Somerfield's super saver splashes out

LIKE many of the shoppers at his stores, Alan Smith is careful with money. Despite tucking into a breakfast of poached eggs in the opulent surroundings of one of London's top hotels, the chief executive of Somerfield, once one of the most heavily indebted companies in Britain, keeps a close eye on the purse strings.

He volunteers the fact that meetings with his 1,300 store managers are held at football clubs because 'they're cheaper than hotels'. And his hobby of flying helicopters is, he insists, totally removed from the company. 'It's not like a corporate jet or anything,' he says.

But Smith, 55, who took over two years ago with a brief to turn round the ailing company, can spend if necessary. Somerfield, which includes the Kwik Save chain, is in the middle of a £100m programme to refurbish its stores. However, watching the pennies has been a habit ever since he arrived two years ago, when his first task was to agree a refinancing deal with the banks to keep the company going.

Smith's return to the High Street was a welcome homecoming for someone who had spent a 'not particularly enjoyable' year at Punch Taverns, even though he successfully steered the group through a high-profile bid battle with Whitbread for the Allied pubs. 'I missed store retailing,' he says. 'It's what I enjoy doing and when this opportunity came up I grabbed it. I got into store retailing running Victoria Wine 17 years ago, and apart from the Punch excursion that's what I've been doing.'

Smith's career took him from Victoria Wine to Kingfisher, where he was managing director of Superdrug and then B&Q. He loved his next job at Boddingtons, but it ended when the brewer and pub group was taken over by Greenalls. Three years at car retailer Evans Halshaw followed before he moved to Punch.

But taking charge at Somerfield was perhaps his most difficult task. His mission was to revitalise a firm that was reeling from the neardisastrous purchase of Kwik Save and a misguided attempt to convert tired Kwik Save sites into Somerfield stores.

His first moves were to cancel the store conversion programme and the internet shopping service. Just as important was to boost the morale of the 60,000 staff. 'They had two years of bad press and declining fortunes,' he says. 'It saps people's energy. It also gets rid of customers. So you get into this rapid downward spiral - turnover goes down so you cut back, people feel threatened and insecure, turnover goes down again.'

Products not being on the shelves, even while they were being promoted on TV, was not great. Smith says: 'Our supply chain was pretty rickety. It had indigestion - too much stock clogging up the warehouses and stores.'

Heavy discounting cleared the backlog and within six months morale was improved as customers stopped haranguing staff about gaps on the shelves. Smith says: 'It takes time for customers' opinions to fall, but also a long time for them to bounce back. We are now seen as having betterrun stores than before, with shorter queues and more products available. But we are held back by the fact that some are underlit, oldfashioned and have not had money spent on them.'

Hence the investment programme: so far, 50 out of 580 stores have been revamped. Kwik Save, which 'needs money quick', is having a makeover - 460 out of 780 stores have been done. A new advertising campaign and product launches, including renaming its Basics range, are all aimed at changing public perception.

Somerfield is back in the black, but Smith stresses that this is part of a five-year plan, not a miracle turnround. He says: 'We've been off our competitors' radar for a few years, but now we're getting more noticed. It's a wake-up call to them.' Smith's focus is also on Somerfield's move into city centres, following the successful 'Local' and 'Metro' concepts from market leaders Tesco and Sainsbury.

When not working, or trawling round rivals' stores at the weekend, Smith takes to the sky with his wife, Linda - they are both qualified helicopter pilots.

Down on the ground, life moves a bit more slowly at Somerfield. 'It's all about carrying on with the strategy,' Smith says. 'I think we'll be ploughing that furrow for now.'