We visit the hiSbe pilot independent supermarket store in Brighton and interview co-founder Amy Anslow about the inspiration behind the venture, how the horse meat scandal helped get it off the ground and their sourcing policy of working with local small farmers and suppliers…

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Why did you choose Brighton as the location for your first independent supermarket store, and are you looking into future locations?

I’d been living here for a short period of time before we started working on this project. I had previously moved from Manchester, which is another city that is quite big with social enterprise and real food and that sort of thing. So it was a bit of a toss up really between starting in Brighton or Manchester, and we toyed with Bristol for a short period as well. I think we both loved it here and wanted to live here while we were working on this thing.

Secondly, and more on the negative side, we knew that supermarkets had been on the agenda in Brighton for a long time. They had been very forceful, and they had bullied some of the local communities. MPs had got involved, the council had got involved… So we knew that people were catching onto the idea that supermarkets aren’t our best friends in Brighton.

We also just felt that Brighton was the right place in terms of people wanting to shop independently – we’ve got a huge independent retail scene in Brighton. We knew there was an appetite for eating well, shopping independently, and a big student population. So it was here that we focussed our research, tested all those assumptions, and decided that it was the right place. There was nowhere else in the running for very long, it was very clear to us that Brighton was the right place to start.

For the second part of the question, about future locations. This was always the pilot, an opportunity to test the concept and fine tune and tweak and get supply routes in place. To then try to replicate that in another city would be just as difficult. So the intention is that we will build a small regional chain, so we can call back on the same supply networks.

So the focus will be on the South East for now, then?

Yeah, Hove is probably next. We have a lot of shoppers who have said they would love to see one in Hove. But obviously we have others who say they would love to see us in Kemptown…

What inspired you to set this up? Do you have a background in retailing at all?

Ruth’s background is in marketing and sales, she worked for some of the big corporates for most of her career – Unilever, P&G etc. She worked with buyers from the big supermarkets, so she saw it from that side. Getting her products onto the shelves. My background is third sector, so I’ve worked for Metropolitan Police, London Fire Brigade, Princes Trust. My background is all based around behavioural change, getting people to make different choices. We both come from these very different worlds, and then found that there was a lot of crossover in food and consumer decision making and how we choose to spend our money. So the project was born out of conversations from those two perspectives.

How much do you think things like the horsemeat scandal has helped you guys? The social media backlash and public outrage – do you think it has helped the rise of the independent sector?

It’s helped us enormously. When we first started looking into this idea and how we should phrase things, certain terminology we should use, we started talking about ethical food. Nobody got that, nobody understood ethical food. At that stage, 2009/2010, a lot of people didn’t understand what fair-trade was, didn’t know what direct trade was, didn’t get why they should support it.

Then over that period supermarkets have really cut their own throats in a way, because it’s just been one scandal after another. There was Jamie’s Schools, SOS Dairy, the Horsemeat Scandal, and it seemed like week in week out there was something in the news about supermarkets not treating suppliers fairly, or not giving proper information to customers. So it started coming into the public consciousness a lot more that these guys aren’t trying to make everything cheaper – those buy one get one frees aren’t the supermarket being generous, someone is seriously losing out there. And all this stuff started coming through and people’s awareness grew. People are starting to wake up to the idea that every time they buy something it’s a vote for either how it is or how it should be. Changing the way you buy food is an opportunity to be an activist, whatever of those things you care about and whatever of those things you want to effect. That was what we wanted to get across, and that’s where the scandals have helped. If supermarkets were doing things the way they should, there wouldn’t be a need for this. If we could all trust that their standards mean what they say they mean, then there wouldn’t be any need for this.

What standard logos do you use in the shop?

When it comes to fruit, veg and meat, we favour local. Our customers understand local better. The thing with organic is that people are wising up to the fact that it’s just a way for the supermarkets to charge more money. It’s always been pitched at the ‘Waitrose shopper’ or the person who has a bit more money to spend, and our ethos is about making good food more affordable for everyone. I think some of the organic labels put people off. The Organic Trade Board try very hard to get through to the every-man customer with some of their marketing and it’s just very difficult, because I think a lot of people on average incomes just don’t see it for them. But what they do get is local, it’s from around here, it’s fresher, it’s not had to travel so far, it might have been in the ground this morning!

And local to you, is that neighbouring county or…?

I think officially it’s a 30 mile radius of the same county. Obviously here we have both East Sussex and West Sussex, but we do get stuff from Kent as well. None of our meat comes from more than 26 miles away, which is good. I saw a Sainsbury’s advert the other day with one of those chefs, and he was saying something like, “All our meat is local, it comes from 57 miles away,” and I was thinking “that’s not local to anyone!”

Is this model applicable to large supermarkets? Could they do this kind of thing, if they chose to?

Well, not easily probably. I mean it’s a bit like trying to turn around an oil tanker – once you’ve got an operation that’s that big, it would take a long time. It’s much easier for an organisation to come in that already has that embedded in its foundation. But if you ask me could big supermarkets make good food more affordable for people, they absolutely could. They could take one per cent margin on their electric, DVD and book sales and take that off the fresh fruit and veg, and non-processed foods, and not affect their margin at all. Is there an intention to do that… no, never. We’ve had to work really hard to find the ways in our business model that we can afford to take less margin to make stuff more affordable. Given the size of big supermarkets, and all the revenue they have, they could do that extremely easily. When it comes to food, they tend to make more on promotions – they make tens of hundreds of thousands of pounds per store per week on those things. So why are our beetroot a third of a price of Sainsbury’s?

I was going to say – one thing that turns people off the idea of shopping outside of the big supermarkets is because you think it’s going to be much cheaper, what with the bulk buying and offers. But it’s more or less the same price here…

Yeah. Anything branded we sell below the RRP, which is unusual and sounds at first a bit impossible. But it’s because the RRP has been creeping up steadily over the past few years, and so you can – well, we can – make the margin that we need by not charging the RRP to customers. So what that means is that on our branded products, unless the big supermarkets have an offer on for that week, they’ll be cheaper. But when it goes back to regular prices, we’re pretty much beating them. We’re not saying to people: ‘never shop at supermarkets’. Our intention is to just stop people from shopping exclusively at supermarkets. So if you know that your favourite coffee is on offer at Sainsbury’s this week, by all means go and get it at Sainsbury’s this week! But next week, when the offer’s over, it will be cheaper again here. It’s important to us that we don’t have offers or promotions – that the price is the price and it’s the best price that we can get for you.

What about e-commerce, is that something you’re looking in to?

It’s tricky, we’ve had a number of conversations about it from long before we opened the store, and we continue to have them now, but there’s a lot of work involved in doing it. The nature of what we’re doing here means that on the branded products it wouldn’t be so tricky, but in terms of the fresh meat – we won’t always have the same cuts every week, we can’t always guarantee that we’ll have a certain vegetable every week. But when people come in here their feedback has been that it doesn’t bother them at all – they come in here having not yet decided what they’re going to cook for three nights, they see what’s here, they engage with the store. Rather than going around with a list, switched off. Everything about regular supermarkets is about switching people off so that you only notice the big chunky offers. Everything about here is about switching people on – we don’t need all that noise, there is no in-store radio saying ‘bing bong, welcome to hiSbe! Please note our carrots are cheaper than Asda this week!’ I don’t like that when I’m shopping. I don’t like having to try to decode every offer, my mental arithmetic’s not up to it anyway. The feedback we get is that people like the simplicity of it here.

If we did go down the route of online shopping, I think what we’ll have to do is phase it in slowly – maybe have a click and collect and then move on from there. We do a little bit at the moment, delivery to offices who would normally buy their tea, coffee, bananas from another supermarket and wanted to make the switch, and we’ll continue to do that. I think rather than doing every product we have, we might do things like a hiSbe Saturday Brunch pack with eggs and bacon and other things, or a hiSbe Sunday Roast pack, and that would be a joint of meat of your choice, to the size that you need, and all the veg.

In terms of the money that goes to the farmer – I read somewhere that at Tesco and Asda and places like that it’s around 10%. What do you do here?

Yeah, sometimes it’s 10%, sometimes in those places it’s more like 7 or 8p per pound. So ours is 51p per pound. Our milk is a good example. Some things we choose to make less margin on, because it’s the right thing to do. Our milk is around 50p a pint, which is around the same price you’ll find at the Co-op or Sainsbury’s. It’s non-homogenised, and it’s local, and it’s small scale. We make 9p on that, and 41p goes to the farmer. Obviously with the dairy wars at the moment, farmers have been selling to the supermarkets and letting them set their own prices. Here, if it’s a 9p margin then that’s what it is.

It seems like this is such a good idea, why hasn’t anyone done this before?

I think it hasn’t happened before because it’s a huge amount of work – took us nearly four years – and you’re not going to make your millions out of it. You’ve either got to do it for the love of it, because you want to create a sustainable business with human values and a democratic model, or you’re going to start doing a business doing something else!

I’ve noticed your wall of people who helped out in the crowd funding campaign. That was obviously key, and the timing as well must have been fortunate given that crowd funding has only taken off in the last few years.

The crowd funding was really important for a couple of reasons. Firstly, it demonstrated that there was  a willing group of people who wanted to shop here. What we did was we gave rewards to people who donated. So for every ten pounds they put in, they got twelve pounds of discounts in store. So they could come in and save on their shopping. People bought those up front, and then we had something tangible and real that you can say to an investor: “Ok, we need to make this much more. These are people who are already holding these vouchers ready to come in and spend them, and that amount – we’d sold £30,000 worth of vouchers – would amount to £300,000 worth of sales if everyone were to come in and redeem them.” So that starts to look very attractive to investors, that you potentially have this pool of people ready to come in and spend more than what you anticipate taking in the first year.

It was also really important because it was validation that we were on the right track and people supported it, and from there we were able to springboard into getting some bigger investments. We knew that no high-street bank would support a business that was aiming to make very little money, so we had to find another way of raising that £200,000 pounds. For us it was important to do it in a way that was as democratic as possible – so if you had a tenner, you could contribute and still get a return on that contribution. I think our biggest investment was around £70,000, and they have shares in the company. It was about giving everyone a level that they felt they could get in at, and I anticipate that we will go on to fund all the shops that way.

The crowd funding was very useful, but it would only have been as successful as it was with the crowd that we built. People have a bit of a misconception that crowd funding is this group of benevolent people waiting online for the next project to pop up that they can put some cash into, and unfortunately that’s just not the case. You have to build the crowd, bring them along with you, make them believe in what you’re doing to the point that when you turn around and say ‘Ok, got a tenner? Got 20 quid?’ They’ll actually say yes, because they want to see it happen.

In fact today (Monday the 14th April) is the first anniversary of our crowd funding campaign. It never would have happened without them.

So I guess social media is quite important for you guys?

Absolutely, couldn’t have done it without. The last day of the crowd funding campaign we were up to nearly £20,000. Now they have these milestones, and if you don’t reach the milestone you don’t get the difference from the last one – so £10,000, £20,000, and you have to go beyond the milestone to secure the money. That last day we didn’t move from the computer, tweeting all day. Then at about 8 in the evening we ended up over £30,000. Lots and lots of work.

We get approached by people all the time now who are looking to do a crowd-funding campaign, and really it’s all about how much time have you got to put into it. Because if you’re only going to spend one day a week tweeting, it’s not enough. You have to see it as a campaign, and for the length of that campaign that is your job. Emailing, newsletters, drawing people in from wherever you can. Never could have done it without social media – it would have involved walking around thousands of houses in Brighton, knocking on people’s doors. Thank goodness for Twitter!