Cash and Barry

The Friday Interview:Sometimes opportunities are so obvious that you can miss them, says Jim Barry, chief executive of Mallow-based Barry Group. He's talking about Christmas hampers, and you'd have to agree that there are few things more obvious at this time of year, writes Barry O'Halloran.

The combined wholesaler and retail franchise business has been gearing up for what would normally be a busy time of year in any event. But last year, Barry decided that the group should take on Christmas hampers - in addition to supplying more than 220 retail affiliates and a large number of other clients in 25 counties.

When Barry Group dipped its toe in the hampers water in 2006, it got a good response. It's preparing for a bigger plunge this time round and, from the way Barry is talking, it won't be long before the group moves out of the shallow end altogether.

"It was an obvious thing," he says. "But I realised that, compared to what was already out there, we could give a far better deal in terms of both value and quality. We'll do about 12,000 hampers this year."

Getting bigger is clearly something on which Barry is focused.

The group runs the Costcutter and Quick Pick retail franchises, as well as operating a large-scale independent wholesaling business from its base on the southern side of the north Cork town, close to Dromahane.

And it has been getting bigger. Delegates at the group's recent annual conference in Athlone heard that sales were up 11 per cent to €632 million in the 12 months to January 31st last.

Barry says the group is on target to add 36 new stores to its Costcutter chain this year, and has plans to add a similar number in 2008.

About a year ago, it bought the Kilkenny Cash & Carry business, and has integrated that into the Mallow operation. Barry says he hopes to make one or two similar-sized acquisitions in 2008. Alongside all of this, the wholesale operation had sales of €190 million and profits of €1.45 million last year.

Against this background, the Christmas hampers are a niche activity, but they illustrate something about the way the company does business.

"I'm always looking out for ways of expanding and for synergies," Barry says.

The hampers were feasible because the group is already buying the stock, and has supply and distribution systems in place. With much of the costs covered, it made sense to try it.

Barry Group operates from a modern warehouse and office complex tucked neatly off the Mallow-Cork road, which is also the first leg on the Cork-Dublin route. Its chief executive points out that the business sits at a hub that gives it easy access to most of Munster and Leinster.

On top of this, it has trucks based in Tuam and Dublin, allowing it to cover the rest of the country and connect with suppliers. Its retailers have a strong presence as far away as Donegal, and Barry says he can take an order for Carndonagh one day and have it delivered by 9am the following morning.

Jim Barry's father, James, founded the group in 1955 in Banteer as a fruit and vegetable delivery business. He moved it to Mallow in the 1960s and grew it with the takeover of the KB Williams mill, before expanding into cash and carry in the 1970s.

His son, Jim Barry, joined on leaving school at 18. He had worked there during holidays and decided that the family business was where he wanted to be. Ten years ago, he felt that the time was ripe to move into the symbol business, so Barry Group developed the Quick Pick franchise. This is aimed at convenience stores of various sizes and several versions of the franchise have been tailored to suit different types of outlet.

Shortly afterwards, the international Costcutter brand became available. Recognising that this would suit many of the large, independent supermarkets with which the business was dealing, Barry moved to take it over from its old Irish operator, Vantage.

While Costcutter outlets are spread across the State, Quick Pick has more of a bias towards Munster. However, it is not exclusively limited to the province, and Barry is confident that it can build its geographic spread.

The group recruits new franchisees in several ways. One obvious way is via new residential or mixed developments that include space for a convenience store; another is through an existing business relationship.

Sometimes franchisees move from one symbol to another, although Barry says this can work to the group's advantage. While the company expects to lose one or two outlets in a given year, it recruits more and the gains far outstrip the losses.

Barry says his main concern is running a good after-sales and follow-up service. The group has a dedicated team managing this from Mallow as well as staff on the road.

Barry also places a big emphasis on boosting the franchisees' turnover. "We have increased our retailers' turnover by as much as 80 per cent to 150 per cent," he says.

At least part of this he puts down to category management, which involves putting the right product ranges on the shelves in the right way, and in the right stores.

However, Barry stresses that category management is not merchandising, which he argues often serves to boost one product at the expense of another. Instead, the group uses an independent system that is geared at maximising sales of as many competing products as possible.

At the Mallow headquarters, staff are organised in teams to run the company's various elements. The group provides common purchasing and billing for its franchisees, as well as sales and logistics operations.

Barry himself is a believer in training, and staff regularly attend courses. However, he says companies waste a lot of money on training because they forget one crucial element - follow up.

"We go to people after they've done the course and ask, 'what are you doing differently?', and we find out what they're doing to implement what they've learned," he says.

"We learned the hard way that if you don't follow up, you will end up wasting the money you spend on training."

The Mallow site has plenty of scope for expansion, and Barry clearly has ambitions to make use of this. He's under no illusions that next year could be tough, particularly in a business like his, which operates on tight margins.

But he says this could also present opportunities, as other wholesalers who are finding it hard-going could be prepared to sell up.

"We have the right people to grow the business. We just have to keep looking out for the opportunities."