Retail and the Recession

Far from being a time of doom and gloom for speciality food retail outlets, the recession can be a time of boom. Whilst spending on larger items such as cars and widescreen TVs may diminish, it has been shown that in previous recessions, gourmet food suppliers have seen an increase in customer spending.

So far in 2009… we have found the following to be the case at Cotswold Fayre.

Judging from the first three months of 2009, retailers that buy in new lines and merchandise are continuing to do very well this year, despite the recession. Our own fine food wholesale business was more than 15% up on 2008 in the first quarter of 2009 but only with around 5% more orders.

This shows to me that the successful retailers are buying in more and selling more than they were last year. Having said that, some speciality shops are struggling. Here are possible reasons why some retailers aren’t enjoying the recession and ways to combat the negatives:

• A perception that they are expensive. It is true, some farm shops and delis have charged too much for what are perceived as everyday items (e.g. condiments, pasta and jam) – and their prices need to come down. But in many cases this is not the case and an easy way to dispel the myth is to display cost comparison signs e.g. Yaxham Waters Farm Shop in Norfolk

• Poor Merchandising. It is unclear to the consumer walking into most speciality retailers which are their star products. If you believe in a product then make it obvious and “stack it up” – Wholefoods are a great exponent of this art.

• Being too cautious in stocking new ranges. Shops need to be exciting even for their regular customers. Buy in new products, display them well and ensure that customers can taste them. Producers and wholesalers are always more than happy to supply extra free stock for tastings.

• Employing the wrong staff. Too many retailers employ too cheap. Paying a little more can get you much better quality employees who will actually “sell” – rather than just standing at the checkout looking bored. They will recommend items and offer complimentary products to the consumer. They are worth their weight in gold – literally!

• Back to the first point – ensure there are always some products that are on promotion. If the first display the customer sees when he/she walks into the store is an offer, they will be likely to buy more of other products.

In summary, retailers can all make money during this recession, improve their strategies and come out of it in 2010 with much more profitable businesses.