Discount chain looks to interstate

NQR oMelbourne-based discount grocery chain, NQR, is set to expand into NSW and South Australia in the new year.

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Aaron Fitzgerald, CEO of NQR, told Inside Retail PREMIUM the chain is in lease negotiations for 700sqm stores in both states.

“We’ll expand first in South Australia and NSW, and then we’ll work upwards and sideways from there,” he says.

NQR, which is an abbreviation of Not Quite Right, has 23 stores in both urban and country Victorian locations.

The local retailer has opened four stores in the last four months, including in country towns, Echuca and Horsham.

“In those areas, we had a high customer request rate [for store openings], so we did our due diligence and checked out the areas,” says Fitzgerald.

“Those stores are also on a logistics road that leads into other states: Horsham into South Australia and Echuca into NSW.”

NQR prefers stores of around 700sqm with a connecting car park and retail anchor, such as a supermarket, liquor chain, or butcher.

The first NQR opened in suburban Melbourne in 1987 with a model of selling excess or damaged stock, packaging over-runs, and end of season lines.

Today, it sells more than 4000 branded products, such a dairy, bread, toiletries, cleaning products, and pet food.

Growing product categories for NQR include liquor, frozen goods, dried goods, and the competitive dairy space.

This means it has installed walk in dairy fridges at its four new stores and will continue this strategy as it rolls out further outlets.

In the last few years, local manufacturers’ loss has been the retailer’s gain, as Australian brands are squeezed out of the majors.

“Homebrand [by Coles and Woolworths] has been a part of us getting more products,” says Fitzgerald.

“Every time they introduce a new homebrand, it means a supplier has been squeezed out somehow. That’s having a huge impact on manufacturers and some are pretty worried.

“I do think that consumers are becoming far wiser to those [marketing] gimmicks and hence, ourselves and Aldi are going strong.”

NQR’s largest competitor in the market is German-owned supermarket, Aldi, as well as some smaller operators.

Fitzgerald says NQR has no major competitors in NSW, but faces a similar chain in SA.

“In South Australia there is Rite Price, but I think they’re yet to experience what it’s like to be next to an Aldi store.

Rite Price has eight stores in South Australia and a similar red and yellow branding to NQR.

This article also appears in issue 1981 of Inside Retail PREMIUM, available December 6, 2013.

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