Clearance grocery chain growing

RICHARD MEADOWS
Last updated 05:00 16/04/2014
Reduced to Clear

REDUCED TO CLEAR: This basket of basic grocery items cost just over $20.

Reduced to Clear
LAWRENCE SMITH/Fairfax NZ
Reduced to Clear chief executive John Honeycombe says it's a travesty to let good food go to waste.

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The contents of a neglected refrigerator are nauseating - lumpy milk, putrid cheese, blackened and rotting vegetables.

But far more stomach-churning is the thought that truckloads of perfectly edible food are going to landfill every day.

Until recently, that was the fate of most food items which languished in warehouses without being able to find a refrigerator to call their own.

Enter Reduced to Clear, a chain of clearance grocery stores that set up shop in 2008 with a single part-time outlet.

"It was a travesty that really good food was being wasted," says chief executive John Honeycombe, who was also one of the original partners in the business.

Like white mould spreading through a yoghurt pottle, the chain has largely lurked in the background, quietly expanding its dominion.

Now there are 14 stores across the North Island, and plans to push south onto the mainland.

You might turn up your nose at the notion of eating food that frankly, has seen better days, but there's no such snobbery among Reduced to Clear's clientele.

The chain now gets close to two million customers a year, including 100,000 "VIP" patrons who receive emailed alerts of the hottest deals. 

In the east Auckland suburb of Botany, Reduced to Clear is doing a steady mid-morning trade.

Shoppers wandering the floor are not confronted with floor-to-ceiling aisles and fancy product stands, but stacked cardboard boxes and wooden pallets.

"We're the only company in New Zealand like this," says Honeycombe.

The Ministry for Primary Industries (MPI) confirms that what he is doing is perfectly legal.

The confusion arises with the best-before, use by, or expiry date labels that you will find printed on most food items.

According to MPI's Foodsmart website, best-before dates are about quality, not safety.

"Foods can usually be eaten after this date, they just might not taste as good or be as nutritious."

An expiry or 'use by' date is different. It is not safe to eat expired food, and it is illegal for supermarkets to sell it.

Honeycombe says best-before dates usually have a reasonable buffer built into them, depending on storage.

Canned foods and preserves, for example, will often last for years after the date on the label if they are kept in good condition.

Even so, every product gets taste-tested by staff before it goes on the shop floor. Honeycombe has just been sampling a new range of muesli bars.

He says there are few complaints about quality, although "the odd thing might slip through".

For customers who are left with a strange taste in their mouth, there's a 100 per cent money back guarantee.

The chain also deals in end-of-line goods, cancelled export orders, changes in packaging, or suppliers who have an unexpected glut.

While it is increasingly supplied by locals, there are also all sorts of unfamiliar brands that have been parallel imported from various countries.

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Honeycombe says the goal is to sell products 50 to 70 per cent cheaper than standard retail prices.

With the stock is constantly changing, each deal is assessed individually.

"We work off the 'wow' factor," he says. "If we think it's going to be great, the customers will too."

A basket of everyday-type supplies including cereal, veggies, sausages, sauce, noodles and rice (as pictured) costs a little over $20.

Roughly equivalent products priced at Countdown come in at just under $30.

But that is not taking into account the super specials, including the weekly Monday "shout out".

These first-in, first-served deals are an eclectic mix. In recent weeks, 99c would have bought you 1kg of preserved peaches or 1kg of sugar.

Two dollars would buy you 1kg of laundry powder, and $3 would get you three Old El Paso sauces, or 800g of pineapple lumps.

A lot of the jaw-dropping deals tend to be on junk food; chocolate, lollies, chips, soda pop, energy drinks.

In store, there are mountains of the sugary stuff piled up. While that is no different to most supermarkets, most supermarkets don't sell 2kg sacks of jelly babies for $5.99.

That being said, there are plenty of healthy foods, including fresh fruit and veggies sourced from end-of-day Turners and Growers auctions.

There is no wilted or mangy produce, but there are some oddities. Honeycombe opens a 10kg sack of spuds ($4.99) and hauls out a single potato the size of a small child's head.

As he points out, it makes little difference for cutting up and mashing or roasting.

The store's freezers contain big packs of pre-cut veggies popular with restaurants (1kg of broccoli florets for $3) as well as fish, finger food, and assorted icy confection.

Staples like milk, coffee and rice are always in stock, but there is usually only one brand available, and it's not necessarily priced as sharply.

The best deals are the ones that change every week, and Honeycombe says customers are good at discerning true value.

They will turn up their nose at something slightly over-priced, and then stampede to fill their trolleys if the price drops by even 25c.

What all this means is it would be difficult to replace the supermarket shop altogether, unless you were willing to eat a strange and flexible diet.

Replacing supermarkets is not what Honeycombe wants to do.

When Reduced to Clear was starting out, it won the support of heavyweight brands Cadbury and Bluebird.

While other suppliers feared reprisals from the supermarket duopoly, Honeycombe says they have grown more and more confident over the years.

Though Reduced to Clear shoppers are increasingly supporting local suppliers, they are no longer supporting a locally owned company.

The whole outfit was bought out last year by the local arm of Bidvest, an international investment group that specialises in foodstuffs and distribution.

Honeycombe will stay on as boss as long as he wants to, and says he would like to expand to 50 stores over the next 10 years.

The challenge for the chain is to stick to its knitting and avoid trying to become all things to all people.

And of course, its future success also relies on consumers getting over their aversion to eating food that is not quite in its prime.

Honeycombe is confident the big savings will win them over in time.

"All of New Zealand wants cheap food. Why wouldn't you?"

DON'T TAKE RISKS

Consumer New Zealand says up to 500 Kiwis fall ill with a food-borne illness every day. Here are its top tips for avoiding the nasties and keeping the contents of your stomach safely where they belong:

- Never taste food that looks or smells strange. If in doubt, throw it out.

- Divide perishable food into small portions and freeze for later use.

- Keep your fridge between 2 and 4 degrees Celsius. Older fridges frequently run at higher temperatures.

- Replace poor door seals, which stop a fridge from maintaining its temperature.

- Don't jam food in. Air should be able to circulate, to maintain an even temperature.

- Separate raw meat from other raw and ready-to-eat foods.

- Defrost food in the fridge, not on the bench.

- Keep foods in the fridge covered with cling film or in containers with watertight lids.

- Throw out refrigerated leftovers after two days unless they have been frozen.

- Fairfax Media

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