Recession Diet The Next Big Trend in Retail?
Top tips could help you succeed
It seems that food isn't recession proof. Although people still have to eat, the search for a bargain or discount has become even more important as the economy tightens its grip on our nations' wallets. Although the speciality food market has been insulated for the last seven years by a combination of being positioned in a growth market and rising consumer spending, with many businesses enjoying 15 to 30% growth per year – it's now levelling out.
"The ‘Recession diet’ is a trading down across the whole market and applies to all products and people," explains Rob Ward*, fresh from a five-week trip to America where he saw this new phenomenon in action. "High value lines or services that lack either necessity or a wow factor are being scrutinised by our once loyal customers and many regular treats are now becoming seen as extravagant excesses."
He explains that the effect of this is a reduction in average spend, a move from combined ingredients to individual ingredients and a drop in footfall at out of town stores. However, he says that there is a solution and speciality retailers on the High Street are at the front line to provide it. "Don’t wait for it to happen – act now. If you are a producer, think about how this could affect your product range. How can you help your retailers to keep growing their business?" he suggests.
For a retailer, these top tips could help you succeed where others have failed.
- Get your staff excited – enthusiasm is a great compensator.
- Challenge the credibility of all your lines - reduce stock now and clear out lines that aren't selling.
- Make sure you have a base offer of lines that are great value for money – that’s not cheap, that’s value for money. People need to see some deals when they walk in.
- Reduce your fixed costs – get leaner and ready for a famine.
- Start a campaign - show your passion and get involved in something relevant and local to your customers.
- Don’t forget the super premium people – they are going to get (relatively) richer in this market, create exclusive up-grades and services to your range.
- Make use of any PR opportunities.
- Get more relevant to your customers – survey them, ask them what more you could do.
- Think laterally, how else can you sell your existing range? Home delivery, box schemes, catering, supplying restaurants?
*Rob Ward – Has a 20 years of Food Retailing experience, runs his own retail store, home delivery and distribution business in Shropshire. He also works throughout the UK help producers and retailers in developing their businesses. Visit http://www.on-ward.co.uk for more information.
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