Yahoo Finance How the first 'outsider' CEO is faring at Booths, the 170-year-old family-run supermarket
Together with the way they pronounce the words “grass” or “bath”, recognition of the supermarket Booths is a good tell-tale sign as to whether someone hails from the North or South of the country.
That’s partly because the so-called “Waitrose of the North” hasn’t opened a single store down South throughout its 170-year-old history.
Not that Edwin Booth, of the fifth generation of the founding family and chairman of the chain, likes the Waitrose reference: “I think it’s bloody cheeky. We don’t need to use their name to raise our game,” he says. For those in the North West, Booths is a highly revered, upmarket food chain that causes a great deal of excitement and sentimentality. But down South, the name is met with blank faces.
Despite Mr Booth’s protestations, as associations go, Waitrose is not a bad one as it highlights the chain’s reputation for quality food products although arguably Booths’ 28 shops rely more heavily on local produce, such as its Herdwick meat, Grimsby smoked haddock, Cumberland rum and Lancashire crisps from a farm near Ormskirk. “Farmers are our customers, not just our suppliers,” Mr Booth says proudly.
Booths remains 96pc owned by a gaggle of family shareholders while the rest is owned by employees. However, the family chain broke with tradition two years ago by appointing Chris Dee as the first outsider to run the business as chief executive.
While Mr Booth’s ascension to chairman came after a brief phone call from his father announcing that he wanted to retire the following week, Mr Dee’s initial interview process was slightly more unique.
“I had always been frustrated with our hiring policy,” Mr Booth explains, “It always focused on, firstly, are they family, do they like walking in the Lakes, do they fish? And if you were a good chap, you were on board. I thought we needed to have a bit more of a proper test.”
As a result of Mr Booth’s respect for corporate governance, Mr Dee – who’d just sold his small off-licence chain to Oddbins – was set the test of identifying 12 different unlabelled wines and being asked to identify the grape, region and price point. Twenty years on from joining Booths as a wine and spirit buyer, Mr Dee now sets the same test for his recruits. Together, the two men are hoping to re-energise Booths to ensure it isn’t stuck in the past.
Despite being a Booths employee for 22 years, Mr Dee is aware of his slightly uncomfortable position as an “outsider”. “All the customers and all the workers in the shop want ‘Mister Booth’, they don’t want some anonymous chief executive,” he says humbly. “And I think that’s really important for a family business. When I sold my business, it was not my intention to join Booths and be here for so long. But 22 years later, I’m passionate about retail, I’m a Northerner, I want to live here and I think I’m as passionate and engaged as any Booth. It’s not just them and us.”
Mr Booth butts in with the frank admission that it hasn’t been plain sailing. “It’s been a challenging relationship between Chris and the family, they’ve challenged each other a great deal.” Mr Dee quickly adds: “It’s probably made me feel more like family, because we have a bond and we challenge each other on a daily basis.”
The rapid-fire interchange between the two men shows a great level of familiarity, but it is often Mr Booth finishing and starting the sentences.
“There was a slight tinge of family parochialism within the business and when I took over I wanted to bring the company into the 20th century, just in time for the 21st,” Mr Booth says about taking the reins in 1992.
“A lot of the old guard would say: “You can’t do this or that.” But the business could have quite easily melted down. As a member of the fifth generation we looked to re-energise the brand and the business and become known as a retailer, not just a company with nice properties.”
However, despite Booths’ loyal band of customers, which includes Prince Charles, the retailer has been hurt by the supermarket giants slashing their prices in a race to the bottom with Aldi and Lidl. Last year’s accounts showed that Booths tumbled into the red as the heavy discounting of its rivals “kept the lid on the potential for sales growth”. Mr Dee warns this year is not expected to be much better despite a record Christmas during which there was a 30pc jump in artisan gin sales and a 125pc surge in salmon.
“It’s been a tough year – we had a great Christmas, a good January but a difficult February so we’re not calling for great results,” the pragmatic Booths boss says.
Booths hasn’t just had to battle its rivals – it has also had to batten down the hatches after dealing with the aftermath of Storm Desmond which left one of its most profitable shops in the Lake District three feet under water just before Christmas in 2015.
The cost of repairs and the dent to that year’s festive earnings, combined with the uncertain outlook for the retail sector, has prompted Booths to hit a pause on its capital expenditure plan for further shops although it isn’t rowing back on its growth ambitions.
Later this month Booths will launch its gifting service – an extension of its successful Christmas hamper business – meaning that customers across the country will be able to get deliveries of select items. “Our intention is to only have stores in the North, we are a Northern chain,” Mr Dee says. “But taking the best bits of our brand and making that available to everyone nationally has a lot of upside.”
The Booths boss reveals the food chain has already struck its first international deal to sell products in almost 20 shops in Malaysia. The appeal for the international crowd is obvious, particularly in Asia where there is an acute fondness for old heritage brands.
“They like that there are people called Booth who love what they sell. It’s the story, the heritage that gives people over their a great deal of reassurance, particularly when it comes to food. Our brand almost by default is very attractive over there,” Mr Booth says with a smile.
Despite the international roll-out, the duo quickly dismiss the idea that Booths might open more stores further afield. “We haven’t sought to put real estate down in the South because of logistics, we run our business in such a way that we’re not looking for outside investment or private equity finance. We’re self-funding when all is said and done,” says Mr Dee.
However, the company is watching Morrisons recent wholesale deal with Amazon Fresh with keen interest. So far Amazon Fresh is only located in London, Surrey and parts of Hampshire but it also counts small local producers like Konditor & Cook and Gail’s Artisan Bakery on its network. Booths would fit neatly into the service if it was rolled out further.
“We would happily cooperate with other people of that nature – we’re keen to get Booths product into people’s homes,” says Mr Booth.
