Athienitis Supermarket in Nicosia is consistently judged the cheapest of the six big Nicosia supermarkets surveyed at least once a month by the government. The Sunday Mail decided to find out how they do it.
WHEN CHRISTOS Hadjichristofi from Athienou opened his general store in Ermou Street in 1959, he probably did not expect his business – and the philosophy which underpins it – to still be thriving 50 years later.
The original shop was completely burned down during the 1974 invasion, and after a 10-year interlude in Protagorou Street, the family business has been located in Kennedy Avenue (Pallouriotissa) for the last 25 years.
From its modest beginnings, it has now grown into a €28 million business owned and run by Mikis Hadjichristofi and the other three of the founder’s surviving sons, and welcomed an estimated 200,000 customers through its doors last year.
Mikis Hadjichristofi explained Athienitis’ secret of success.
“First of all, we are disciplined and work everything out to the last cent, which means you necessarily make the right kind of purchases, because you won’t let yourself be tricked. We also buy in bulk, sometimes importing goods ourselves, so we can compete with anyone.”
Surprisingly, in this day of chasing maximum profits, Athienitis operate a “cost plus” pricing strategy across the board, setting the selling price by adding a share of costs plus a small profit margin to whatever the purchase price might be.
Hadjichristofi said: “In the early days, we didn’t have big purchasing power – that came later – but our main principle was and still is “high volume, low margin”. We aim to increase profit by selling bigger quantities. That’s how we built up the business.”
“That philosophy came from our father, and we’ve kept it going. In the old days, we would buy a truckload of tinned milk – 400 cases of it – and sell it at cost price. We weren’t engaging in unfair competition, we were selling the wooden cases the milk came in for two shillings each. So on a truckload of milk, we would make CY£40.”
The brothers do not pay any attention to their competitors. “We don’t need others to motivate us. If someone buys something at €0.50 and sells it at €1.00, we won’t offer the same thing at €0.90 just to be able to say “we’re beating them on price”. We follow our own line, which says: if it’s food, sell it at €0.52 or even €0.51, if it’s other goods, sell it at €0.55 or €0.60, depending on the specifics.”
The family says another very important part of the Athienitis approach is honesty in their dealings with everyone they work with.
“We won’t take a single cent more than we’re due. If a supplier or importer gives you a slightly cheaper price, even by just one cent, you don’t keep that for yourself: you reduce your selling price and pass that benefit on to your customer.”
The Athienitis approach is also attractive to suppliers: “They can rely on us to pay cash on the nail, or maybe after a very short gap. Exceptionally, someone might get paid after one month. But nobody is left worrying for months when they’ll finally get paid – some suppliers get part-payment in advance. We even pay for our milk supplies on a daily basis.”
Central to the whole Athienitis philosophy is valuing their customers. “They are the ones who reward you, who give you approval. We win people’s trust. I’ll talk to our customers, I’ll listen to their problems, I may give them something extra if I can, and through that, build up long-lasting personal ties. And they stay with us, you know. Our competitors may make all sorts of offers, but our customers never leave us.”
“When we were completely wiped out in 1974, we were out of the market for about six months. When we re-opened, the people were swarming around us like bees. Why? That loyalty is what you build up through your own honesty, and once you have that reputation, you never lose it. Money can come and go, but reputation never leaves you.”
The brothers Hadjichristofi don’t believe in loyalty cards or adverts. “Our advertising is doing things well and letting word of mouth do the rest, for free. Rather than spend thousands on advertising, we prefer to pass that on to the customer if we can. People can come here and shop with their eyes shut, because they can trust us not to rip them off. That is no easy thing, especially these days, when most people seem to just be looking for ways to mislead you or put one over you.”
It is easy to be cynical when someone says their business is “like a big family”, but there was no mistaking the confidence with which junior staff talked to Mikis Hadjichristofi as he walked through the store.
“We’ve got people who have been working here for 40 years. Why? Because we pay them fairly and show that we value their efforts. Take public holidays, for example. From what we hear, other employers don’t pay extra for working on a holiday, they just give another day off. If we open on a public holiday, our people get paid double time as well as getting a day off.”
Andreas Michael runs the fruit and vegetable department as a franchise within the Athienitis store. Although he is not a member of the Hadjichristofi family, he operates his department according to the same values which define the Athienitis brand.
“On every level, price is what counts. You can fiddle around with presentation and other tricks of the trade, but what will convince the customer is choice and good quality at the right price. If the wholesale opening price is €2 per kilo, we will most likely put it on our shelves for €1.95 per kilo, or €1.99 tops.”
Athienitis clearly has the competitive edge on price. “One fruit and veg guy from another store – I won’t say which – came in to see what I was doing. He was amazed that we had oranges on at €1.95 per kilo, because he had similar ones on at over €5 per kilo. Whatever extra he may have paid for them, it still wouldn’t have been more than €2 per kilo.”
Michael has no doubt that consumers should be more price-aware when they shop. “Some big supermarkets are taking advantage of the buying public, especially on the imported fruit. And yet, people still go and shop there.
“How much better can imported Merlin oranges be in terms of quality? Do they merit a 100 per cent, or even 200 per cent mark-up? These are things the consumer should watch out for.”
Sourcing also gets the personal Athienitis touch. Michael said: “We almost always buy local produce direct from the growers’ associations – if not, from an individual grower. Some of our suppliers have been with us for 20 years or more.”
Most vegetables Michael sells are locally-produced, but there is a lot of imported fruit. “Depending on the time of year, it can be 50 per cent imported or more. Ten years ago, when we first started selling imported fruit, we were spending C£1,000 (€1,700) each month. Today, we spend at least €30,000 (€51,000) per month. That’s down to two things: first, the volumes of produce needed by the market, and secondly the quality.
“The days are gone when a traditional farmer could grow a bit of this and a bit of that, all shapes and sizes, and expect to sell it all. I think that overall it is a good thing – not because I want to see the end of the small farmers, but because standards are being pushed up by competition.”
The Athienitis philosophy also applies to advertising humble fruit and veg. “Our best advertising is people coming in and then telling others. If you do things right, you’ll get the results. This January, which normally is a slow month after the Christmas holidays, my business was up by 30 per cent – I could hardly believe it myself.”
[TABLE]
The price difference spea
ks for itself
Competition and Consumer Protection Service
Survey of big Nicosia supermarkets, April 29, 2009
Total cost
(same 255 products)
Price indicator
No. of cheapest products
No. of cheapest categories
Athienitis (Pallouriotissa)
€687.69
100
122
14
Carrefour (Mall of Cyprus)
€713.33
103.73
52
3
Orphanides (shopping mall)
€729.18
106.03
45
1
Metro (Lakatameia)
€755.66
109.88
20
0
Debenhams (Makarios Ave.)
€759.47
110.44
24
1
AlfaMega (Engomi)
€780.43
113.49
5
0
Note: Price indicator takes the cheapest retailer as the base figure (100 per cent), then shows the overall price difference as a percentage of the base figure.
