With the might of supermarkets, you could be forgiven for thinking that greengrocers are no longer viable businesses. But fortunately this is not the case – there are many successful greengrocers operating across the country. The key is to choose the right location and provide the right service, offering something over and above what customers can find at the supermarket. With these elements in place, and a solid business plan, there’s no reason you can’t build a profitable greengrocers.
What does the market look like?
The market has tightened in recent years due to supermarkets, who can often beat greengrocers on price. People are also generally busier, and less able to make a special trip to the greengrocer. However, greengrocers still do well, but they must have a strong target market and a strong location. Relationships with stakeholders, such as local farmers, are also essential, because then pricing and supply can be negotiated in order to help keep costs down and compete with the bigger companies.
Greengrocers are also diversifying and either developing a unique selling point, such as organic, local or carbon-neutral operations, or expanding their product range to include essentials and ‘nice-to-haves’ so that visitors buy more than just fruit and vegetables. Some greengrocers will specialise in exotic cuisine, providing customers with products that are harder to get in supermarkets, such as sushi ingredients and vegan options.
What are the key challenges of running a greengrocers?
As with all retail businesses, running a successful greengrocers involved many challenges:
- Keeping on top of stock
- Responding to market trends e.g. seasonal variations
- Being aware of disease prevalence
- Responding to customer feedback around products
- Awareness of health and safety regulations
- Compliance with food preparation regulations
There are no specific training courses for running a greengrocers but you can choose from a huge range of retail training courses. Food hygiene is a popular choice; options are available from many institutions, including the Chartered Institute of Environmental Health (CIEH). Alternatively you may choose to take a business-related course that will help sharpen your general skills, such as book-keeping and stock management. Once you’ve established your greengrocers and have a team of staff, you may want to look into a management training course in order to build a solid team and improve productivity.
Location, location, location
Appropriate locations are those in the middle, or nearby, a large concentration of your target market. Greengrocers require loyal customers to survive because many people now buy all their goods from the supermarket. Your target market will depend on the type of greengrocers you run; if you stock organic vegetables and eggs, then your prices will be higher, and you may need to set up in a more prosperous neighbourhood. If you think you can compete with the supermarkets on price, and organic is not so important, then a permanent market may be more appropriate. You’ll consider all these things when you conduct your market research and write a business plan.
Start-up costs are very dependent on location and the amount of stock needed. Greengrocers do not typically need a lot of money spent converting a premises for purpose, unless it has been used for something totally different before and basically needs gutting. While other businesses may be able to take slightly worse location in order to save money, greengrocers must not skimp on location because the surrounding target market is key to success. So your rent is likely to be your biggest cost, as well as stock, refrigeration units, signage, insurance and marketing. You could probably start a greengrocers for £5000+ but should probably budget at least £10,000+ to allow for any spiralling costs.
Insurance and compliance
Public liability insurance is essential when you first start your greengrocers, as is professional indemnity insurance. Check what these policies cover – selling fresh food can be a grey area and you may wish to approach a specialist insurer directly. If you plan to hire staff, you’ll legally require employer’s liability insurance, which covers you in the event that a former or current employee takes legal action against you.