Ritchies Supermarkets
RITCHIES SUP
Australia’s largest independent grocers
PERMARKETS
s with the community at its heart
R
itchies Stores are more than just a chain of stores. The very name has become synonymous with providing Australian communities with the convenience commodities needed in every day life. The history of Ritchies goes way back to 1852, when young adventurer Thomas Ritchie fought hardship to open what became the well-known Ritchies General Store in Frankston. More than 160 years on, trading as Ritchies Supa IGA (Independent Grocers of Australia alliance), the company is Australia’s largest independent grocery chain, which owns supermarkets in Victoria, Queensland and New South Wales. More than 120 independent retailers in Victoria and more
than 1100 IGA retailers across Australia fall under the Supa IGA bracket, which is supplied by wholesalers Metcash. Ritchie’s is proud to be privately owned but joined with these other retailers to gain synergies, improve buying power and maximise its retail offer to customers. Its motto, ‘Where the community benefits’ is one that the company strives to achieve with its retail offerings and highest quality customer service. Ritchies has 125 shareholders, the majority of whom work within the business. With 4,730 members of staff, Ritchies operates 67 supermarkets and 50 liquor stores in the eastern states of Australia. The head office located in Carrum Downs, Victoria.
COMPETITIVE MARKET In November last year, Ritchies bought the second-largest independent supermarket group in Victoria in above that further strengthened its position at the very top of the independent stable. It purchased 13 supermarkets owned by Victoria’s Fishers Supa IGA business. Ritchies chief executive Fred Harrison commented at the time of the sale, “It is not very often the No 1 player in the state buys the No 2 player but that is what’s happening here. “Consolidation is good. What it does is remove administrative costs from the business, it streamlines the business and it means we have more stores whose sole endeavour is to focus on retail rather than covering admin and paper work. It does give us more opportunity when talking to suppliers to have
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better pricing, better trading terms for our businesses.’’ The move came as independent supermarkets step up their battle to compete in such a highly competitive market, with large retailers such as Woolworths and Coles continuing to lower prices in the war to win the consumer dollar. MATCHING THE COMPETITION Ritchies, like all independent stores in the food retail industry, has had to endure a tough time in recent years. The clout of chain brands able to offer smaller prices in bigger spaces left independent grocers struggling to keep hold of market share. A change in consumer habits to wanting more fresh food has also contributed.
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Metcash, which owns 26 percent of Ritchies, set out a clear plan to reinvigorate the independent sector by making IGA stores more price competitive. This included an investment of $40 million a year into matching shelf prices at other retailers and refurbishing IGA stores, while adding higher-margin and faster-growing fresh foods such as meat, dairy and produce. It is testament to Ritchies that it has been able to bounce back from some lean years. It installed Lenard’s poultry shops, Maille mustard boutiques, cheese counters and introduced an extensive range of fruit and vegetables into new and refurbished stores. And it is reaping the rewards. After a 73 per cent drop in earnings over the past three years,
Ritchies’ profits rose almost four-fold in fiscal 2015, from $2.5 million to $9.7 million, and sales grew too, rising 1 per cent to $854 million. This reflects an increasingly better position in the market, where independent market share has stabilised and Ritchies in a great place to take advantage. CHARITY SCHEME Ritchies operates a number of customer schemes that not only benefit consumers but the local community. The Ritchies’ Community Benefit Card Program donates a percentage of the money spent by customers to their nominated club, school or charity. With a presentation of the benefit card, it automatically allocates 0.5% of the money you spend to the nominated organisation, as long as they are achieving the minimum of $2,000 spent each month. As well as this, there are also hundreds of weekly specials that have extra discounts for Ritchies Community Benefit Cardholders too. Since its inception, Ritchies has donated tens of millions to thousands o local causes and charities. By operating schemes such as these, Australian consumers are able to identify with the Ritchies brand which helps to increase loyalty. GUIDING PRINCIPLES Ritchies prides itself on engagement within in the community, and continues to live by its guiding principles of integrity, trust and commitment. This culture is firmly established in the working environment and transpires to the shop floor. After positive financial results last year, Ritchies looks set to be on the up once again.
Oliver Moy Publisher
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