Managing a store relocation project

A Marks and Spencer case study

Introduction

This case study describes the relocation in 1994 of the Marks & Spencer store in Kendal. The situation
presented is a relatively unusual example of store development for the company – not just because it
involves relocation, but because it involves the acquisition and refitting of an existing supermarket.
Marks & Spencer is committed to offering its customers high quality products and an efficient service in
attractive and comfortable surroundings - this requires an on-going store development program involving
expansion and modernization. Store development projects not only include the building of new stores on
Greenfield sites, but also modernizing and extending the footage of existing stores, and relocating others
to more appropriate sites. Relocations are rare, however, as the majority of Marks & Spencer stores are
already in prime retail locations.

Getting the planning and co-ordination right

Relocation projects are driven by the desire to improve Marks & Spencer’s profitability, by enhancing
either the convenience of a store’s location or the store environment, to better satisfy customer needs.
When relocating, a considerable amount of time, resources, research, planning and management effort
will be invested. Many individuals and departments within the business will be involved and a number of
external organizations will contribute - all working to achieve the company’s objectives.
The date is January 10th 1994. Marks & Spencer is six-months into the schedule for a store relocation
project in Kendal, Cumbria. In the text below we hear from three key managers closely involved in the
scheme. Paul Mellor is the Kendal Store Manager, Mike Peterson is Technical Coordinator for
Construction Services in the Store Development Group and Katy Bull is Store Planner for the project.
Their comments provide an insight into the reasons for the relocation, how the project is progressing and
the tasks still to be carried out prior to the new store opening.

Why relocate?
Paul explains some of the background to the project.
“Kendal is a busy market town in Cumbria on the south-
eastern edge of the Lake District National Park, which is a
popular tourist area. The town is close to the M6 motorway
and about 25 miles north of Lancaster. The map shows our
current store in Kendal at 18-20 Strickland gate.
It’s a prime location in the High Street, where we are at the
heart of shopping activity and we pick up a lot of passing
trade. However, there are a number of problems with the
site. The selling space, at 9000 sq. ft, is far too small to
exploit the sales potential available in Kendal - the sales
per square foot performances we’re achieving clearly show
we can support a far larger store. The narrow frontage
doesn’t reflect the offer behind the doors, and the long
narrow shape of the store and bottle-neck entrance doesn’t help either when you’re trying to create
exciting merchandising. A worse problem is access to the rear of the store for deliveries - our lorries
struggle to get down the narrow access roads and we pay a substantial rent for access rights across
private land to get to our loading bay.”
“Last August the company decided it really must sort out the Kendal situation once and for all and
relocation became the only real option. In 1993, I heard Fine-Food were under pressure from local
competition and our acquisitions people in the Estates Department started seriously considering this site
as an option. It is an unusual relocation choice, because we are effectively vacating a prime High Street
site for a site that is off-pitch in terms of passing footfall and has to attract customers in its own right.”
“However, the site does have a number of significant advantages. For a start, it is the ideal footage we
want, with the sales area all on one floor in a very workable footprint - which should lead to a significantly
increased turnover but with proportionately less staff and management. The new site has a large car park
(160 spaces, although 70 of these are underground) which is ideal for food shoppers. Access for
deliveries is excellent, with a dedicated entrance and purpose-built underground delivery area.”

Project management

Mike explains his role in the project. “Because the Kendal scheme is relatively small, I have been
delegated much of the project management responsibility on the construction side. My job is to ensure all
the necessary building and fitting-out work is completed on time, within the costs that have been agreed
and to the right specification.”
Katy explains her role as Store Planner for the project. “ We focus on ensuring new stores are designed
in a way that meets the commercial requirements of the business, maximize sales in an attractive store
environment and ensure stores are operationally efficient to minimize costs. I liaise with all departments
that have an interest in the design, building and operation of the store. I must ensure that the final layout
meets the needs of the Store Manager, Divisional Management and also the Buying Groups - they are my
clients. My brief therefore covers a range of layout and design issues – looking at the way stock is moved
around the store, positioning walkways to facilitate customer movement around the store, positioning
fixtures such as food counters, fridges, tills and displays and deciding the width of gangways.”
“ I will also get involved later in the project to plan the loose merchandising equipment (racks etc.). We
need to know what we’re doing on these things about 12 weeks before opening, because it can take so
long sometimes to order some of the equipment.”

Research

Paul explains, “In the case of Kendal, the whole process really got
underway once the Estates Department had kicked off serious
interest in the Fine-Food site on 9th August 1993. I was involved
from the beginning when we were doing the feasibility research,
arguing vigorously in favor of the resite. A lot of research went into
estimating the turnover and a host of factors were considered –
existing sales performances, the proposed selling space available,
the local customer profile, the size of the catchment population, local
competition and so on. ”
Mike has been closely involved in the planning activities at Head Office and he picks up the story. “At the
start of September we then went through to the preparatory planning stage, during which the scheme was
subjected to progressively more and more detailed examination and had to pass through a series of
Project Boards before it could gain approval to proceed to the Capital Evaluation Committee (CEC) in
early November. The preparatory planning stage started with probably a month’s work by a skeleton
design team drawing up a broad outline of the proposed scheme. Once this had been agreed by the
Project Board, we then studied the scheme in detail.
Our Architects, Corporate Designers and Store Planner produced detailed plans and layouts, even down
to walkways and the location and size of the main sales departments. We needed detailed layouts at this
stage because of the implications for costs and plant requirements. Once the final Project Board was
happy with these we could then go to the CEC for approval for the funds and the go-ahead.”
“After the initial feasibility research in August, we went into
negotiations with Fine-Food and we had to do the background
planning in strict confidence. We had to be careful not to spark off
any rumors of our interest in the site, which might upset the
existing Fine-Food staff, until everything had been settled.”
“The project was approved by the Capital Evaluation Committee
within a couple of weeks. All the research showed the Kendal
scheme would achieve the required returns, so the Directors
gave us the okay on the expenditure without a problem. As soon
as we had approval we went to tender on the design and build contract for the store.”
Paul Mellor has also been involved throughout the planning process. “I’m making sure that I have an input
on the internal design of the store, because of my commercial management interest. The sales floor plan
is mainly developed by Store Planning, who work to a successful design formula. Throughout the
preparatory planning stages, I fed in my views on the location and sizes of departments and on the
positioning of customer service desks, tills, telephones and so on. I also want a canopy over the entrance
- it rains so much in Kendal I can see staff getting very wet whilst they open with their bags to get through
the card swipe.”

Planning

Mike explains how the building work is likely to develop over the next few weeks and the current position
on planning approvals. “The building contractor will have access to the site from 14th February and within
a fortnight there will be scenes of organized chaos, peppered with hoardings, huts and hard hats. The
building contractor will spend two weeks or so preparing the site and then two weeks stripping the
building and putting in the new roof insulation. Then work can begin in earnest on the installation of new
sprinkler, electrical and mechanical services and the new lift.”
“It takes time to get all the necessary permissions, because some of the process requires statutory public
notice periods to see if anyone has any objections. The main things we’re seeking approval for are
changes to the elevations and shop-front (moving from a 60’s Swiss chalet-look to a 90’s rustic-look, and
relocating the entrances), new directional signs on Library Road and new signs on the front of the store
and of course we’ll need building regulations approval.”

The Building and Fitting-Out Process

“The main objective for the building contractor will be to open as soon as possible. We’ll confirm the exact
opening dates once we’ve been on site a few weeks and we’ll have progress meetings every 4 weeks
anyway to make sure things are going to plan.”
“We’ve got to fit-out three levels of the building (see diagram above) – the lower ground floor
(underground car park, stockroom, refrigeration plant area and goods reception area), the ground floor
(sales area, food hall and backstage areas including the cold room) and the mezzanine floor (kitchen,
toilets, offices and EPOS room).”
“The ground floor fit-out will take place in three stages. It will take a week to install the high-level
electrical, mechanical and sprinkler services above the sales floor and food hall and fix up the ceiling grid
ready for the ceiling tiles to be added later. The CCTV equipment will be installed as soon as the
electrical work is finished. After that we can start putting in some of the Marks & Spencer design features
like perimeter paneling, trims, skirting, coving, cornice and isometric lighting, which will take 5 weeks.
Once these are sorted, we can get the vinyl flooring down in the food hall, the carpets down on the rest of
the sales floor, drop the ceiling tiles into place and put the doors on. We can then install the equipment -
for the fitting rooms, the Marks & Spencer Financial Services desk area, the Customer Service Desk, the
wall and mid-flooring merchandising equipment, food cases and shelving, till podia, tills and phones. This
flooring and equipment stage will take about 5 weeks. The lobby area and the automatic doors on the
shop-front will be left quite late so we can get some of the larger equipment (particularly the refrigeration
plant) into the store more easily. The sales floor needs to be handed over to the Store Manager two
weeks before opening, to give staff enough time for dressing.”
“Backstage we need to get the cold room fully operational and down to the correct temperature in time for
handover four weeks before opening.”
“On the mezzanine floor we need to fit out staff quarters. We’ll need 7 weeks to sort the basic services
and joinery for the offices, kitchen and toilets and then probably 4 weeks to decorate, put the vinyl flooring
and carpets down, do the final clean and take in the office furniture and kitchen equipment. We should be
ready to hand over the staff quarters 3 weeks before the opening.”
“On the lower ground floor we’ve got some general improvement works in the car parking area and
preparation of the stockroom and goods reception areas (including upgrading the dock-leveller/hoist and
shutters), which will probably take 9 weeks.”
“In addition to all the fitting-out work, we’ve also got to get all the major equipment commissioned, of
course, which means checking and testing the sprinklers, air conditioning, refrigeration plant, alarms and
so on, to ensure everything works the way it should. All the IT gear will be dry-run and various tests done
to make sure you can communicate and that the data checks out and all the tills will be tested once
they’re hooked up. Then there’s the outside of the building - trolley corals, minor improvements to the
layout of the car park and new white lining and signs.”
Objectives

Paul is not sure yet when his new store might open. “In
the early days of considering the Fine-Food site, I
favored Easter for the opening or certainly no later
than the spring bank holiday at the end of May, all of
which are classic times to open – particularly Easter
because not only is it a peak in itself, but it is also a
good opportunity then to hit the kind of merchandise
which sells well between Easter and Summer. The
later you leave it, the fewer windows you have.
Similarly if you open in the autumn, you are set
through to Christmas. The other issue with opening
dates, however, is that, while we want to open as soon as possible from a commercial trading point of
view, the last thing we want to do is rush it and risk things going wrong.”
Paul explains his role and objectives in the project. “Apart from my input on the layout of the store, my
role will really come to the fore in the last 10 or 12 weeks before opening. Once we get underway my
objective will be to close the old store down successfully, as well as to open the new store, with minimal
disruption to trade or damage to the image of Marks & Spencer in Kendal. I’ll want to close the old store
at the normal time on the chosen Saturday and open the new store on the following Monday morning.”
According to Mike, “I’ll want to keep in contact with the building contractor’s Site Manager, to keep tabs
on how things are going and to learn as much as possible about what is going into my new store. I can
also then keep my staff up-to-date on progress - it’s important to build your staff up to the big opening
day. I will also need to keep in close contact with our Head Office managers responsible for IT systems,
buying, transport and corporate affairs, who will get more and more involved in the project as we get
nearer to opening. I’ll also have to maintain close and cordial relationships with various local authorities,
organizations and groups, partly to promote the scheme and keep them informed of progress, but also to
make sure we’re meeting the needs of the local community.”
“I’ll need to get involved in planning the promotional activities to publicize and support the opening. Our
Corporate Affairs Group organizes most of the promotions work for the opening of a new store, but we
can influence the type of campaign and feed in our knowledge of the best local press and media to use.
We’ve got an excellent local commercial radio station ‘The Bay’, which covers our catchment area, so we
will definitely use that and we’ll look at the local papers, posters and other media possibilities with Head
Office. As soon as we’ve confirmed the definite opening date we can lock into the promotions schedule
which will focus on the critical four weeks before launch day.”

Conclusion

The store relocation at Kendal had a positive impact upon Kendal as a town. No trade was lost and the
dressing of the store was managed without disruption. A year after the opening of the new store there has
been considerable investment in the town’s retail provision, with new retail developments close to the
Marks & Spencer site. The new store helped to provide this change of focus for the town.