Kate Bull: retail revolutionary?

Sensemaking / Kate Bull: retail revolutionary?

Determined. Opinionated. Single-minded. Sue Wheat meets the CEO of The People's Supermarket.

13 Aug 2012

Determined. Opinionated. Single-minded. Sue Wheat meets the CEO of The People's Supermarket.

Kate Bull is aptly named. She is, in the nicest possible way – bullish: determined, opinionated and single-minded. Which, when you're challenging the status quo of one of the largest industries in the country, is undoubtedly the best way to be.

After a career in conventional retail, including spells at Marks and Spencer and running her own consultancy, Bull was determined to do things differently. In early 2010, she hooked up with two sympathisers, celebrity eco-chef Arthur Potts Dawson and regeneration specialist David Barrie, and The People's Supermarket [TPS] was born.

Her retail savvy shows in TPS's choice of site. It sits in London's smartly bohemian Lamb's Conduit Street, well placed to draw passing trade from Great Ormond Street hospital staff, lawyers from nearby Chancery Lane and Gray's Inn, lunchtime shoppers exploring the various vintage shops and wine bars, and the area's large student population.

I meet her in the basement lounge-office surrounded by sample products, papers and stock. Bull sports her branded TPS yellow t-shirt and offers me croissants with nectarine compote. These have been made by TPS's People's Kitchen chefs, who cook up beautifully-smelling food on the shop floor, with compote courtesy of one of their many local cottage-industry suppliers. There's a deliberately neighbourly feel to the place, reflecting Bull's optimistic vision of a new form of community co-op which brings shoppers, traders and local food producers together in a style more akin to a community centre than a supermarket. As if on cue, a mum and her daughters arrive and register eagerly in the weekend's bake-off competition – a fundraiser for Amnesty International, suggested by Bull's 14-year-old daughter for their second anniversary.

As a business model, TPS is definitely one of a kind

As a business model, TPS is definitely one of a kind. Neither traditional co-op, nor typical wholefood store, it was quite a leap of faith opening on the back of just £50,000 in start-up capital – compared to around £500,000-£750,000 minimum for a 'normal' store. This was boosted by a £130,000 loan from Wall to Wall TV, which made a documentary about the first year of the store, to secure the lease. A grant from the Esmee Fairbairn Foundation (£55,000 a year for two years) covered Bull's salary, although she reinvested most of this in the business.

Everything else required – materials, furniture, legal advice and, above all, labour, together amounting to around £600,000 worth – was donated free of charge. At the heart of the business model is the membership scheme – currently 750-strong. Members pay £25 a year for the privilege of putting in four hours work a month, receiving a 20% discount on their purchases in return – along with some training. Membership conveys "rights, roles and responsibilities", Bull explains, including the right to vote "on everything – salaries, suppliers, products, management." There are no individual liquid returns. But the combination of job skills and a sense of enthusiastic community seem more than enough by compensation.

Indeed, members recently voted to change their legal structure from a traditional co-op to a Community Benefit Society, which ensures that any dividends will be returned to community projects chosen by members themselves. "There will be no fat cats!" says Bull. Instead, "we could buy a greenhouse for the nearby Calthorpe gardening project which supplies us with our salads, to help extend their season."

A huge pool of voluntary workers keeps staff overheads to a minimum. There are just 17 on the payroll, all of whom are paid the minimum wage. That's an awful lot of free, or at the very least cheap, labour. But Bell counters accusations of exploitation by insisting that TPS is helping people transform their lives with the skills they've learnt. It's certainly no picnic working with members who are largely untrained in retail, change shifts every four hours and are juggling all sorts of other responsibilities. On the day I visited, members working included an international student, a High Court judge and someone who is long-term unemployed.

If the business model is distinctive, so is the store itself. It's part normal shop, part eco-store (so Fairy washing-up liquid and tins of Whiskas stand side-by-side with Ecover and organic cat food). "We don't judge", says Bull, "but we do give choices.

"I personally may believe Coca-Cola, for instance, is one of the most dangerous products out there", says Bull. "But it's one of our top 10 lines. If we didn't sell it, we wouldn't have a business. But we always offer an alternative – we also sell Ubuntu [Fairtrade] cola. There's actually nothing we won't sell except cheap beer and alcopops. But cheap beer has no profit margin anyway, so why would we?"

They discriminate in favour of locally grown, seasonal fruit and veg, but will import if they have to. "We try to give customers a choice of three – a cheap option, a recognised brand and what we call a 'brand with values'". This might be something organic, or locally produced, or having fewer additives. With honey, for instance, you could buy a jar of 'Frank's Honey', which a member brings in from his garden in the suburbs.

They do, however, trumpet their success at turning any wilting fruit and veg into tasty meals in their People's Kitchen, which are then sold in the shop. "We also get vegetables donated from New Covent Garden [wholesale market] that might otherwise be dumped – it happened this week with three large boxes of perfect green tomatoes from Mexico that were no longer wanted. We made them into lasagne and chutneys in recycled jars. What a saving of all those global resources!" This year they calculate they saved three tonnes of waste from landfill and created 20,000 meals using surplus fruit and veg.

So is it a standard bearer of a retail revolution? Innovations charity NESTA seems to think so. Mark Griffiths from its Public Services Lab applauds its "moral purpose with commercial acumen", and highlights its "new forms of volunteering, new ways of organising, new ways of minimising the wastage of food…"

Retail analyst Neil Saunders of agency Conlumino agrees: "There is a backlash against the Big Four supermarkets, and this is a community-based, sustainable way of addressing the issues people don't like." But, he cautions that "it does occupy a distinct niche. It has limited scope in terms of rolling out as a mainstream proposition. It's not everyone's cup of tea and doesn't fit the image of a supermarket that many people are used to."

Talking to Bull on the supermarket's second birthday, she agrees it's been a roller coaster ride. The lowest point was when she talked Camden Council's bailiffs out of closing them down, when they couldn't pay their business rates this February. She negotiated staged payments over a cup of tea on their donated leather sofas and kept the doors open.

It sounds precarious, but TPS's distinct appeal helped it raise £7,000 in a week's worth of digital fundraising – with donations coming in from across the globe. Even so, it took The Fredericks Foundation to step up up with a £20,000 loan hours before the supermarket was going to shut.

The most heated argument was over the decision to sell cigarettes

It was a close call which helped focus members' minds on choosing products that increase footfall or have larger profit margins. One result was a recent vote to start selling cigarettes, which Bull describes as "the most heated argument members have ever had". Other plans include starting an external caterers and setting up local market stalls, both as extra income streams and to promote the shop.

There is a clear sense from everyone involved that failure is not an option. Sales, at least, are pointing the right way. In the year 2011/12, takings rose by 53%. And as Bull points out, "In two years we've created a business with £1.2 million turnover from zero, with gross profits of £368,000. We started with no cash and we've never had an overdraft… This year we have a loss of £92,000 after overheads, but I think next year we'll make a surplus."

And the story does seem to have struck a chord. Fourteen groups in the UK are interested in setting up their own version, and Bull hopes to see them take root as franchises "on an open source model" – using the TPS's name and values, but without the original shop benefiting financially.

She may have time to help realise this after she stands down as CEO, a move planned for this summer – "this is a community, not a vehicle for any one person's ego", she says, although the chances are she will be offered the position of Chair.

Can she ever imagine going back to mainstream retail? I don't expect her to say yes, but she does. "Possibly. I love it. But only if they allowed me to challenge things. I didn't like the way retail was going and I could have spent my life moaning. But [if you want change], sometimes you just have to get on and do it."

Sue Wheat is a freelance journalist.

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