Farm Retailing Moves Forward
Posted by Paul Hargreaves on
The general feeling of buoyancy about last year (despite the recession), would have been even more optimistic had many of the retail outlets not been hit hard by the snow at the start of January. There were stories of new farm shops that had reached a turnover of over £1million in their first year and several more established shops reporting turnoves in the region of £3-4million.
I think it is true to say that this sector is no longer an interesting sideline to the high street, but an important part of food retail in the UK. (Just as well really as our business is built on it – and I have just put into place growth plans of 60% over the next two financial years)
Authenticity and growth
Clearly to be a genuine farm shop there should be some of the farm’s produce for sale within the shop whether that be animal or vegetable. There should also be other locally sourced products, possibly from other farms in the area or artisan local producers.
However, let me sound a warning bell here. Many of those shops that limit themselves exclusively to local produce are not growing and developing as they might. That may be fine if the shop is a lifestyle business, but to get into the realms of £multi-million turnovers, it is important to stock those products that consumers expect to find in a speciality food shop.
Stocking extras, which may in some cases be 50% of the stock of the shop, enables the retailers to increase the basket spend per customer. I was shocked at how low these average baskets were – generally ranging from £12-£20 from those who spoke up in the seminar. Increasing the range of products in the store should surely manage to add 50% to these baskets and markedly increase profitability.
Another clear strategy for a “winning farm shop” is to have some products made in store e.g. a bakery. This dramatically increases the “realness” of the shop and encourages customers to spend more. One farm shop gave the example of meat pies. They used to buy these in locally but when they invested in some equipment and started making their own, sales increased threefold.
Share