The quest to take his family’s fifth-generation business to “the next level” is off to a sound start, according to chief executive Simon Hannah, with technology due to play a key role in further driving sales to £350 million by February 2031.
That headline revenue figure was set as the target following a comprehensive review in June 2020, when JW Filshill asked all of its 220 employees to help develop a 10-year strategy for the wholesale and distribution operation. It took place during what Mr Hannah describes as “the busiest time ever” in the history of the 146-year-old company, which owns the KeyStore brand that is franchised across 200 Scottish convenience shops that make up the core of its business.
With the first wave of lockdown restrictions generating huge demand for local shopping, Filshill recorded a 23 per cent increase in turnover to £191m during the year to January 31. Despite the cost of Covid safety measures, pre-tax profits more than doubled to £2.2m.
“We budgeted for the business to show a decline in turnover for this year – we thought that would be sensible given last year’s Covid boost for convenience stores,” Mr Hannah said. “But actually we are tracking ahead of last year which we are really, really pleased about.”
Filshill – which also supplies petrol stations, schools, ferries, prisons and pubs – closed its cash and carry service six months before the onset of Covid, moving to an exclusive click and collect system. This has allowed it to carefully track which customers are buying which goods, and when.
This has served the business well during the pandemic by allowing Filshill to prioritise its most loyal customers during periods of supply disruption. The company has furthermore added 100 merchants to its list of suppliers, taking the total to 600 and providing leeway to offer alternatives to customers when their usual goods are unavailable.
At the moment, 88% of orders coming in at Filshill are captured electronically. Mr Hannah said the company is intent on continuing to make the best use of this information.
“Working on such thin margins, we have got to work out how we make informed decisions rather than making it up or guessing or going on gut feel, and data is the absolute key to that,” Mr Hannah said. “We have got to work out how we optimise footfall, range, margin and revenue not just for us, but for our customers and our suppliers.
“You know, it’s a bank holiday in May in Glasgow and it’s 22 degrees, so what are we expecting to sell? Big data will allow us to work some of that stuff out, so technology is a significant play for our business, and our business growth strategy will be aligned to customers who are in that space.”
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Growing up in Bridge of Weir with his parents, brother and sister, Mr Hannah said he and his siblings were constantly “in and out” of the business when they were growing up. Even so, his long-term ambitions in those days were on the rugby pitch, having captained the Scottish Schools team in 1995-96 after completing secondary at Merchiston Castle in Edinburgh.
From there he went on to play for a spell in Australia before returning to Scotland where he did a business studies course at Napier University while playing a few seasons for Boroughmuir and then Heriots.
Although he came to realise that he would not make it as a professional rugby player, he still had his sights set on becoming a PE teacher when he was drafted in to help pack the wine shelves at Filshill in the run-up to Christmas 23 years ago. From there he stayed on working his way through half-a-dozen operational roles before joining the company’s buying team.
“I think that’s the bit of the business I enjoyed most,” Mr Hannah said. “When you are engaging with some of the biggest [fast-moving consumer goods] brands in the world…there was pretty high energy when I was involved in the commercial team.”
He formally took over the running of the business in 2010, where he now sits at the epicentre of logistics difficulties that are disrupting supply chains around the world and have been exacerbated in the UK by Brexit. In recent months, lead times for deliveries from suppliers have doubled from six to 12 days, while the availability of stock for customers has fallen from 98.5% to 90%.
“We have to take deliveries at different times of the day or night to suit our supply chain,” Mr Hannah said. “It’s not about being forceful, it’s about being accommodating and working out how we help each other.”
On top of that, there is the increasing push towards sustainability brought to the fore in Scotland by the COP26 conference held in Glasgow earlier this year. On this front, Mr Hannah is leading efforts to map out where new opportunities lie.
“We have got a number of suppliers talking to us about how we might be able to service parts of Scotland [on their behalf],” he said.
“We have got vehicles that travel to every corner of the country including the Highlands and Islands and all the way down to Doncaster, so we have got vehicle fleet in every postcode every week. That is an attractive proposition to a number of suppliers who are also looking for efficiency.”
What countries have you most enjoyed travelling to, for business or leisure, and why?
We have visited Portugal as a family all my life, it is a short flight from Glasgow and a place that I can unwind immediately. The people are very kind and the beaches, golf courses and food are fantastic. In terms of business, I have enjoyed travelling to Asia. The sheer scale and pace of technology is incredible and changes every time I visit.
When you were a child, what was your ideal job? Why did it appeal?
I wanted to be a PE teacher. I have always enjoyed sport and in particular team sports so was a natural thing to want to do.
What was your biggest break in business?
Taking over as managing director at Filshill from my dad in 2010 was a real highlight, becoming the fifth generation family member to lead the business. Also joining YPO in 2017 has had a very positive impact on me personally, not just as a business leader but as a dad and a husband too.
What was your worst moment in business?
My first two years as MD were a real challenge given the impact on our customers during the 2008 financial crisis. We suffered some significant bad debts in that period that resulted in us having to make redundancies for the first time in the company history. In a business for families like ours, that was really tough.
Who do you most admire and why?
My dad Ronald Hannah. His commitment to his own personal values of being honest, hard-working and putting others first has always been an inspiration to me and the way he embedded those same values in the business has created a fantastic foundation for me and my brother Nick to build on.
What book are you reading and what music are you listening to?
Traction by Gino Wickman. For music, Snow Patrol and Counting Crows are always “go to” albums in my playlist.