We asked leading industry figures for their views on what the coming year may hold for the farm shop and deli market
Opportunities
Emma Mosey, chair, Farm Retail Association
Consumer confidence is on the rise. As the economy improves, consumers will feel less concerned about their cash spending and will prioritise spending time with friends and family. Farm retailers are less about convenience and more about experience, and as people have more money, we have an opportunity to welcome more customers through the doors. They will expect personal service and an exciting shopping and dining experience, and we have a great opportunity to offer something different.
Paul Hargreaves, chief empowerment officer, Cotswold Fayre
A clear opportunity for independents is to increase the theatre and experience of shopping for food. At the same time, this will educate and inspire people to buy better food and be more creative in their preparation of meals.
There exists a huge gulf between the supermarket shopping experience and buying food at a farm shop or delicatessen. It wasn’t that long ago when most supermarkets had tasting events and knowledgeable butchers, cheesemongers or fishmongers. These counters have now largely disappeared, and the supermarket shop has become a purely transactional (and lonely) event.
If Covid has taught us one thing, then it is that humans love community. We need those regular interactions with others for our mental health, and shopping for food and drink provides a regular opportunity to do that.
Alongside that vital function, there is still far less knowledge about food than in our grandparents’ generation, so creating theatre and experience will not only encourage customers to spend more but will help them and their families eat more healthily and adventurously too.
Matt Whelan, managing director, frozen food supplier Fieldfare
The modern shopper is more health-aware, sustainability-oriented and inclined to support their local economy than ever before. This has led many to rediscover their local speciality stores and farm shops. While still budget-conscious, they are looking for good value, rather than simply cheap products, and are unwilling to compromise on quality. Independent retailers are adapting to embrace this change by adding products such as premium frozen foods to their range, which is proving to be profitable for many.
While shoppers are cutting back on big-ticket items, many still want small, affordable treats such as brunch goods for the weekend or a pop-in-the-oven restaurant-style midweek supper. This is where premium frozen excels.
New concepts such as loose frozen foods offer an opportunity for discovery as shoppers can pick and pack as much or as little as they like of any of the products. Loose products are ideal for one or two-person households, which are on the rise, as they do not need to buy large, pre-packed quantities. The concept is also popular with the sustainability-aware as a no or low-packaging alternative to bagged pre-packed goods.
Stefano Cuomo, CEO, Macknade Food Hall
Retailers have an opportunity to offer deep storytelling and a layered experience. In a tightening personal economic environment, customers will be looking for added value, and the personal and sensual experience we offer in our sector will add value to pricing structures that provide the required margin. People are also looking for leadership on core universal narratives – social and environmental impact – and well-communicated and sincere narratives will draw in customers and support those we already have.
Challenges
Emma Mosey, chair, Farm Retail Association
Having spoken to members recently via a survey for our upcoming rebrand, staffing costs, recruitment and retention have ranked as farm retailers’ biggest challenges. The increase to minimum wage in April will be a huge challenge financially too, after two years of cost increases across the board. If farm retailers can weather the difficult business environment for a little while longer, things should start to improve and become easier.
Paul Hargreaves, chief empowerment officer, Cotswold Fayre
It is all too easy for consumers in a farm shop, food hall or deli to choose not to buy products because “I can buy something similar in the supermarket”. Sometimes prices seem high and there aren’t enough obvious reasons to buy.
The cost of living challenge will remain in 2024, and the downwards pressure on basket spend due to economic conditions could well become worse. So, it is even more important to give consumers a reason to buy better-quality food. Retailers that don’t interact with customers and give them the information their customers need may struggle. Good point of sale and good shop assistants help enormously here.
Suppliers have a part to play here too. If they supply supermarkets with some lines, ensure that indies can still make a margin, offer generous promotions, and come in and do in-store tastings. Symbiotic partnerships with suppliers and wholesalers rather than transactional ones will mitigate the pressure on price and allow farm shops and delis to grow and develop in 2024.
Matt Whelan, managing director, Fieldfare
The economy remains the top concern for farm shops and shoppers. High operational expenses, an increase in stock costs, rising wages and more, all hurt the bottom line. This presents challenges as shoppers are expected to still be very cautious with their spending in 2024.
That said, the independent retailer is often best placed to navigate these challenges, as they can adapt their offering more quickly, often producing their own goods and catering to local needs more specifically than the big supermarkets tend to be able to do. With smart cost management techniques, such as switching from upright fridges to chest freezers, retailers can reduce energy bills. In addition, offering more frozen items and less fresh or chilled products can help to reduce stock loss.
Another prevailing challenge is theft. Shoplifting and organised break-ins have reached an all-time high. Implementing additional security measures can be costly, which many independent retailers cannot afford. However, some steps can be taken to reduce the risk of theft, such as reviewing store layouts to eliminate ’blind’ areas and avoiding keeping cash on the premises overnight.
Stefano Cuomo, CEO, Macknade Food Hall
General social tiredness, whether team members, customers or communities as a whole, will be challenge. It will be the role of business to provide proactive, uplifting and future-setting platforms and spaces to reinvigorate society and drive economic value, social belief and pride. While a challenge, it is also a huge opportunity to those who take up the challenge and deliver on it.
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