By Scott Wright
CJ LANG & Son, the Dundee-based wholesaler and convenience retailer, reported a doubling of profits as it outlined plans for its biggest-ever investment in its store estate.
The privately-owned business said its faith in the outlook for the convenience store sector has given it the confidence to make the “record-breaking” investment, which follows strong trading throughout the pandemic.
New accounts for the company, which trades under the Spar fascia, will show that pre-tax profits grew to £3 million from £1.5m in the year ended April 30, on turnover up 9.4 per cent to £212.5m.
The growth came amid a period of significant change in the grocery retailing sector, which has resulted in consumers shopping more locally during the pandemic. CJ Lang said that growth is continuing, highlighting that its sales for the first six months of its current financial year are 11 per cent up on the same period of 2019.
Chief executive Colin McLean told The Herald that the board took the decision three weeks ago to make an undisclosed investment in its portfolio of company-owned stores – currently numbering 107 – which will include expenditure on new refrigeration, lighting, flooring and in its vehicle fleet. This investment, which is scheduled to begin in the first quarter of 2022, follows an investment of £2m by the company to roll-out its food-to-go offers in the last year. The offer, which the firm said “remains a key opportunity”, will be available in most of its company-owned stores by the end of 2021.
Mr McLean said: “What we are now doing is getting confidence back in the business. We have got additional monies now to invest in the next stage, so we will be investing in more in our vehicle fleet, renewing our fleet, but most importantly, in our infrastructure for our store base.”
He added: “That’s an exciting journey to fuel the opportunity to go forward and build on the success we have got already.”
Asked if the company was being affected by well-documented disruption to supply chains, which is causing shortages of some products, Mr McLean said CJ Lang was insulated to some extent because of the control it has over its distribution network. The company has its own wholesale depot in Dundee and its own fleet of vehicles, which Mr McLean said is a “key advantage”. It also sources around 50 per cent of the products its stores sell within Scotland.
“There are challenges, definitely,” he added, pointing to “well-publicised” difficulties retailers are facing in sourcing products such as beer, confectionery and crisps. With other issues such as carbon dioxide and driver shortages also cropping up, he said the uncertainty is “not going to go away in a hurry.”
“But I think the team have down a cracking job all the way through the pandemic,” he said.
Craig Tedford, CJ Lang’s finance director, said the company has had success with retention and recruitment incentives as it has sought to combat the risk of driver shortages. The company has 38 full-time equivalent drivers.
Overall employee numbers stood at 1,847 at the end of the reporting period, and has since fallen back to around 1,800.
Asked if the company was finding it hard to find staff, Mr Tedford said: “It has certainly been a challenge,” he said. “We are not exempt from the challenges that are facing other businesses.”
Meanwhile, chairman Jim Hepburn said the company would “never say never” when it comes to acquisitions, noting that it would assess opportunities as they appear. But he said the primary emphasis will be on achieving growth by investing in the company’s own stores.
CJ Lang supplies more than 200 independent grocery retailers in Scotland as a wholesaler, in addition to serving its own shops.
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