Deli of the month: Cobbs Farm Shop
With sales of £2.4m, Cobbs Farm Shop was the first in a group of seven investor-backed stores, and remains the flagship. But as chief executive Tom Newey tells FFD, building a chain is about more than just finding ‘the most stonking site’.
A decade ago, an ex-army officer turned City banker hit upon a bright idea to cash in on the burgeoning farm shop sector.
Gordon Leatherdale’s plan was to raise money from private investors and put it into “mom and pop” farm shops that had hit a ceiling, either financially or in terms of retail skills.
Inject some business nous and develop a high-margin foodservice offer and you could unleash all kinds of growth potential.
Together with brewing entrepreneur David Bruce, founder of the Firkin pub chain, he launched Country Food & Dining (CFD), and in October 2007 bought their first site: Cobbs Farm Shop & Kitchen, on the A4 near Hungerford, Berkshire.
Raising a £4m fighting fund via the Enterprise Investment Scheme – a package of tax breaks to bolster investment in small firms – CFD went onto buy three more sites in rapid succession: Green Fields in Telford, The Good Life near Winchester and Springleaze near Bath. The aim with each was to replicate the Cobb “concept”: a farm shop, a restaurant with indoor and al fresco dining, a commercial kitchen, a butchery, and add-ons such as a fishmonger or florist, all on freehold sites that would automatically appreciate in value.
A decade later, Leatherdale is long departed – he left in 2009, founding and selling the Wild Trail snacks bar brand, and more recently launching importer Healthier Foods.
Also gone from the group is Springleaze (or Woody’s, as it became under CFD’s ownership), which never produced an adequate return despite a £750,000 redevelopment.
But David Bruce is still chairman, and the original Cobbs remains the flagship of a £6.5m chain – now renamed Cobbs Farm Co – that today includes six farm shops of various sizes across southern England, plus a Cobbs-branded café at the Wilton Shopping Village near Salisbury.
There’s also a production kitchen in Hungerford that supplies retail products and café lines to the whole group. This means the café kitchens have been deskilled, so any staff member can help out with what are mainly plating and garnishing duties.
In day-to-day charge of the whole shebang is Tom Newey, who joined Cobbs in 2008 as general manager and was soon elevated to group operations director to fill an “enormous vacuum” in the management team.
He became chief executive in 2013, at which point – despite spending several years in investment banking with Nomura and Goldman Sachs – he apparently had to “learn the intricacies of shareholder relations and how to read the accounts”.
But then, tight financial controls had swiftly become a necessity for Cobbs. “In the early years of CFD,” Newey tells me over coffee in the Hungerford site’s café, “we spent an awful lot of money, we lost an awful lot of money – but we learned some invaluable lessons.”
One was the sheer complexity of a multi-department farm shop. This led them to develop “a concession model”, so management didn’t get mired in departments that need specialist skills. “We understood early on that our priority was making sure the main shop and café were delivering,” he says. “Where we think there’s a real specialism, such as floristry or fish, we’ll look to find a local business to work with – maybe one that is looking for a second site.”
All purchases go through the central tills, and concession holders are paid the sales value minus a set percentage. “We do everything for them so they can focus on trading,” says Newey. “It means we benefit from their skills and have less man management to do. The challenge is dealing with a lot of individual entrepreneurs. You have to balance using their skills with ensuring their standards match yours.”
Cobbs Farm Co is already breaking from the concession model by running its own butchery at two sites: Good Life in Winchester and Manydown in Basingstoke. Both had previously been run by the Hungerford butchery concession holder, but Newey felt he was over-stretched trying to run three outlets – an issue familiar to any shop owner who has attempted to open a second or third unit. “The jump from running one to running two sites is possibly the worst,” he says. “It gets easier once you reach six or seven.”
Newey and area manager Jemma Bentley spent five months “sucking up as much information as we could” about the fresh meat trade so they wouldn’t get the wool pulled over their eyes, before opening counters under Cobbs’ own management at Good Life and Manydown.
They’ve invested in dry-ageing rooms at both sites and now believe these have the best butchery offer in the group – a preparation, by the sound of it, for taking all the counters back in-house.
“We’ve also introduced something we’ve wanted for some time,” he continues, “which is an element of pre-packing. We do believe there’s room for grab-and-go. The pace people lead their lives these days, not everyone wants to stand at the counter talking about the weather while they wait for a pound of mince.”
Despite growing to seven outlets now, the Cobbs Farm Co operational structure is relatively lean. Individual shop managers are supported by Jemma Bentley on the retail side and her husband Dan Bentley on foodservice, both of whom report to Newey. Aside from marketing co-ordinator Lauren Andrews, that’s about it, and may explain why Newey says: “We have worked ridiculously long hours for a very, very long time.”
With much power devolved to local managers, including ranging decisions, it’s vital the senior team keeps tabs on the money. There’s a group target of 37.5% gross margin on retail lines, tracked daily by shop managers using a Eureka EPoS system and by the senior team on a monthly basis. Monthly stock-takes help ensure what appears in the accounts matches what’s on Eureka – in case, for example, stock is signed into the shop but not logged on the accounts.
“It took time to bed in,” Newey says. “But it means we’re never more than a month behind the curve. I don’t want to find out in December that we’ve been bleeding money since July.”
He admits to being “a bit of a control freak”, and has an obsession with the figures that may be a hangover from his time in the City – a sector he fell into after being talent-spotted while working in Nomura’s staff restaurant. “I think I was one of the last people to get in on the back of hard work and merit, rather than an MBA,” he says. It was “proper, on-the-floor East End barrow boy stuff”, and while he never had any formal bank training he did learn “the importance of a calculator”.
Quitting the banking sector, he travelled for a bit, then went on to build and sell what became one of Germany’s biggest marketing distributors, putting together packs of branded promotional flyers for distribution in cities and airports.
He also met his future wife in Germany – which explains why he was “emotionally very upset” by the Brexit vote, although he adds: “As a businessman… we will look for opportunities within this scenario”. A case in point is the current Cobbs ad campaign, which asks: “Has there ever been a better time to support British produce?”
With money in his pocket, Newey returned to his home county of Cornwall for a while, helping set up Carruan farm shop, before receiving the call from Gordon Leatherdale.
The original Hungerford shop still provides the template for the rest of the group, although, as the top team have gained in confidence, they have eased some of the ‘rules’ – for example, taking on leasehold sites where they could see strong potential. “We’re not always just looking at the most stonking site,” says Newey. “When we bought Fielders Farm Shop [near Pangbourne], it was on a 30-year lease, and was actually very small – 500 sq ft. But there was an opportunity to take a lease on an adjacent barn and we now have planning for a 7,500 sq ft shop. It will be a significant investment, but it’s a really exciting opportunity for us.”
Hindsight has shown freehold sites are not essential. “If we can get a long lease, it enables us to use our cash more effectively. If you buy a freehold you are probably looking at spending £1.5m to get it right. We could probably open 10 to 12 leaseholds for that.”
The original Green Fields near Telford has since been supplemented by a second, smaller leasehold site nearby, and here too there is permission for a 7,500 sq ft development. “We haven’t done it yet because it was badly affected by the downturn,” says Newey. “It will cost £1.5m and doesn’t quite justify that at this stage.”
Cobbs at Hungerford was itself given a £600k makeover last year. It took the retail space to 5,000 sq ft, the café to 1,500 sq ft, and created a kids’ play zone on the first floor.
The shop and café were refitted to give a more contemporary feel and the offer has been tweaked to appeal more to the younger shopper while not alienating the oldies.
But fresh food – including Cobbs Farm’s own fresh fruit – is key to setting the tone. “We’re trying to whack people with the fresh experience as soon as they walk in,” says Newey.
Back in 2008, he tells me, all CFD‘s investor documents were talking about the “grey pound”. But he quickly realised that – as in his native Cornwall, where shopping was a true family activity – Cobbs has to appeal to all age groups.
“It became clearer that the young market was absolutely vital,” he says. “They’re interested in what that they’re eating, and their kids will be our shoppers of the future.”
Locations: Cobbs Farm Shop, Hungerford; Good Life Farm Shop & Café, Winchester; Fielders Farm Shop, nr Theale, Berks; Manydown Farm Shop & Bus Café, Basingstoke; Green Fields Farm Shops, Donnington and Priorslee, Telford; Cobbs at Wilton Market Café, nr Salisbury.
Group turnover: £6.5m
Average gross margin: 37.5%
Group employees: 250
- Truffle crisps
- Peter’s Yard crispbead (standard pack)
- Stokes tomato ketchup and mayo
- Fosbury honey
- Cobbs own-brand honey
- Snowdonia Black Bomber
- Brie de Meaux
- Spooning Gorgonzola
- Ooh Chocolata bars
- Handmade Scotch Egg Co – Classic Mac
- Upton Smokery smoked salmon
- Mere Farm smoked trout terrine & roulades
- Luchito smoked chilli mayo
- Field Fayre frozen croissants
- Jude’s salted caramel ice cream