From the Archive: Flanagans Supermarket Direct
‘From the Archive’ is the regular column that revisits some of the more interesting retail stories covered over the past 30 years by Glynn Davis for a variety of publications.
This period covers many seismic structural changes in the industry including the emergence of the internet. Alongside the actual stories Glynn will be adding commentary around each of the pieces that will seek to put the articles into context with today’s landscape.
From Retail Week (4 July 1997)
Trekking to a modestly-sized warehouse in Wandsworth, South London, in mid-1997 to see the founder of Flanagans Supermarket Direct did not give me the impression that I was witnessing the future of the grocery sector.
Subscribe to TRBHowever, I admired Dominick Scott-Flanagan’s entrepreneurial streak in tackling the thorny issue of delivering groceries to people’s homes. What made his move particularly ballsy was that he had set the business up before having the capabilities of the internet available to him. He was relying on customers either ringing or faxing (remember those machines) their orders by quoting a series of product codes before the goods could then be despatched via a fleet of vans.
But he knew technology was on its way and that it would have a massive impact on grocery shopping. It’s interesting how he described this imminent seismic tech advances at the time: “When two-way interactive digital boxes of tricks come into the front room for £9.99, then there is going to be a revolution and the impact on the high street is going to be phenomenal.”
Those £9.99 boxes turned out to be the internet and he was right about the incoming revolution. Sainsbury’s had also recognised the potential of home delivery and agreed an arrangement whereby it gave Flanagan’s its buying power while the fledgling operation shared data with its larger partner.
It’s interesting that at this early stage Scott-Flanagan was experiencing the same challenges that still face grocery home shopping today. There’s the complexity of dealing with myriad product types that require different temperature controlled storage and the most notably issue is the debate about store picking versus dedicated warehouses.
He questioned the viability of picking goods from within superstores and believed the only way to go was with home shopping warehouses. This is the basis on which Ocado has built its operation and today the argument about whether this is the right way to go is still very much in the air as the major grocers are finding that they can easily handle online volumes within their existing store estates.
With his unique model at the time Scott-Flanagan predicted he could take an increasing share of the growing grocery home shopping market, which Healey & Baker was forecasting could be worth up to £8.5 billion per year. Today the figure is actually £24 billion but sadly Flanagans Supermarket Direct did not manage to get its hands on much of that pie.
It was turning over nearly £6.5 million annually when I visited and there was talk of the opening of a second depot in North London. From my recollection that did not happen and clearly neither did his dream of being a flagship grocery home shopping business akin to First Direct in banking and Direct Line in insurance.
But all credit to Scott-Flanagan, he blazed a trail and was a pioneer in this new field, although he was ultimately defeated by the major grocers opening their own online stores, powered by that wonderful new thing the internet.
