Should you add a cafe or restaurant to your retail offering?

26 November 2023, 07:00 AM
  • Adding a restaurant, cafe or bar to a fine food store or farm shop is a huge investment. Is it worth the risk? Speciality Food speaks to retailers who’ve made the leap
Should you add a cafe or restaurant to your retail offering?

Diversification is often key to small business survival, and artisan retail is no exception. For many, an obvious way to boost revenue and create something a bit different is by adding a dining option. A cafe or restaurant can make venues more attractive to customers, increase dwell time, and ultimately up a total spend. However, it isn’t necessarily an easy task, bringing with it a whole array of considerations, and upping the workload of an already busy artisan retailer’s life. 

Making the most of what you’ve got

For Mat Grindal, owner of Manor Farm in Catthorpe, Warwickshire, it’s worth it to help the business compete with bigger rivals. The Grindals have been farmers for generations. Their 200-acre farm produces rare breed meat, fruits, potatoes, asparagus, pumpkins and more, all sold in their farm shop. On top of that, the family has a thriving restaurant, offering everything from breakfasts, lunches and afternoon teas, to special events - all showcasing their unique produce and homemade products.

“Food production is hard, and with the cost of production - electricity, ingredients etc - it is even harder to compete with anything mainstream,” says Mat. “We are lucky as we grow and rear a lot of our own produce, which gives us huge benefits in quality and taste, but can mean we are at the mercy of the weather and production variables. We either have a glut or famine. The best way to combat the glut is producing quality products in store, so we serve them in the restaurant, making pies, cakes, jams and whatever else we can think of.

The split between customers visiting the shop and those coming to the restaurant varies, he says. “I would guess 70% use both. We have some who eat in the restaurant regularly - at least once a week - and only buy a few bits, especially our produce like asparagus, strawberries, and homemade cakes, and others who do a full shop but only ever have a cup of tea in the restaurant. They definitely work together, the shop and restaurant, but it’s hard to pinpoint a pattern. Lots will only visit either the shop or restaurant one day and then the other one the next time they visit.”

The combination of retail and dining can help promote sales, Mat suspects, though he admits it’s better when people browse the retail side first, as they tend not to shop with a full stomach. “But yes, it certainly makes a difference long term,” he adds. “Someone may come and have a full English one day, then come back another just to buy the sausages or bacon. Tastings are the best way to sell - a little of something to tease the taste buds, then they buy.”

The power of the upsell

Manor Farm isn’t the only business to see its retail side augmented by a dining offering. In the Lake District, Yew Tree Barn combines a retail business that sells antiques, salvage and homewares, with carefully selected wines, local beers, ciders and spirits and locally-made condiments offered through Harry’s Cafe Bar. Most of the drinks stocked in the shop are available in the cafe, explains owner Harry Wilson, while many of the condiments feature in the dishes served there too. “This means that our customers can sample and experience a number of our retail offerings in a culinary context for themselves. This integration allows customers to discover new products.”

Combining the café experience alongside homeware, kitchenware and food and drink offerings is a “multi-faceted experience” with customers able to enjoy a meal, explore retail products, and potentially buy items they’ve found and maybe tried during their visit, says Wilson. “Even selected tables and chairs in the café are for sale, which in effect allows customers to try before they buy, so combining the two aspects of the business in effect presents limitless possibilities.”

At Somerset-based Teals the same concept applies, combining a shop stocking a range of artisan foods with a restaurant, as well as a food-to-go offering using local seasonal produce. Founder Ash Sinfield, says the decision to combine retail with a restaurant offering was about finding different ways of showcasing the products they offer. “It gives us more opportunities to celebrate these local products across different touchpoints,” she tells Speciality Food. The same goes for Ruaridh Hesketh, who runs Galloway Lodge in Dumfries and Galloway. “We make preserves and condiments, and combine our coffee shop menu and retail space to maximise sales as best we can.

“It is a great way to showcase our products and you can get immediate feedback from the end user on a product instead of putting it on a pallet and not knowing what is happening.”

In with the new

Showcasing new products, in exactly the way they should be served, was part of the reason Georgonzola, a deli in the Ribble Valley, Lancashire, added a dine-in option to supplement retail. “When we opened our shop in Clitheroe just over two years ago, we wanted to make sure that we established the delicatessen and retail business first, but the option to dine-in was always in the back of our mind,” says owner George Hammond. 

“The Ribble Valley has the most incredible food and drink scene, and as a result there’s a lot of innovation, and businesses are constantly trying new things and seeing what works.” After a year of trading, with clear appetite from the loyal customer base, they added a sit-in option, including bespoke cheeseboards accompanied by wine. “By putting out tables and chairs and giving people a chance to relax in good company, we realised that we could create a welcoming and informal atmosphere where our customers could try new products that are perfectly conditioned at a low entry cost,” says George. 

“This then helped them make informed decisions about the products they want to take home. Because of the shop’s layout, there were spaces that initially felt a bit redundant, but have since been reimagined as cosy little spots. This also means that our space has a more consistent atmosphere and regular characters aside from myself.”

Such a step allows the deli’s customers to enjoy products at their “absolute best”, explains George, as well as giving them the chance to sample items they may not have tried before. “I also think that it helps our customers imagine how they would use our products at home,” he adds. “We’re able to provide serving suggestions and create certain pairings. A good example is the Crooked Pickle Co’s Korean Pickled Garlic, which pairs incredibly well with a mature Cheddar.

“Since giving customers the chance to try it with a glass of wine and some other distinct products, we’re selling more of both together.” For him, a growth in diners does appear to relate to a general growth in sales. “Now, this might be that after a nice glass of wine or a hearty stout, you’re more likely to treat yourself. But I do think that it’s because we can give our products a bit more of a showcase, which is difficult in a purely retail environment. I also think that people will want to recreate the Georgonzola experience at home.”

Overcoming challenges

Santa Putnina and her sisters opened Deli by Dirty Crunch in Croydon in August 2022 after running a pop-up kitchen for two years. She refers to it as a ‘social eatery’ - somewhere people can buy artisan produce from all around the world, from Kim Kong Kimchi made in Harringay, and Dr Stings Hot Honey made in South-East London, to world-famous Ortiz sardines from Spain. But with uncertain economic times making artisan produce a ‘treat’ for many, surviving just by selling retail items is “close to impossible”, she says. With that in mind, they now offer artisan coffee and a small plates menu, as well as running wine tastings in collaboration with a local wine school. 

The advantages are clear, with the biggest being increased retail sales. “All dishes on the menu include at least one item they can purchase from our shelves. This also helps to build trust with our customers. For example, we use Isle of Wight confit tomatoes on our salad. They are £7 retail, which might seem a lot to some, but then once you have tried them, you understand what you are paying for and that it is well worth it. The same goes for hot sauces, kimchi or even smoked salmon.” But that doesn’t mean such a move isn’t without its challenges. 

While adding artisan coffee to their offering has improved customer count, Santa advises others to think carefully before doing the same. “It is a huge investment at the beginning, and with so much competition out there, you really have to be confident in your roastery. Think, why would people buy your coffee instead of going to the next door neighbour? Also, how are you going to bring that message across to your customers?” In addition, adding a summer plates menu to a deli offering can put a question mark over what the venue actually is. 

“Our regular customers understand that this is an addition to our retail offers, however this is not necessarily the case for new customers – they tend to call us a café. Truthfully, it is very hard to bring that message across and we are still figuring out how best to market this balance.”

Making sure you have the right buy-in and approvals from various authorities can also be a challenge, says George. “Before we even started letting people sit in, we did have to make sure that we fully engaged with the council and the licensing committee so that they understood exactly what the offer was, and this was something that took a little time. We did have to convince them that we weren’t converting our shop into a wine bar, more that we just wanted to offer people the chance to have a glass of wine.” 

Like his fellow retailers, the added workload of welcoming diners is tough for a small team. “Georgonzola is quite a tight ship,” he says, “with only myself in on most days or with one more member of the team in on Saturdays. As a result we do have to work hard to ensure that everyone gets the experience that we would like. Particularly when we get a rush of diners in. There’s a balance to be struck between keeping our retail customers happy and the people sitting in.”

His advice is to keep things simple. “Extensive menus or wine lists that number into the hundreds of items don’t help with the kind of experience we’re providing. Aligned to that, we do make sure that people can have an entirely bespoke experience, with cheeseboards made up in front of them.” This level of personal approach - including making notes on what customers enjoyed in-house so the team can recommend cheeses they might like to take home - is also something he tries to provide at Georgonzola.

For Mat, the best lesson he’s learned at Manor Farm is to “stick to what you’re best at”. “Pies and cakes are what we are really good at, they sell in the shop and the restaurant.” For him, ‘story’ is key to encouraging customers to buy, whether that’s in the retail side of the business or the restaurant. “For us that story is straightforward - we are farmers that produce wholesome seasonal food, and want people to enjoy it at home or in our restaurant. The pies and cakes really fit into this. My advice to anyone is do what you love with food, tell the story of why you love it and people will connect with it.”

Being creative in the current climate is key to survival, says Santa, who advises anyone who is thinking of providing additional offerings alongside retail to ‘do it’. “But be smart about it,” she says. “Do your research, speak to your customers to get a feel of what things they want to see. Do not invest a huge amount of money if you are not certain, but most importantly – give yourself and your customers time to adjust to the new direction of the business. And do not be afraid of failure, it just makes you stronger and wiser.”

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