The service station forecourt market is an exciting and unique retail environment and The Corner Bakery – which is located on Engen forecourts across South Africa – recently passed the 400 store mark.
This makes the Durban based business the fourth biggest retail chain in terms of number of stores and one of the biggest local business success stories.
Today, the company sells over one million pies each month and, in addition to the 230 people it employs across its own business, it has created jobs more than 2 000 people through its franchisees.
This is the achievement of which Wayne Duncan, chief executive of Durban based Retsol which owns the brand, is most proud.
Amazingly, when Retsol bought Corner Bakery in 2007, Duncan says it was “a franchise by name only” with no franchisees. It started out in 2010 with no outlets.
In terms of a management agreement with Engen, outlets were to be established on Engen service station forecourts. These would be owned by the Engen franchisees who ran the service stations.
Since then, the number of stores has grown exponentially. The majority of Corner Bakery stores are situated inland with over 60 along the West and East Coast. The first 250 stores were opened during the first two to three years.
Corner Bakery has since ventured beyond South African borders and has 65 stores spread across Botswana, Namibia, Zimbabwe, Mozambique, Zambia, Reunion and Mauritius. Next year, Retsol will add stores in DRC and Gabon and expects to take the total store count across the entire African continent to close to 600.
Corner Bakery’s turnover growth has averaged 20 percent year on year and Duncan is confident that the franchise will continue to register double digit growth for the foreseeable future. “We are growing sales aggressively. So far, growth has been organic. Revenue has come through the existing market as well as product innovation,” he explains.
Corner Bakery has a vertically integrated supply chain and has factories in Cape Town and Durban. A Johannesburg factory is expected to open early next year.
Garry Milne, managing director of Corner Bakery, says that when it comes to the service station forecourt market, a networked solution is important and products need to be standardised. This doesn’t stop at the pie which is the core product though.
The overall product offering can also be tailored to suit the particular market of an individual outlet. In total, Corner Bakery has more than 2 000 menu items and each franchisee can select between 60 and 100. This enables the brand to be both flexible and “one size fits all” he says.
Duncan and Milne agree that the Corner Bakery’s success within the existing South African market can be attributed to the fact that South African consumers across all LSM’s are becoming more sophisticated in their choices.
At the very beginning, pies were the staple product and accounted for between 80 and 90 percent of business. They added coffee through another Retsol subsidiary, the Equatorial Coffee brand, and grew the product offering.
He says that, in the convenience food space, there is a strong correlation between buying food and beverages. To exploit this synergy, Corner Bakery has offered a number of combination coffee and food promotions.
Nevertheless, pies still dominate the menu and together with other fast food items, now account for 50 percent of turnover.
Corner Bakery has also innovated when it comes to pies. Milne says that the Corner Bakery brand has its own dedicated pie that is produced in partnership with the Rhodes Food Group. This is a 210g pie versus the normal 170 / 180g pies that are generally available for the same price and is regarded as a quality product.
Another recent success has been the introduction of Pie Bites – smaller mini pies of between 35 and 50g which are sold in packs of three. Still with the pie category, he says Corner Bakery has introduced the “Big Shot Burger Pie™” which is effectively “the Big Mac” of pies. This has quickly taken its place among the brand’s top five products.