Can you tell us more about First Master Retailer?

There is a lot of knowledge about retailing globally,there are experts like Sam Walton who built Wal-Mart and othergreat companies such as Carrefour, Tesco (even in the midst of obvious challenges) that are well-grounded in the business of retailing. In Nigeria, the concept of neighborhood Supermarket is bourgeoning and First Master Retailers is about bringing in the best practices around the world and combining it with the conventional retailing business in the country. There is a need to standardize the retailing process across the country. We should have an excellent retailing practice that will benefit all citizens, irrespective of class or creed- To this end we have partnered with Dia Group of Spain, a global retailer with over 8000 stores across the globe to bringproduct, quality and value to our shoppers in Nigeria.

First Master Retailers Limited will be two years in Nigeria and it has taken a lot of planning, investment, training and commitment to get to this stage. This organization is not about opportunism – it is a deliberate approach towards serving communities 100%, by setting up the groundwork, making sure we find the right locations, as well as, having the right people some who we have sent overseas to get the requisite trainingwhile others have benefited from experts we have brought into Nigeria to ensure we get the right competence before we launch.

What can you attribute to the success story of your organization in Nigeria?

Our success is borne out of being able to know clearly what we set out to achieve. The good thing about Nigeria is that one can make money doing almost everything. In essence, you can make a lot of money by having one or two stores as seen in a number of supermarkets in the country that have been around for years. However, we are clear on what it is we want to do and we do not compromise on standards, process, people or values and most importantly, we are not compromising on our set objectives which is to bring to each neighborhood 100% quality products and service. Thismindset drives us towards creating a system where every action is deliberate.
Speaking further on the major thrust of the organization’s vision, we will continue building up people because it is people that make the organization work.

Furthermore, the level of quality equipment of international standard employed has also made the company stand out. This is one fact that the shareholders and investors understood right from the onset that to reach the global standard that we aimed for, we needed to invest upfront. They have been very supportive from the financial standpoint. Though, it has taken longer than we anticipated they have stood by the FMR Management with a clear understandingof why we decided to wait to get it right.

Our strategic partners like Heritage Bank Limited and the others also understood the end-game. Hence, to get it right, there is the need to find the right partnershipthat understands what you want to achieve and are willing to support you to deliver the desired objectives.
Briefly describe your experience in the last few years in this sector as regards running amodern retail outlet, and in particular, the industry, in general vis-à-vis the competition from online retail platforms.

I spent over a decade in global roles with Unilever and on many of my business trips around the world, my visits to the retail trade and the evolution of the sector always fascinated and educated me of the opportunities. There is the misconception on the penetration of supermarkets in Nigeria; people have this perception that supermarket penetration in Nigeria is quite high. However, this perception is far from thereality. It is very low, just about 5% which just about means that only 5% of consumption in Nigeria passes through the modern trade environment. The others go through general trade and open market which have served the larger population well, except that it misses some gaps such as quality standard, the traceability of the products, and some of the conveniences you find in a modern retail environment – the air-conditioning, the cleanliness and of course, it misses the ease of payment made possible with credit card and the likes.

Thus, the other 95% of the spectrum do not benefit from it. Now, modern retail outfits have a choice of sitting in that 5% comfortably or affirm that there is a need to expand the benefits enjoyed by the 5% and push it to 10% and on and on to about 30%, but this will take some years. Interestingly, it goes very quickly once it gets to the tipping point. Kenya, for example is already at about 50%. In Western Europe, it is of courseover 95% at modern trade.

Although, it will not happen overnight or evenly across the country, there can be a push in major cities. We plan to increase the percentage of modern trade outlets and the key is proximity in addition to affordability. We need to get these shops away from the big exclusive shopping centers into the neighborhoods – aneighborhood store that people can trust with affordable prices at all times, not only when there is a promo. We plan to deliver everyday low prices, by delivering everyday low costs which means we have to weed out all the costs in the system and give 100% affordability back to the shoppers in price. This is important because at the end of the day when the economy is beset with high volatility or uncertainty, unemployment, and devaluation of the currency, what the people want is some certainty around their pricing whereby they go into the store and have the confidence to fill their baskets. Not to saunter in the shopping center- buy a piece of meat pie and sort of walk out sheepishly. In such a situation, they walk out because they are afraid to do the shopping, afraid of what it will cost.

In terms of uniqueness and the need to meet your corporate objectives, what else is your organization bringing tothe shopping experience in Nigeria?

We have fashioned our core values with that of Dia Group, a well-established global retail corporation.What we did was to make it more relevant to our peculiar business environment. We also aim at adding value in everything we do. Our operations rest on the pillars of 100% Convenience, Quality, Friendship andSatisfaction. That is, we are trying to make what is already there to work better. Of course we have initiative and efficiency and ensure that everyone we bring onboard is capable of thinking out of the box.
Meanwhile, it is very important to us that we do not just copy. If you look at Citydia or Dia as a brand, we are not trying to do exactly what they are doing globally. We are trying to take what they have with their years of experience and see how we can localize and improve on it. We appreciate teamwork, training, open-door policy, accessibility and the creation of a sense of belonging and ownership amongst the staff. Here, we do not deal in hierarchy.

Getting back to price, often at times product cost includes as much as 5-10% of brand advertising cost which are not particularly value added to the consumer. So imagine if this cost were saved and used for product quality.

We have set out to maintain price stability, deliver quality and value. We do that every day. Our plan is to open over 100 outlets across Nigeria. For us, it is not about making huge profits but creating value, so that people can keep coming to our stores with an assurance that they can get volume from whatever set amount they have put aside to do their shopping- this will yield both loyalty to us and profits over time.

We have our own brands in the store which are about 40% at the moment. These include Dia% (Food, Groceries and Homecare), Bonte’ (Personal Care), Baby Smile (Baby Care) and AS (Pet Care).These products are benchmarked with the best known international brands in the look, feel, ingredients and use. Undoubtedly, we stand out in terms of better value. The reason is that we are spending the money into the product quality. We are bringing efficiency into the supply chain and not spending merely for advertising. This is a competitive advantage.

For example, our ketchup’are of excellent quality & pricewith 80% concentrated tomatoes against some other brands that are diluted. Similarly, we have excellent ice-cream, perhaps one of the widest selections of ice-cream products in Nigeria. We have a tremendous variety at value prices.

What are your future projections in the area of consolidation and expansion in retailing business in the country?

The retail sector in Nigeria will continue to expand much faster than other sectors. This would continue to attract both international and local players as it should. I welcome this expansion as more players will help hasten the conversion to modern trade which cannot be achieved with few players.

FMR Ltd has reached an agreement with the leading online supermarket platform in Nigeria called supermart.ng. There is a Citydia% online store on their site and it can be accessed to buy any of our products. In addition, we have started talking to shoppers online through social media (Facebook, Twitter and Instagram)and the question they keep asking is when willCitydia% come to their neighborhood? This is because the people recognize the value attached to shopping in a familiar environment because they will be attended to by familiar faces and enjoy thecomfort that the proximity brings. As time goes on, we will spread the physical and online platforms.

The potential is huge. One of the most exciting things about this brand is that it has proved to be successful in several countries across the globe.

This was made possible because of the quality. The brand is also resilient to economic volatility. This means that when the economy goes ‘south’ or when there is high volatility in the economy, it strengthens the fortune of our brands. Presently people are now worried about nation’s economic fortune, growth rate and unstable currency. So the tendency is for everyone to be more careful on their spending to save more, make their naira to last a bit longer to do more things.