Decline in trade
Over the past 5 months or so we have seen a steady decline in both income and the number of customers - so much so that we have lost some 25% of weekly income compared to a similar period in the previous year. The effect of this was that we had to dispense with 2 paid staff and concentrate more on using volunteers. We are told this decline is a direct effect of the current economic crisis in the country and not something we are doing wrong! Can any other community shops confirm this general problem? We do not have a post office or tea room.
This does not tally with our experience, where we have seen fairly steady growth over the same period, although I don't think our shop is typical.
I would be interested to learn what you have been doing in terms of marketing your shop to your target customers over the last 6 months or so, and if you have done any research to find out why you have been losing customers.
It may be partly down to the economic climate, but 25% is a very dramatic drop in trade over a short period. It may be that its seasonal, do you know how sales are versus the same time last year? And if you are selling food, people still need to eat whatever the economic climate! A few suggestions. Have a look at the competition, who are they, have they done anything differently over the last few months, even if its not nearby, is there a new shop / supermarket (even a small one) on a major route that people are popping in to on the way home from work? What categories are you seeing the biggest decline? if its food, can you do something to lower prices, do special offers,or bring in some cheaper brands?
Hello Bryan, it is possible this is related to the economic downturn, but it doesnt mean you cant do anything about it. It would be worth having a read through the Plunkett Foundation advice sheets - particularly 'improving profit margins' as well as considering a consultation questionnaire with the local community to remind them that you are there, ask them what goods and services they would like and ask about preffered opening hours etc.
Additionally, Plunkett currently offer two forms of face to face retail support through a Mentoring service and an Enterprise Support programme - both form part of the Making Local Food Work Programme. The Mentoring service can offer 3 days of an experienced practitioner from a community shop who can share their knowledge and experience with you over a 6-month period and play the role of critical friend or 'buddy' for a period of up to 6-months. Perhaps, even more useful for you intially is the Enterprise Support Programme which offers upto 5 days of intense business advice and support and can focus on issues relating to finance, marketing, business planning etc. Plunkett are currently working with a number of community shops through these programmes and although the focus of the support is different for each community shop, the outcome is the same which is to help the shops increase turnover, profit and margins.
If you would like to discuss, please call me at the Plunkett Foundation on 01993 814375.
My thanks to all who responded to my posting - I will be following up the Plunkett proposal. Over the past month we have seen what I believe to be a bottoming of our apparent decline in sales. We have done a lot of work in trying to understand our market place including surveys, leaflet drops and a regular newsletter. We are a very rural village pop circa 700 with no other services in the village (post office vanished last year) and a distribution of families roughly 50% younger working families with children, 25% incomers mainly retired, 25% long term locals. The working families travel of necessity at least 20/30 miles to their jobs and always pass a major supermarket whichever way they go! Inevitably they will shop in those places.
Our community store focusses on local food from local suppliers and represents some 60% of our buy with the balance from Bookers and the like. We always try to introduce new products at least monthly and have events such as coffee mornings/tastings/special displays etc. Because we were hit by dropping sales we had to lose 2 paid staff and are now very dependent on volunteers for a whole range of activities. We have one part time paid staff who focusses on essentials like H&S and standards etc.
As we have now reduced our cost base it may be that we can now increase our product range and attract more folk back to the shop. We started a campaign to spend just 50p more each time you visit the shop - with some success so far.
We are also part of the Local Food initiative and will be taking up the offer of consultancy support in the near future - in the meantime we fight on and I am sure we will survive and emerge for the better!
Once again thanks
I spotted this article today - a useful reminder for shops when they are focusing on sales and marketing, collating information, producing posters, notices, memos etc. - all of which can help to increase footfall, activity, participation and trade! I hope you find it helpful.
If you want customers or members to fill out a form or volunteer their time, writes Roger Dooley at the Neuromarketing blog, "you will be more successful if you describe the task in a simple, easy to read typeface."
The reason? When something can be completed in a shorter period of time, people are more likely to comply with the request— less complex fonts create the impression that the task or request will be achieved more quickly.
Dooley cites research by Hyunjin Song and Norbert Schwarz, who asked two groups to estimate the amount of time required for identical exercise regimens.
The first group read instructions in Arial—a simple, streamlined font:
For the second group, Song and Schwarz used the much-fussier Brush font:
"The results were astounding," notes Dooley. "The subjects who read the same instructions in the hard to read font estimated that the regimen would take nearly twice as long, 15.1 minutes vs. 8.2 minutes."
The Po!nt: When you're asking customers to do you a favour, increase your participation levels by using a simple font that reduces their perceived time commitment.
Source: Neuromarketing
Dear Bryan
Have you considered offering postal services from your shop? You won't earn income from them but you might re-vitalise interest in the shop. By campaigning for the cost of setting them up, you might get more interest from your customers.
We run a Post Point from our shop - see www.theshopatstroodgreen.co.uk - and you are welcome to contact us directly if you would like more detail.
Best wishes
Helen Melia
Thanks Helen,
We do have a mobile post office that calls in the village, but I will certainly have a look at your suggestion. I love your web site and the content and would very much like to visit your shop. Although we are in North Herefordshire my family live in Hailsham and Tunbridge Wells so on my next trip down perhaps I can arrange to come and have a chat?
Regards
Bryan Casbourne
Mortimer Country Stores
Anytime Bryan, would love to meet you!
Helen
The Plunkett Foundation is currently sponsoring visits between 'community food enterprises' which ultimately includes community owned shops. We are able to pay a flat fee of £175 for visiting organisations, and £300 for host organisations. For any shop that is interested in visiting and learning from the practices and ideas of another shop - please get in touch - 01993 810730.
We were a bit concerned about a slight drop in business in January but nowhere near 25%. The snow then reminded everyone in the village how useful we were. However, we were aware that we had a reputation for being over-priced in general but, on analysis, felt that this was because of our high prices on milk and fruit and veg in particular. We found a new and, incidentally, more local supplier of milk which allowed us to sell at prices much closer to those of shops in nearby towns and villages and we reduced our high mark-up (to cover waste) on fruit and veg to a more reasonable 25% to 30%. It was no surprise that it is the prices of milk and some vegetables that people tend to remember more than prices of other products. Sales are now steady or even slightly up on last year.
We have also been helped over the past 12 months by our decision to go directly to the distributor for our newspapers rather than providing a zero profit service to our customers by buying in ordered papers from a nearby village. We found Menzies to be very helpful to us and waived certain minimum quantity parameters in view of the fact that we are a community enterprise. As a result we are now selling over 50% more newspapers as well as making a reasonable profit on them.
Arthur Grosset
Monks Eleigh Community Shop
Wow! 25 - 30% mark-up on fruit and veg. This seems low - or do you mean a 25 - 30% margin?
OK, so fruit and veg is our biggest product range, and therefore it is sensible for us to buy direct from the wholesale market (and are probably buying at much better prices than you can get as a result), but we mark-up by anything from 50-130%, achieving a margin overall of something like 50%. And we remain competitive with supermarket fruit and veg prices.
The recommended guidelines issued by Plunkett is to mark up fruit and veg by 60% with an aim to achieve a 37% margin, but ultimately this will depend on size of your shop and local issues and circumstances etc...
Interesting. Can I ask on what basis the guidelines have been developed?
When we took over our shop we spoke to a number of greengrocers about their margins, and pretty much across the board the response was along the lines of: "As a rule of thumb we mark up by 100%".
I did mean 25 - 30% mark-up.
I should have mentioned that fruit and veg is a very small part of our range and sales. This is partly due to the fact that we have very limited space and partly to the fact that we are within 3 miles of one of the best farm shops in the county. It felt uncomfortable selling oranges at 40p when down the road they were selling at 32p. We calculated that a reduction in margin might help our stock-turn and might reduce our reputation for being expensive without having a great impact on the bottom line.
I think that the Plunkett guidelines on mark-ups have to be modified depending on individual shop's circumstances.