Survival of the fittest

Revital pins hopes on a post-Brexit rally for the economy and retailing.

Brexit uncertainty, rising costs and falling footfall have put Revital’s expansion plans on hold.

Over the last 12 months, CEO Rahil Vora expected to open new stores and reinvent Revital’s look and feel.

While the latter programme continues, along with online sales growing around 100% in 12 months, the plan to open new stores has been put on hold.

Hopes that the Chancellor would reform business rates for companies of Revital’s ilk have not materialised – the reduction announced in the budget does not apply to store chains – the living wage and rents are rising and consumer confidence is stalling due largely to Brexit uncertainty.

“Business has got tighter for us in the past year as it has for most big retailers,” says Vora. “Some retail chains are closing stores in response and we are not exempt from these pressures.”

Yet in that time Revital has opened four new stores, although for the next six months at least the business will focus on transforming the Revital image and expanding online sales.

Declining footfall

“One of our stores in a shopping centre has seen footfall decline more than 16%,” he says. “Results like that make it difficult to survive, but as a group, survive we will.

“If only 10-20% of our sales are online, and the remaining 80% of our business is declining by 3.5%, we are forced to refocus our efforts. We will know more about where the retail sector is going post-Brexit and whether consumer confidence will recover. It wouldn’t be wise to look at new sites until then.”

Vora believes retailers with two or more stores should not be afraid to consolidate in difficult times, for example closing loss-making branches, while expanding their online offering. Revital launched its website nine years ago and has rebranded several times since then, going ‘transactional’ in 2011. Regular improvements since then have paid off and the online sales graph took a dramatic upward trend following the BGF investment.

Bucking the trend

Meanwhile, Revital is steadily adapting to new consumer expectations in health food, such as the growth in veganism and free-from. Vora points to the Wimbledon store as an example where a transformation in layout and image is bucking the trend in footfall. “We have to get the model right before we open any more stores,” he adds.

The Wimbledon experiment has seen a simplifying of the image to feel less like a traditional health food store. Exposed ceilings and brick walls and modern flooring make it inviting, uncluttered and easy to navigate.

“One of the most confusing things in health food stores, with so many products, is that it’s usually difficult to navigate and find what you want,” says Vora. “The product offering is changed monthly – we keep up with trends and consumer demands and refresh the catalogue.

“There are lots of events, samplings, tastings and so on. With the state of the high street today it is important to keep the theatre going.” As with all of Revital’s stores, the staff are regularly trained and well qualified.

The plastics issue

Another aspect under careful consideration is the use of plastic packaging. Vora was challenged by a customer complaint about plastic packaging and the ethics of a health store, and is giving the issue priority.

“We need innovation in the supply chain and we want to work with our suppliers to meet consumer expectations,” he says. “This trend is not going away and we have to address it. However, how do you keep produce fresh without plastic? More expensive glass? Tin? No packaging at all?

“It could damage some suppliers’ businesses and harm ours, but we have to be conscious of it and strive to innovate.”