SPANO HOLDING HIS OWN IN SUPERMARKET WARS

Written on the 27 February 2015 by Jenna Rathbone

SPANO HOLDING HIS OWN IN SUPERMARKET WARS

HE is just 28 years old and the CEO of a Gold Coast company turning over $110 million a year.

He's also giving Coles and Woolworths a run for their money.

Frank Spano heads Spano Group, a business that owns six IGA's in south east Queensland including Crestwood, the first ever Supa IGA on the Gold Coast.

In the fight to stay ahead of the majors, the supermarket group has implemented a number of initiatives to create a sustainable alternative supermarket experience for consumers. Along the way, it is purposefully supporting the livelihoods of local farmers.

Spano says he is a great believer in the benefits of sourcing locally grown produce for his business.

"This enables us to be competitive in the marketplace while providing our customers with better quality products at a cheaper price," says Spano.

"We are skipping the middle man, so our cost of goods comes down and we can give our customers a better offer on their produce. At present I have eight farmers coming on board over the next three or four months."

Spano says the challenge is to improve volume and make locally sourced produce sustainable for the long term.

"We need to manage quality so product gets to the store in the right area and at the right temperature so it doesn't deteriorate - it is a fresh product so we need to make sure we get the transport to satisfy our needs."

Spano says one of the biggest factors impacting business has been the Coles and Woolworths discounting war which has meant Spano Group has had to restructure its gross profit model. The deregulation of trading hours has also been an issue.

"It is important to keep deregulation for independence to ensure the livelihood of smaller retailers and offer a viable alternative to Coles and Woolworths for consumers," says Spano.

Despite these challenges, Spano Group is growing at 6.3 per cent annually, while the independent marketplace is experiencing a decline.

Spano Group has stores in Ashmore, Mermaid Waters, Stanthorpe, Warwick, Gatton and has recently acquired another location in Nerang.  In addition, the company operates the Federal Hotel and Valley Bake and Coffee in Gatton and has its own fruit warehouse in Brisbane.

The first store was opened by Tony and Natalie Spano, Frank's parents, and has expanded turnover from $5 million in 2001 to $110 million this fiscal year.

"The operation capacity of the business and the resources we have available have expanded drastically because of changes in operational aspects within the organisation," says Spano.

"We have grown from no corporate structure in 2011 to operating an office with 16 support staff to manage our organisation and provide strategy advice and support for our retail operation in south east Queensland.

"This has allowed us to become more efficient in the marketplace and has improved and secured our competiveness within our current markets.

"We believe that providing customers what they want with a competitive offer and good quality fresh foods will build consumer loyalty and drive our business forward, as we compete against the might of Coles and Woolworths."

Spano entered the family business at the age of 13, working during the school holidays. Although he wanted to be a lawyer, Spano completed his first grocery order at the age of 15 and since then has been engrained in the industry.

Spano sits on the IGA state council which allows him to provide recommendation and feedback to support the unity and growth of the IGA brand.


Author: Jenna Rathbone
About: Jenna Rathbone is a Queensland-based journalist who writes on a range of issues including business and property affairs and social issues.
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