There is enormous potential in retail
Nigeria’s population, estimated to be about 200 million, offers local and international investors a huge market for different types of businesses. One particular area where the size of the population serves as an attraction provide tremendous opportunity
SUNDRY FOODS WAS INCORPORATED in 2003 but we did not fully begin operation until the end of 2004. That would make Sundry Foods 14 years this year, since we opened our doors as a going concern. Sundry Markets is a much newer business; we started trading in 2015 and that makes it three years old.
You operate both Sundry Foods and Sundry Markets out of Port Harcourt with, I believe, a pan-Nigerian ambition as you already have your footprint in some other cities, apart from Port Harcourt. Could you share with us how long you have been in operation and managing both businesses?
SUNDRY FOODS WAS INCORPORATED in 2003 but we did not fully begin operation until the end of 2004. That would make Sundry Foods 14 years this year, since we opened our doors as a going concern. Sundry Markets is a much newer business; we started trading in 2015 and that makes it three years old.
The name Sundry Markets has a tendency to create two meanings in the minds of the public; one is that it is just a name and the other is that there’s a place called Sundry and that it has markets. So, when you talk about Sundry Markets, what meaning are you trying to convey?
Well, Sundry Foods is, firstly, a predecessor company of Sundry Markets. Sundry Foods owns and operates the Kilimanjaro fast-food restaurants across the country; Nibbles Bakery and SFS Catering businesses. These are our primary brands, and they represent our identity in the restaurant, bakery and industrial catering business. Sundry Markets, on the other hand, owns Marketsquare, which is our supermarket business.
The Marketsquare concept has the power to also create pictures in the minds of people. How did you come about the concept?
The concept is not new. What Marketsquare does is referred to as modern retail, or what markets look like now all over the world, especially in the developed countries. Nigeria has been a bit behind in developing our markets. So, when you look at Mile One Market in Port Harcourt, or other open markets in Nigeria, you still see them the way they were many decades ago. Over the centuries, most countries actually evolved from having similar markets – that is open markets – like you have them today in most of our markets in Nigeria. But today, these countries have developed their markets into retail supermarkets – covered markets – what you see in our Marketsquare. It is a covered market; a neater environment with products better lined out and laid out in a more organised manner. The environment is cool. You can walk in and easily find what you want to buy. It’s a more pleasant shopping experience and if we’ve done our job right, you can even get our products at comparable prices – either they are cheaper or they are at the same prices as you find in open markets. That’s what Marketsquare really does.
We have noticed that Marketsquare has been expanding, which means it has been making investments with the setting up of more branches, since the first one opened in Yenagoa in 2015. This represents confidence in the economy at such time when funding of new businesses is a challenge. How have you dealt with funding challenge?
The expansion you see is a consequence of a wellthought-out business plan – an outcome of good research coupled with good planning. Before we started with our business, we did our research and found out that there was a huge gap in the Marketsquare type of modern markets in Nigeria. Nigeria, like I said earlier, has been a bit behind on the curve in developing her markets. A lot of our other industries are pretty up-to-date with the trends all over the world. Look at our building and construction industry – the type of houses we build in Nigeria today, they are not so different from what you find anywhere in the world. If you look at our telecoms industry – we’re using 4G telephone handsets – just the same with what you find in the developed countries. In fact, I don’t know whether we’re not already using 5G phones in Nigeria. We’re almost right there with the rest of the world. If you look at our computing and internet industry – similarly, we’re able to produce and use software that can compete anywhere in the world. So, a lot of things have developed in the country. But for the markets – our markets haven’t developed to such a global level as these other sectors. So, it was obvious to us that if we were to roll out a modern market place – if we’ve done it right, we would be successful.
The other question you would ask is what is the size of the market? What do we need to do to cover the ground? To be honest with you, the research we carried out in 20132014 provided information that was very daunting. The market size, when we did the research suggested a market that was several trillions of naira large – it required several hundreds of stores scattered every city around the country to really cover the bases. So, we decided to pursue as much of the market as we humanly can, given our resources that we could muster. We went out there to source for finance to build a market space with the capital that we were able to raise. That’s what we’re doing – we’re deploying capital that we raised. We did our business plan properly. We are building a retail business that is similar to what is available anywhere in the world.
When you talk about Nigeria’s market size being huge, compared to what would be required to fill the gap, can you be specific – what is the size?
Well, the data that we had back in 2013-2014 suggested that the market was about $5 billion in size – if you convert that to naira, you would have trillions of naira. That market was growing at 15 percent per annum. Today, that market size is probably three times larger, and still counting. Of course, you know that since then (2013-2014) a lot has happened – the currency has been devalued, – the economy has grown a bit in size in naira sense – also, the dollar has appreciated much in value. So, the worth of the market size is probably bigger than the $5 billion our research provided back then. But that was what we saw. One of our competitors even suggested that the market could take 500 stores of our Marketsquare size, in the country to be able to cover the huge market opportunity in Nigeria. So, if you look at those numbers – the market size, the number of stores required – you would agree with me that one would require billions of naira to bridge the gap.
How much does it cost to build one of your Marketsquare stores?
Do you mean to build one of our Market Square stores? I can tell you, it costs a few million dollars. I couldn’t be more specific than that, for now. But let me say that it is really a capital-intensive business – very, very capital intensive. For us, we were able to muster capital from our financiers.
Considering that it is capital intensive and considering the Nigerian business environment in Nigeria, what
is your bottom-line like? What are the sorts of profit margins that have attracted you to invest in it?
Like I have said, we did our business plan before we began. We were convinced that it was a viable business. And we deployed the capital that we raised. It’s a viable business. The capital we are talking about is nothing compared to the one, say MTN, Glo and other telecoms providers have deployed to provide telephony in the country. It’s nothing compared to the money Nigerian banks have deployed to provide banking branches across the length and breadth of the country, and even outside the country. But these are all viable businesses. Whatever scale of business you engage in, whatever capital you deploy, as far as the market is big enough, you can make your profit, so long as you know what you are doing.
Do you hear such comments as that your Marketsquare brand of stores and their locations are elitist, especially considering the population that lives in the areas where the stores are sited? Would this be correct and is it deliberate?
I would say it amounts to inferiority complex for anyone to think that our Marketsquare stores are elitist. What we have done is to build the best quality of buildings, and put in the best quality products there. We then put in the best calibre of people we can find to run them. So, what happens is that people go in there to pick items they need and that they can find there and they are attended to by well-trained staff, who treat customers with utmost care and respect. There’s nothing in that Marketsquare store that says it’s for the rich only. There is no sign on the building that says so too. When you walk in there you’ll find a tin of milk of good quality; and probably at the same price or cheaper than what you might get it for in the open market. If you want to buy, say just a tablet of Lux soap, you would be sold just that. We haven’t told people that our products are only for the rich. So, it is just a mindset. It’s just in the head of whoever thinks we attend to high class people. Marketsquare is for everybody. We encourage everybody to come in and shop.
You run fast-food restaurants, undertake baking, engage in catering and events management; and now you are operating a retail shopping business. How do you combine these successfully?
The short answer to that is planning – taking time to do research, taking time to deploy our services at right quality, right size, right quantity, and using the right kind of people who know how to approach people – our clients and customers. The other important factor that ensures that we’re successful is the kind of people we hire. We’re very careful in selecting people to run our businesses and provide the services we provide. We’re looking for the best people we can find – people who understand our kind of business, who have passion for what we do. People who we can develop into being able to deliver quality service all the way. You know, if you have passion for what you’re doing, you would always do it differently to produce good results and people would appreciate your services.
Then again, systems are key. Oftentimes, we try to benchmark our system and processes to best systems operating anywhere in the world. We ensure compliance to the best practices in everything that we do. For instance, we put in place a system that says, this is the way you cut chicken; this is the way you preserve it – in a particular refrigerator; this is the way you fry the chicken, using a particular temperature, so that when it comes out it stays at a particular kind of storage system with a particular kind of temperature; this is the number of hours it must stay; this is the way to serve it – using a particular type of plate and particular ingredients that suits particular sets of people; this is the type of position you should serve it. And we document all of these – and keep records.
Another thing we do is to determine the right quality of products to serve our customers so that he/she is perfectly satisfied. And nothing untoward to that, that makes us successful.
The market size, when we did the research, was several trillions of naira large – it required several hundreds of stores scattered all over the country to really cover the bases
The current economic downturn has brought huge challenges on every sector of the economy. To what extent is your business affected and how have you been coping?
Every business is challenging. But it would depend on one’s managerial ability, coupled with the calibre of people you have to man operations. Understanding what the challenges are and coming up with measures to overcome the challenges are what make you a manager. That’s why we’re called managers. In fact, I tell my managers we’re here to solve problems. Any time issues are brought up to you, you don’t need to buckle under. You have to proffer solutions. That’s what we’ve been doing over the years.
But, I think we’re blessed to be in an industry that still gets patronage – it’s a people-oriented service area. People are still patronising us despite the economic situation.
How would you describe your USP – unique selling point, considering that there are so many competitors in your industry? What stands you out from others?
I would say it is our service. If you look at our environment, if you look at our outlets, they are built and arranged in a unique way that speaks of our preference for quality service, using quality people. You would see that we’re not constrained by our environment. We’re not saying, because we’re in Nigeria, then we do things anyhow. No! We ensure that Nigerians too have a right to quality service, like what you would get anywhere in the world. We actually benchmark ourselves to the best organisations in our industry in the world. So, our processes and standards are not anything lower than the likes of McDonald’s. There’s quality about everything we’re doing. We’re passionate about anything we’re doing; that it meets the best practices elsewhere in the world. If you put all of that together, coupled with the quality of our people, these stand us out. For instance, if you look at our buildings – they way they look – the style in which they were built – quality is behind all that. The kind of people we hire, I say again, marks us out and we have all calibres of people. We have people who are graduates, we have those who are just coming out of secondary school; who come in, and we train them to suit our services. Even if they don’t have the particular training before entering, but are willing to be trained by us, we engage them. Some even come in, we train them, they work with us up to a point when they get admission into university, we allow them go, and after their programme they can come back and work with us. Some have done that. I would also say that 95 percent of our success today lies heavily on the contributions by our people – our staff. Our people (staff ) are our best asset. They’re passionate, caring and always give customers a touch of quality and best practice.
Some say that food business is quite challenging, not only in Nigeria, but everywhere in the world. More so, our situation can be peculiar – power hiccups, harsh operating environment, coupled with ‘tax touts’ all over the place, harassing business people. How do you handle this peculiarity?
I don’t think there’s anything anyone can do that’s not challenging. Even musicians have their own challenges. Some people see them and tend to conclude that they are living the good life; but it’s not so. They do have their own challenges. The way to it is understanding what the challenges are and then putting in mitigations in place; how to provide the right colour for the particular occasion.
What have been your own peculiar challenges?
Getting the product quality right, ensuring the raw materials arrived at the right time, at the right place, at any point in time; poor quality supplied by some raw materials suppliers; over-bloating of prices; transportation stress. So, controlling your products supply quality has been quite challenging to us. Of course, there is the constant harassment from government revenue agents, who often harass most business people. The power (electricity) supply hiccups in the country is there, too. We have to ensure that our power generating sets are up and working – never failing at any time. Otherwise, you’ll be in deep trouble. Then, of course, the other one is managing people to get the best out of them.
Many have observed that there is high staff turnover in the catering and hospitality business, which include yours. How have you been able to manage this?
Yes, I agree with the observation that there is high turnover of workers in the catering and hospitality business. But for us, our key goal is staff retention. We’ve put in systems that encourage staff to stay. Because, when a staff goes away from your company, he or she goes with knowledge acquired over the years. We train our staff over time.
What is the level of business offerings by Sundry Foods and Sundry Markets today?
Today, we have 30 Kilimanjaro Restaurants across the country, 2 Nibbles Bread bakeries, 6 Marketsquare stores, and 10 catering contracts – so we have over 50 customer touch-points. Then, there are 15 new locations under construction.
How do you get your raw materials? Do you import or you source locally?
More than 95 percent is sourced locally. And then we also adapt some operations – for instance, we used to use imported rice – today we use Nigeria grown rice.
Let’s get up and close. Who is Ebele Enunwa?
I obtained a BSc in Accounting from University of Ilorin. I also have a MMH (Masters of Management in Hospitality Degree) from Cornell University, USA. I’m also a chartered accountant - a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN). I worked in the banking industry for many years. I headed Stanbic IBTC’s regional office in Port Harcourt covering the bank’s business in the South-South and South-East region of the country before venturing into entrepreneurship.