18 March 2022

Despite the growth in online sales in the used market, and the success of its four Express stores, CarShop CEO Nigel Hurley doesn’t foresee a time when there will no longer be a customer requirement for the larger supermarkets, and these remain an important part of the company’s roadmap going forward.

“We have new channels, but we’re not moving away from the superstore idea, because our customers aren’t all looking for a single solution,” he says. “Digital, Express and the superstores all have their place, and different solutions appeal to different customers. If we’re able to get into all of those niches, why wouldn’t we do that?”

Where the superstores win is with customers who want, say, a small family car, but aren’t clear about which model would suit them best. “If you want to look at and test drive two or three different models, then you go to a supermarket so that you can be absolutely clear which car you want to buy,” says Mr Hurley. “On the other hand, if you know that you’re looking for a specific model, in a particular colour, at a target price, that’s where Express wins – we’ll find that car and move it to a local store.

And then there are the customers who are happy to buy online without ever seeing the vehicle, although Mr Hurley acknowledges that this is less common in the used car world with older vehicles. “Our typical car is about six years old; from a confidence point of view, more often than not customers want to see the vehicle before they buy it.”

Express pilot projects

Certainly, though, Mr Hurley doesn’t foresee a time when the business will be built simply around Express stores drawing on a pool of vehicles from a central base, even if two of its Express stores are evocative of a hub and spoke model. The Leicester Express store piggy-backs on the infrastructure of the Nottingham superstore, while the recently opened Leighton Buzzard Express store was opened in an already-owned building close to CarShop’s 15-acre preparation centre.

More recently, CarShop has opened an Express store in Halifax, moving into an existing Sytner owned property that had been a VW dealership, and in April a new Express store will open in Cheltenham, in acquired premises that was formerly a JLR operation.

The Halifax site is very different from Leicester and Leighton Buzzard in that it puts an Express store into more of a traditional car dealership, with 60-70 cars on the forecourt.

In terms of visibility, the Leicester store is on a retail park on the exit route of a B&Q, but it’s not highly visible. Contrast that with Cheltenham, where CarShop deliberately set out to find a premises on the entrance to a high traffic retail park. “We found it by design rather than in being opportunistic; we sat down and asked what would happen if we had what we have in Halifax, but at the entrance to a high traffic area. That’s why Cheltenham will be a very interesting pilot.

“So in a way we have four pilot projects – all very different concepts,” he continues. “How we develop in terms of Express stores is still very much on the table for consideration, but certainly once Cheltenham opens in April that will give us more of a flavour as to what the future will look like.”

But none of this has changed the company’s strategy with its larger supermarkets, as witnessed by the opening of a Wolverhampton CarShop in October and plans to open a supermarket in Camberley at the end of 2022 – a multi-storey premises that Mr Hurley says will be a fabulous facility, very imposing in a high-traffic area.

“It’s going to be exciting on many fronts,” he says, “firstly because it will be our most southerly store, secondly because it will a fabulous site to visit, but also in terms of its catchment area. You can get there from Southampton in less than an hour, and there is easy access for London.”

Ambitious target

While the precise nature of the roadmap is still on the table to be written, the ambitious target of selling 150,000 units per year by 2024 across CarShop’s sites globally remains, with the UK representing the lion’s share of the company’s global footprint and accounting for some two thirds of sales. “We’re on track, with the goal clearly in site,” Mr Hurley asserts.

He believes, too, that the fundamentals of the used car industry remain intact. “The current environment means it is more difficult to find stock, and the price of that stock is different to what it was two or three years ago. But nothing else has really changed. Yes, there is more competition, but if you keep focused on what sells a used car, it’s about having the right vehicle at the right price, with the right processes to support it.

“Disruptors have come in, while at the same time retailers such as ourselves have expanded our footprint. At CarShop, we’ve adapted, our channels of stock acquisition have changed, and the breadth of cars that we get involved with has changed. The market is different to what it was two or three years ago, but the fundamentals remain.

“We could be in this environment for another four or five years – we’re conscious of that. But if you have great cars, great choice and you’ve got great people who operate with great process, and you have superb customer service, then however small the cake becomes, you just take a bigger slice.

“We’ll do as well as we always thought we would,” he concludes. “It’s just a different way of getting there. The plan hasn’t changed, and the direction of how we get there has changed very little. The overall focus is still the same in scope.”

Tags: Carshop, Express, growth, Nigel Hurley, superstore