Basic goes into overdrive

This year, Basic intends to pass the 20 store threshold. With the opening of its fifteenth store on 30 March in Mannheim (900 m²), this organic chain is entering a year of expansion. Nine new stores are planned, and the locations have already been decided. The company is also going to expand into neighbouring countries. At the end of 2005, Josef Spanrunft (Chief Executive of Basic) stated that the target for 2006 was five to eight new stores. But attractive locations have obviously been found more quickly than expected, and the Munich company produced good financial results last year.

Picture: A Basic supermarket from above.

Preliminary figures show that Basic AG (joint stock company Basic) increased its turnover from 39 million Euros in 2004 to 53 million Euros in 2005. By the end of 2005, the company had opened five new stores and was operating a total of 14 in ten German towns. The first new Basic store this year is opening in the centre of Mannheim. In this case two innovations relating to store layout and product range are being tested. Books, newspapers and CDs on the subjects of nutrition, health and wellness will be on sale in the Media Center, and there will also be room to display information material from firms and customers. The chemists and natural cosmetics section is being fitted out in a different way. The aim of the new shelf system is to attract the attention of customers more to this sales area.

If the innovations prove to be successful, they will be adopted in all new branches, for example when expansion reaches Austria in the middle of June. With this strategy, Basic will be the first German organic chain to export its concept. Basic has acquired a store with floor space of 860 m² in the 12th district in Vienna. Basic are not afraid of the competition presented by Maran that has four stores in the city. “Vienna is now getting the real thing” says company spokesperson Sylvia Raabe. Basic’s purchasing department is busy determining the product lines for Austria, because it is vital for the success of the enterprise to tailor products to the needs of the customers. Regional products play a special role in Austria, so that as well as Dennree local companies will have a supply opportunity.      

But before this, the opening of the fourth store in Munich is on Stefan Steuer’s agenda. The new manager in charge of expanding the business comes from the conventional trade and took the job at Basic in January. Basic store IV will be launched in Schwabing in May. The location in Leopoldstrasse was so tempting that the company willingly accepted the smaller floor space of roughly 500 m², especially since, as Sylvia Raabe points out, that district is an important shopping area. Of course, Basic wants a presence in the German capital as well, and it now has Berlin in its sights. A Basic store is planned for Steglitz, and the opening date is November or December.

The stores in Cologne and Frankfurt are obviously doing particularly well: both cities will each get a new store in the current year. The third store in Cologne is planned to open in September, and in Frankfurt it will most likely be the end of the year. The company wants to expand further in the Rhine-Main region in the future. A new undertaking is the large-scale store in Wiesbaden (over 1000 m²), although it will take another year for the renovation work to be completed on the building complex in Schützenhofstrasse. At a press conference, Helmut Müller, head of economic development in Wiesbaden, has already expressed his delight that Basic has decided to lease the complex in his city.

Another aspect of the strategy adopted by Basic AG is to carry on continually expanding its own brands. The value-for-money basic range, that comprises 150 products at present, is to be extended to 300. Everyday foods, which is where the emphasis lies, would be supplemented by products from other lines like wine, sweets and ingredients for cakes and pastries. Sylvia Raabe explains that own brand goods are fundamental to the company’s marketing strategy, with special offers changing every two weeks. Communicating with its customers has been helped by launching a new homepage on the internet in January (www.basicbio.de). The re-launched pages provide information on current offers, the various product lines, organic farming and nutrition. The rubric “Organic-Special” deals with such topics as Fair Trade, genetically modified food and, just at the moment, bird flu. Vegetarians, people with macrobiotic needs and people with food allergies can also find information, ideas and tips about what to eat. Twice a month, a newsletter advertises the current offers but also contains information on products, recipes and items of topical interest.