Analysis of Failed Company - Kwik Save
1. Introduction
Kwik Save was the first and once the most successful serious limited-rang discounter in the United Kingdom (Drive, 2011). It was regarded as a soft discounter (with 5-10% discounts), compared to hard discounters (with 20% discounts) (Colla, 2003). In the zenith of its business, the company had more than 800 stores nationwide (Tedlow and Jones, 1993). Nonetheless, it was taken over by Somerfield in 1998 and eventually went into administration in 2007. To investigate Kwik Save’s failure, this paper exams the operations strategy of the company which includes external market analysis and internal operations analysis. It would be followed by identifying Kwik Save’s order qualifiers and winners. Finally, recommended strategies and operations for Kwik Save are presented.
2. Background of Kwik Save
The history of Kwik Save can be traced back to 1959 when Albert Gubay, a Welsh entrepreneur, established a small grocery shop in Rhyl and registered a new private company, Value Foods Ltd. A trip to United States in late 1964 introduced Gubay to ‘baby shark’ retailing, the selling at very low prices but high volume of a limited range of nationally branded products sold in simply designed and minimally decorated stores (Sparks, 1990). Combined with ideas gained from the German discount supermarket chain Aldi, Gubay opened the first Kwik Save Discount in Colwyn Bay in 1965. By 1970 there were 24 discount stores trading as Kwik Save, based particularly in the North Wales, Cheshire, and Shropshire areas. The company was converted into a public company and renamed Kwik Save Discount Group Ltd (Tedlow and Jones, 1993).
The 1970s and 1980s witnessed a revolution in Britain's retailing history: the rise of the superstores (Drive, 2011). While many retailers moved out to suburban locations in order to build large superstores, Kwik Save took the opportunities and expanded its operations from cheap out-of-town sites into town centers and residential areas.
Kwik Save was the first and once the most successful serious limited-rang discounter in the United Kingdom (Drive, 2011). It was regarded as a soft discounter (with 5-10% discounts), compared to hard discounters (with 20% discounts) (Colla, 2003). In the zenith of its business, the company had more than 800 stores nationwide (Tedlow and Jones, 1993). Nonetheless, it was taken over by Somerfield in 1998 and eventually went into administration in 2007. To investigate Kwik Save’s failure, this paper exams the operations strategy of the company which includes external market analysis and internal operations analysis. It would be followed by identifying Kwik Save’s order qualifiers and winners. Finally, recommended strategies and operations for Kwik Save are presented.
2. Background of Kwik Save
The history of Kwik Save can be traced back to 1959 when Albert Gubay, a Welsh entrepreneur, established a small grocery shop in Rhyl and registered a new private company, Value Foods Ltd. A trip to United States in late 1964 introduced Gubay to ‘baby shark’ retailing, the selling at very low prices but high volume of a limited range of nationally branded products sold in simply designed and minimally decorated stores (Sparks, 1990). Combined with ideas gained from the German discount supermarket chain Aldi, Gubay opened the first Kwik Save Discount in Colwyn Bay in 1965. By 1970 there were 24 discount stores trading as Kwik Save, based particularly in the North Wales, Cheshire, and Shropshire areas. The company was converted into a public company and renamed Kwik Save Discount Group Ltd (Tedlow and Jones, 1993).
The 1970s and 1980s witnessed a revolution in Britain's retailing history: the rise of the superstores (Drive, 2011). While many retailers moved out to suburban locations in order to build large superstores, Kwik Save took the opportunities and expanded its operations from cheap out-of-town sites into town centers and residential areas.
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