation, and how he plans to tackle important issues facing tyre and underbody fitment, in a challenging trading space.
Tell us a little about you Michael – where you grew up and the career path that brought you to where you are today.
I grew up and went to school in Ficksburg a small town in the Eastern Free State, after which I went to study Architecture at the Free State University in Bloemfontein. At the time of completing my studies it was a very popular trend to venture overseas, so I took up the opportunity to travel to the United Kingdom, after graduating. After a few temporary employment opportunities in the UK, I was employed by Saunders Partnership Architects, just outside London, as a Design Architect and within the next 8 years became a Partner in the practice. Saunders was Tesco’s lead architecture firm – so my journey into Retail started by designing their standard store layouts and evolved into providing them with retail design solutions to improve their customer experiences within their stores and retail developments.
My key learning being that good architecture in retail should facilitate good operations, how “pretty the store looks” is secondary to that. Ultimately the yearning to move back to South Africa culminated in landing a position at YUM as Head of Design (Africa), where I was responsible for building new stores, revamping the existing stores and evolving the store designs to meet Global brand standards and international design trends. Following a 5 year stint at SPAR Group (South Rand Division) where I was also involved with store design, building new stores and revamping existing stores, I took up the opportunity to lead the ESKORT Retail stores arm, known as Target Meats. Here I really honed by Retail Operations knowledge and skill, leading a retail store base that grew from 9 stores to 20 stores in 2.5 years. I took on the responsibility of franchising the business to meet the objective of establishing a nationwide presence for our stores.
Automotive fitment and food could not be further apart. How did this departure from an industry you were familiar with, to one you knew little of, come about?
Although the industries themselves may differ, the fundamental principles of franchising remain the same. Having achieved my goals and objectives at Target Meats, I was searching for a new challenge when the opportunity with Bridgestone and Supa Quick arose, and so I applied for the position. Having managed a cluster of retail stores, I gained insights into the critical elements necessary for the success of both a franchise and its franchisees.
This includes aspects such as maintaining healthy cash flow, implementing essential structures, and managing personnel in a manner consistent with the overall business strategy. How you engage with your customer and entice them with your offer is of course paramount.
Eight months into your new assignment, what are your impressions of the South African fitment market thus far?
Let me start off by saying the tyre business can be pretty tough and ruthless. However, it also opens up substantial opportunities for those ready to tackle the challenges. Most striking is the trend of multi-alliances, with franchisees joining multiple groups in an effort to secure the best deals. This is highly irregular in most industries and I find it fascinating that the local industry has evolved in this unique way. I call this a ‘tyre fitment industry anomaly’, that developed from the time when tyre manufacturers concentrated on making their tyres widely accessible and securing as many available distribution channels as possible.
Does this pose a challenge when it comes to maintaining confidentiality around strategic aims and objectives you are working towards?
There are a handful of individuals sporting multiple alliances in our group, but we are entrusting them to be fully aligned with us and to honour their commitment to our fitment chain. Luckily, we do not receive any information on our competitors from them, which serves to appease any concerns we may have over their ability to observe confidentiality.
What about the trend to switch alliances? Are you seeing this at this time?
This does seem to be the trend with one particular fitment center group that is currently struggling. We are seeing a number of individuals from this camp knocking on our doors to swap alliances and obtain more certainty with regard to their business outlook. We are also seeing buying groups becoming a lot stronger, as franchisees do not need an alliance with a manufacturer to operate, thereby doing away with the need for them to hold stock. That said, an alliance with a manufacturer has its advantages – it gives you a strong identity and association, so suffice to say, that there is no perfect business model for this industry and I think this is a current challenge that many in the industry is wrestling with.
What are the major challenges facing your franchisees?
The biggest challenge being faced by South African businesses in general, is power interruption. Our franchisees have noted a considerable decline in sales over loadshedding periods. Establishing partnerships with suppliers is equally important, as the latest deal we have procured with Shell illustrates. Supa Quick stores will now be able to sell Shell motor oil throughout their stores, at highly competitive prices in the retail environment. We value these supplier relationships and some of our suppliers have been on this journey to evolve our focus from “merely being tyre experts” to being “more than tyre experts”. Aside from this, we continue to embark on a rigorous customer service drive via social media, google review ratings and so on. Consumers rely on our expert advice, great value and good service. Delivering on these aspects is the key to making us sustainable for the long term.
What are some of your immediate goals and objectives?
Growth, in the quest to remain the largest fitment group in the country, is one of our key objectives. This year alone we opened 11 new stores based on a newly-adopted strategy to position ourselves in premium locations. We plan to sustain this pipeline in the future by forging connections with developers and landlords in what we identify as “premium” locations to secure the optimal retail space. Having the largest network of stores and our “inter dealer relationship” allows us to best serve the national and local fleet businesses which are also integral part to our Franchisees revenue stream. Securing more fleet business is also a priority for our Supa Quick Head Office team.
Expanding our range of products and services to better cater to customer needs is essential for enhancing the attractiveness and long-term sustainability of our business model. We aim for customers to recognize us as “more than tyre experts”.
Bridgestone is looking to close its commercial retail operations. Are Supa Quick franchisees equipped to service Bridgestone’s commercial fleets?
Currently, we have around 40 Supa Quick stores nationally that are authorized and approved as TBR fitment centers, but we recognize there will likely be some residual business taken up by the opposition. Declining sales in the commercial market (overall TBR sales in South Africa have declined by 17% this year) and our global strategy to be more asset light, have led to the unfortunate decision to investigate the closure of 14 of our equity stores in South Africa, Zambia and Eswatini. Consequently, we are now in a Section 189 negotiation process with staff. If there is a viable way to retain these jobs, we are committed to doing so.
Are there any notable developments within Supa Quick you can comment on? The biggest development is that as of midway through 2023 Supa Quick Retail Pty Ltd was registered to provide us as a business more independence from our holdings company Bridgestone South Africa. With independence comes responsibility and we now as a team need to maintain our existing franchise and supplier revenue streams, but also create new revenue streams with suppliers to sustain the business and generate our own profit.
What can we expect to see from Supa Quick in 2024?
As already mentioned, we will continue to add more strategically-placed stores alongside continuing to take care of our fleet business, which makes up a big part of our business. This will require a greater integration and alignment of our systems in a bid to become fully fleet aligned. You can expect to see new stores open almost monthly next year and we hope to complete our brand refresh within our network by the middle of next year.
Our rebranded stores not only make a statement, but also cultivate a more customer-friendly environment, enhancing the overall experience for our valued customers. We’ve already established relevant new supplier connections across various product categories, and this includes integrating new tyre suppliers into our network. Keep an eye out for our expanded presence in the digital realm. As with any retail business, focusing on this aspect is crucial for our success! We are really excited about what 2024 will have in store for our Supa Quick business!