Start and Run a Delicatessen
A WORLD IN ONE SHOP
IN THIS CHAPTER:
MAKING AN IMPACT
ESTABLISHING ECONOMIC RESILIENCE
People’s tastes have become more sophisticated, diverse and adventurous over the past 20 years and the popularity of delicatessens, speciality and fine foods has grown by leaps and bounds. Italian, Jewish, German and Polish delicatessens have sprouted virtually overnight to cater for expanding immigrant communities in the UK. From their early faltering days they have blossomed as their customer base has changed to include that sector of the British population who are keen to sample food and drink tasted abroad or in local continental and Asian restaurants.
The word delicatessen is arguably the most well-known foreign word in the English language. It entered into English usage from the German delikatessen (the plural of the French delicatesse) meaning a ‘delicacy’ and essen ‘to eat.’ The word delicate is recorded in Spanish as delicatus, meaning ‘giving pleasure, delightful.’
Usually a delicatessen is simply referred to as a deli. It sells fresh produce, including meats, cheeses and juices and stocks other products such as confectionery, cereals and pasta, bread, pickles and preserves, condiments and sauces, imported goods and related items such as cookbooks, cooking oils, and utensils. A number have also expanded to offer eating areas and to prepare sandwiches, salads and drinks to order.
With consumer tastes becoming more cosmopolitan, and delicatessens largely catering to them, supermarkets, convenience stores and other food retailers have not been slow to open in-store deli counters, expanding their ranges of cheeses, pate´s, olives and dips and introducing Polish, continental and Far Eastern food and drink.
Says Fi Buchanan, of Heart Buchanan Fine Food & Wine in Glasgow: ‘Supermarkets are taking their lead from delis and more and more the word deli is being ascribed to the higher end lines in supermarkets. Keep a keen eye on all developments and learn from them. Delis are not generic but something much more personal, providing a service to your local community.’
Now that you have decided to open a deli, take a look at all the complementary services you can offer to take advantage of your specialist, niche market. Remember that consumer needs are changing all the time so keep evolving your business to stay ahead of your competitors.
The national banking group the Alliance & Leicester suggests you consider the following before starting out:
- Who your customers will be – you might look at targeting the catering trade as well as members of the public.
- Where your premises will be – a good location is very important.
- Whether you will have more than one outlet, for example a market stall as well as a shop.
- Whether you will have an internet presence and take orders online.
- Whether you will offer a delivery service.
- What your opening hours will be.
- What range of products you will stock.
- Where you will obtain your stock from.
- Whether you will make up any dishes yourself, such as paˆte´s.
- Whether you will apply for a licence to sell alcohol.
- Whether you will offer organic products.
- Whether you will offer a range of Fairtrade products.
- How you will monitor which are popular/unpopular lines.
- Whether you will serve take-away food (such as sandwiches and bagels) for the lunch-time and after-work trade.
- Whether you should set up an in-store cafe´ as well, offering pastries and fresh coffee to have in or take-away, as well as a mail order/internet hamper service.
- Whether you can extend to catering for private and business functions.
- What your pricing policy will be (don’t forget you must be able to cover your costs, overheads and drawings).
- How you will set your prices and how frequently you will review them.
- Whether you will offer credit and, if so, to whom.
- Whether you will offer discounts, special offers and so on.
Hopefully you will find an answer to these within the pages of this book.
Making an impact
Around half a million people take the plunge and start up their own business each year and there are more than 4.3 million small businesses in total in the UK.Of these, 2.72 million are sole proprietors. Small and medium-sized enterprises (SMEs) employ 12 million people, or 58% of the private sector workforce, and turnover totals £1.2 billion, which is 50% of the UK’s gross domestic product.
Says Britain’s PrimeMinisterGordon Brown: ‘Small businesses are at the forefront of the innovation and enterprise that is the foundation of our economic success. I am continuously impressed by the countless small businesses which represent these very qualities.’ Adds David Cameron, leader of the Conservative Party: ‘Small businesses are the lifeblood of the British economy and their success is vital if we are to succeed in the 21st century.’
‘Small businesses form a vital part of the current government’s ambitious growth agenda and help create a dynamic and growth-driven economy,’ says the Federation of Small Businesses (FSB). However, while there is this recognition of the small business sector’s importance, small businesses do continue to face difficulties in a number of key areas and it is important to know what problem areas you might face.
The Department for Business, Enterprise & Regulatory Reform (BERR) broadly rates the following as obstacles to business success:
- Competition in the market – 15%
- Regulations – 14%
- Taxation, VAT, PAYE, National Insurance, business rates – 12%
- The economy – 10%
- Cash flow – 10%
- Recruiting – 6%
- Shortage of skills generally – 4%
- Availability/cost of suitable premises – 4%
- Obtaining finance – 3%
- No obstacles – 2%
- Shortage of managerial skills/expertise – 1%
It’s interesting to note that, contrary to what you might expect, raising the necessary cash is far from being the major obstacle you will face. That distinction is reserved for facing up to competition in the marketplace.
Establishing economic resilience
A record 471,500 new businesses opened their doors in 2007 – the highest annual volume since Barclays Bank started tracking the market in 1988 – in spite of increasingly difficult trading conditions in the second half of that year. Slower economic growth is indeed likely to curtail the buoyancy of start ups but John David, Marketing Director for Barclays Local Business, still expects the small business sector to prove resilient.
Deloitte has warned that the UK economy is set to experience its weakest period of growth in 15 years and that there is a risk of a recession in the next two years. The UK economy was expected to grow by 2% in 2008 and by a slightly smaller margin in 2009. According to George Derbyshire, Managing Director of the National Federation of Enterprise Agencies (NFEA), there could still be a continued growth in small businesses despite a downturn in the markets.
'There is no question that the economy as a whole is facing a difficult time as a result of substantial increases in many input costs, particularly fuel, energy and food, together with pressures in the financial markets. However, I believe that the greatest danger is that we talk ourselves into recession. Confidence is a fragile flower and public commentators have a duty to be balanced in their comments and to reflect on the consequences of their statements.
The general mood of SMEs in this economic climate is of concern, not helped by some of the comments they are hearing and reading about from commentators. At the same time, a number of businesses are expressing confidence in their markets and indeed their own management ability. Small business owners are renowned for their resourcefulness, resilience and optimism - traits which will stand them in good stead at present.
...and of course, SMEs should be aware that business support services, such as those available from local enterprise agencies, can help in a number of ways. They can review and advise on business plans and provide training on specific skills, such as credit control, negotiating, marketing and selling for instance. They can also advise clients with strained cash flows how to raise, and indeed manage without, new funding.'
Your projected performance is thus subject to a myriad of factors, from overall economic trends to pressure from competitors. You need to keep customers loyal and deliver compelling offers. While you are strategising for a slow-down in the market, quality may come under the spotlight, but quality is an important differentiator at all times and will help to keep you ahead of your rivals.
The Guild of Fine Food’s recent survey found that delis are better able to weather changing economic and competitive conditions than many other businesses. While some consumers may cut back on the number of times they eat out, or spend less when they do go out, one of the best ways to overcome this is to offer your customers opportunities that will establish and deepen their loyalty. When the good times return you are thus more likely to emerge as a winner by having created a close and lasting bond with your customers during more difficult times.
Says Angus Ferguson, Managing Director of Demijohn deli in Edinburgh and Glasgow:
'We are busier now than at any moment in our short history despite talk of a global recession. You need to be flexible and creative to appeal to a market that is very price and media sensitive. This does not mean you have to discount, you just need to offer a benefit to your customers through your product or service that is unique or far better than your competition. The rules have not changed, they have just become more focused.'
