Aussie supermarket’s $50m ‘secret weapon’
One of Australia's best-loved retailers was struggling to survive - until one huge gamble changed its future forever.
It was the early 1990s, and Australia was in the grip of the brutal "recession we had to have".
According to Ritchies chief executive Fred Harrison, the company "really struggled" through the first three years of that decade, recording three straight years of losses.
"We were down to the bones of our backside, and we had one more roll of the dice to get it right," he told news.com.au.
The business took a gamble by introducing the Ritchies Community Benefit Card program - and Mr Harrison said he had "no doubt" that's what finally turned things around.
Under the incredibly popular program, which is still a hit today, shoppers nominate their chosen local school, club or charity, and the supermarket then donates a percentage of their spend towards that cause.
Today, the total amount donated to local organisations through the program is almost $50 million - and Mr Harrison described it as the "secret weapon" helping Ritchies compete with the big players such as Coles and Woolworths.
Ritchies is now Australia's largest independent supermarket chain, owned by a group of private investors including Metcash, the family of chief financial officer Mal Cameron, Mr Harrison and 200 former and current staff members.
It has grown into a billion-dollar retailer, with almost 80 stores across the country - an impressive feat attributed at least partially to that one program.
'SECRET WEAPON' UNLEASHED
Mr Harrison said the company gained a massive surge in sales soon after the introduction of the program's trial.
"We trialled it in our Hastings store, which was one of the worst stores at the time - but local clubs, schools and charities started to cotton on and tell parents to go shop at Ritchies and nominate them," he explained.
"It started to really increase sales, and over two or three years we rolled it out across the entire Ritchies network.
"In the '90s you would go to dinner parties and tell people you worked at Ritchies, and they would say they didn't really shop there because the stores were a bit older and we didn't stand out from the crowd. We had to come up with a concept that was really different, and it has been tremendously successful and our single biggest point of difference."
This year, the program is undergoing an upgrade to move it into the digital age.
It will be shifted onto an app, where shoppers will also receive personalised offers tailored to their own needs and interests.
The huge upgrade coincides with Ritchies' 150th anniversary, which is being celebrated throughout 2020.
"We're one of the original supermarkets in Australia - we've been through recessions, world wars, famines, we've seen it all, and we've been able to maintain our standards, continue to grow and attract a loyal customer base," Mr Harrison said.
"When I talk to people of the street they have no idea we're 150 years old, it blows people away, but it proves we're capable of meeting trials and tribulations head-on and keep fighting on."
TEEN TROLLEY BOY TO CEO
Ritchies has had a long history in this country - and Mr Harrison has been there for 45 years of it.
The 62-year-old's first job was supplying his local store with fresh produce that he grew on his family's property in Victoria from the age of 14, becoming Ritchies' "youngest ever supplier".
When he was 16 he got his first casual job as a trolley boy, earning an estimated $3 an hour.
The "ambitious" teen eventually took on roles managing night crews and stacking shelves after hours and taking on extra work during school holidays.
At the end of his first year at university, where he was studying economics and politics, an assistant manager role came up.
He jumped at the chance and ditched his studies, quickly rising through the ranks. In 1994, the father-of-three was appointed CEO.
Over the years, Mr Harrison has seen huge changes shake up the industry - the transition from manual checkouts to automatic scanners and, more recently, the arrival of self-serve checkouts and even the possibility of stores going "checkout free" in future.
He's also seen the arrival of new players like Aldi, Costco and now Kaufland, and the emergence of new food trends like plant-based and vegan foods, which has "just exploded in the last 12 months" as Aussies become increasingly health conscious.
He said customers were more time poor and were searching for convenience, and as a result there had been a spike in the popularity of healthy, ready-to-heat entire meals.
He said supermarkets were also more competitive than ever before as more players entered the field.
"Australians have never had it as good for supermarket shopping - it's fair to say that before Aldi there was no strong discounter, but Aldi took on that role, and as a consequence all supermarkets became far more price conscious," he said.
"Some pricing on bread and milk over the years has been cheaper than it was 10 to 15 years ago, and what happens is the bar gets raised, and all standards get higher, so I welcome that competition."