‘Retail is a ruthless game’: What Barbeques Galore CEO Angus McDonald has learnt in his 20+ year career

Barbeques Galore chief executive Angus McDonald took his first step into the world of retail as a school boy, working casual shifts at Safeway supermarkets (now owned by Woolworths), before entering a trainee management program with the company.

From there, he took an opportunity to jump over to the Super Retail Group — the owners of Super Cheap Auto, Rebel Sports, and BCF — as an area manager for Victoria before being plucked to lead the company’s New Zealand business. He led some of Super Retail Group’s B2B, merchandising, and e-commerce divisions before moving into his current role at Barbeques Galore.

He called himself a “dyed-in-the-wool retailer” when I caught up with him for an interview discussing his career, and how the sector has changed throughout his 20+ years.

Along the way, McDonald has had promotions he admits he was “massively underqualified for, and too young for”, each giving him new experiences.

Over the past year, Barbeques Galore has closed 14 stores, and opened seven new stores, trying to achieve a better return per floor size across its franchises and corporate controlled locations. This includes its switch from the Supa Centre in Sydney’s Moore Park, reported to cost $1 million per year in rent, to a smaller premise in neighbouring Alexandria.

At the time of our interview, the company had 38 franchise stores, and 50 run by the head office.

McDonald explains the strategy behind the decision, and how the company’s e-commerce growth picked up by 40% over the past year, reaching $10 million in sales, 8% of its total expected revenue of $170 million, rising to $200 million when taking into account its franchise stores.

That was helped by major investments across its ERP systems, fulfillment back end, and customer-facing online store from owner Quadrant Private Equity, which the AFR claims is now looking to sell the business. SmartCompany Plus contacted Greenstone Partners, the purported sellers of the business, and was told they could neither confirm nor deny the sale.

From managing merchandise, suppliers, marketing, supply chains, and his everyday practices, McDonald shared the tough lessons that come through mistakes, and how he developed his leadership style through trial and error.

Five key takeaways

1. You can’t ignore what’s happening in your business right now under the guise of ‘being strategic’.

2. Leaders shouldn’t try to be the smartest person in the room, but instead provide clarity of direction.

3. No one comes to work with the intent to do a bad job, if a team member is underperforming, you need to examine your own leadership first.

4. Taking opportunities where you’re out of your depth is the best way to grow as a leader.
   

5. Retail has changed dramatically, and you need to cater your physical stores to deliver an experience, not just cater to the rational drivers of buying.

How has retail changed over your career, including the value proposition of physical stores?

Customer expectations have changed. Once upon a time it was focused on rational drivers: range, pricing, give them information and they can make a decision.

Now, the rational parts of the process are addressed by the research people do on their couch at home. The role of physical stores has changed completely. It is no longer just about the rational parts, they are looking for an engaging experience: to be inspired and educated, and they want to speak to someone who knows more about it than they do.

It’s important for us that we have a well-connected experience, right through that journey, from early research online, to the experience created in store, to everything after that point.

If you look under the surface of the shift to e-commerce, we’re in a borderless world with retail.

You used to compare with the person across the street, now it’s compared to a global standard. It is easy to see what’s happening in Europe, North America, or anywhere else. With that, people’s expectations of their retail experience is changing in Australia as well.

On store closures and consolidation:

Barbeques Galore opened its first store in 1977, it has a strong legacy and brand in the Australian market.

But, it’s a business which over time has not changed. If you walked into one of our stores two years ago, it would look the same way as it did 15-20 years ago. 

We need to have a much more strategic approach to thinking about where our store network is located, and the style and format of the stores.

In 2019, when I joined, we had a number of stores that weren’t right for our network anymore. Some were too large, others in the wrong places.

We moved quickly to close a number of stores, relocating and downsizing others. 

It’s about having the discipline to use our retail space productively. Once upon a time, retail was a cookie-cutter model: you would keep minting out new stores, and that would be how you drive your sales growth. 

Now, the market has higher expectations. You need a more strategic approach in how you present your offer. 

You can be more efficient in how you are deploying capital, you can present a much more curated assortment of products, less inventory, in a tighter footprint, but deliver the same sales performance and customer experience.

A new retail experience: Angus McDonald (c) with retail staff. Source: supplied

What have you changed over the past year for your business to lead to measurable improvement?

We have seen a 40% growth in online sales over the past year, but we know there is opportunity for more. Currently 8% of our sales are online vs in store, and two thirds of online sales are click and collect. So even when they’re purchasing online, they’re looking for the experience of visiting the team in the local store as part of their journey.

We’ve invested in systems that let us be an omni-channel retailer. That’s about the integration between what we’re doing digitally, and in store.

Last year we implemented our new ERP system, which is an important base you need to have in place first, and Fluent Commerce, which coordinates order management and fulfillment.

Now we’re working on the customer-facing component, Salesforce Commerce Cloud, which delivers improvements in the performance of the website both technically, and for customer experience. It helps with the search, navigation, and selection of products, along with visibility of real-time availability of products. So people on the product page can see clearly what inventory is available in their local store, or options for delivery to the store/home.

It’s all done in real time.

With Salesforce, we have the ability to much more accurately tailor what you see on the website based on the things you’re interested in. That allows us to deliver a much more personalised experience.

If you’ve just bought a brand new barbecue, you would be much more interested in accessories, rubs, or sauces for example. It’s about tailoring a more relevant experience, based on your interactions at that point.

What are the best/worst pieces of business advice you’ve ever received?

Best:

You can’t expect to have engaged customers if you don’t have engaged team members. That recognises how important the people in your organisation are. If they believe in their brand, job, and work, that will translate into how they deliver a great experience to your customers.

Worst:

Some people believe you need to really slow down and take a considered view, focusing on long term outcomes at the expense of short term outcomes.

But retail is a ruthless game where every single week counts. You need to be across the detail with your fingers on the pulse every week. The retailers that get themselves into real trouble are the ones that focus on the long term.

You can’t ignore what’s happening in your business immediately by using the excuse of being strategic.

What’s the most counterintuitive thing you’ve learned by running a business?

In most people’s careers, the apprenticeship model is where you work in a role or function, become proficient at that, and then get promoted to running a team.

Often, your boss is the person who happens to know more about it than you do. It is a top-down approach, in terms of knowledge and expertise being transferred throughout the organisation.

But leadership is much more about getting the most out of the people in your organisation.

You can’t be in a room and try to be the smartest person. As a leader you’re trying to get the most out of the other people in the room.

You often see people who find themselves in leadership roles who suffer in that shift of thinking. It is no longer about what you think is a great idea, it’s about making sure you’re listening to and drawing the most from all the people in the room who are right in the details and close to the operations in the business.

You’re there to provide the light on the hill, and the clarity of direction. Getting the most out of the team is how you drive performance.

How do you know when it is time to fire an employee?

You need to start with the view that no one turns up to work and says, “I’m going to come in today and do a bad job”. Everyone wants to perform well at their jobs. If they’re not performing for one reason or another, you need to find that reason. 

Usually, as a leader, you need to start by looking at yourself.

Have I given them the right direction and clarity or where we want to go? Have we provided them the right support?

Typically, when a person becomes disengaged or isn’t performing well, there are things that could have been addressed from a leadership perspective, rather than treating people as disposable if they’re not performing.

Provided there is genuine intent for them to succeed, as a leader your job is to support them and let them get there.

While you have to be supportive, you can never walk away from having clear standards about what good performance is. Make your expectations clear, make sure people understand them, and that you stand by them, while giving your team the right support. That delivers the best outcome.

When that outcome is no longer achievable, it becomes evident to everyone involved. Typically you find that people are pragmatic about these things, rather than firing muskets at 40 paces when dealing with an area of the business that’s not performing well.

Knowing what you know now, what, if anything, would you do differently?

I don’t think I would do anything differently. I’ve had lots of great opportunities, I’ve been lucky that they’ve come at the right times.

Make sure that when those opportunities present, you have to go after them. They’re often hard choices, you’re making decisions to do something that isn’t comfortable, or natural.

You need to push yourself to go after the new and different opportunities along the way, they’re the times of your career that you experience the most personal growth. 

I’m lucky that I’ve had a number of those, and they’ve helped me to grow into the leader I am today, and will help me continue to grow as a leader.

The responses have been edited for clarity and length.