Farm Retailing Moves Forward

I have just come back from Farm & More Conference, where there were record numbers of delegates and a thriving trade show alongside it. There was a general feeling of buoyancy about last year, despite the recession, which 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 over £1million turnover in their first year and several more established shops now trading at £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!

It also became clear to me through talking to delegates and generally observing what is working, and what isn’t, in farm shops throughout the UK. 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 multi-million £ turnover levels, it is important to also stock those products that consumers expect to find in a speciality food shop. Stocking these 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 psychologically 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 by more than three-fold.

No rest for the wicked. By the time you read this I shall be in Cologne at ISM (European confectionery and bakery show) shopping for next Christmas. Well, we have had the luxury of not thinking about Christmas for a month – and that’s it!!