This month Mike Fisher called on the help of his House of Fraser buddy Paul Lewis to set up the Natural Grocery Store in Cheltenham and the two rapidly won an enthusiastic clientele. But they were to discover that growing fast is not always a good thing...

It was during a trip to the US that Mike Fisher had an epiphany. Fisher was staying with a family who had a child with severe behavioural problems and the parents, having tried everything else, turned in desperation to feeding the child a natural diet.

The child was instantly transformed. As Fisher was living under the same roof he felt obliged to "go natural" and to his surprise he, too, underwent a transformation.

Natural Grocery Store, Cheltenham
Store owners: Mike Fisher and Paul Lewis
Staff: 10
Weekly turnover: £24,000
Inspired by this encounter, Fisher wondered if there were a business opportunity in the UK for natural products. He called on the help of a friend, Paul Lewis, who held a senior role at House of Fraser. Fisher's passion coupled with Lewis's shrewd retailing abilities enabled the pair to open the Natural Grocery Store in Cheltenham in 1998.

The ethos was simple: the food should contain absolutely nothing artificial (they even sourced diet and diabetic sweets and products with non-artificial sweeteners) and should preferably be organic and, better still, Fairtrade.

Make no mistake, however, this was not going to be your stereotypical 'beardy weirdy' shop with bran tubs and customers wearing kaftans; the plan was to launch a very smart, sharply presented urban supermarket.

Despite Lewis's cool professionalism, he admits to pangs of dread on the day when 11 tonnes of natural goods arrived and then, although the initial delivery appeared massive, it only filled half the shop. But his fears proved unfounded because the store caught the mood of the local populus perfectly and they soon had to order another 11 tonnes. The store eventually outgrew its retail footprint but, luckily, in 2004 a bigger store a few doors away became available.

This was quite a step up in terms of investment. The fit-out alone cost £120,000 excluding flooring, signage and decorating, but it was money well spent. Along three walls stand attractive custom-built stainless steel chiller units seen through an enticing shop window.

The whole food market may attract the 'alternative' stigma, but Lewis and Fisher could be accused of going too far the other way with their bright, sharp and professional layout I was concerned when Lewis told me some customers don't realise what kind of store they've been shopping in until they reach the checkout. But the approach seems to work.

The stock range is fascinating. In addition to meat, fruit, veg and ambient foods, there are wines, cosmetics, spirits, and cigarettes (Natural American Spirit organic cigarettes, of course). You can even give your cats and dogs a natural diet.

The Natural Grocery Store charges a premium for its products it has to because, unlike standard food manufacturers, it can't manipulate food to make it cheaper, longer-lasting and easier to move around. In the business's early days people were more than happy to pay this premium.

But an all-too-common trap was lying in wait for the partners. Buoyed by their early success they expanded too quickly, acquiring a warehouse to distribute to other outlets and building a workforce of more than 30. They even ran stack 'em high offers. Then the perfect storm hit: a large Waitrose opened nearby offering a wide range of natural and organic products. The recession didn't help, with some customers dropping natural products from their shopping.

Lewis and Fisher readily admit that they made a few mistakes. The bargain bin approach clearly didn't strike a chord with the customer base and as a result some lines, such as Duchy Originals, were over-bought and stuck in the store like glue.

But to their credit the partners identified they had a problem and acted quickly to address it. The warehouse was shut and the company's head count was scaled back to 10. Throughout a restructuring, the founders say that the support of their wholesaler, Suma Wholefoods, was vital, and the business is now back on track.

Expansion plans are even back on the cards but this time more modestly through the website, which is proving a hit, with sales gathering pace.

In-store there is still room for improvement. The guided tour I was given helped me to understand products I'm not over-familiar with, such as natural brown paper bags for the kids' sandwiches, sulphite-free wines that don't give you a headache, and sweets that don't send kids bonkers because of the additives.

They are all appealing but not every customer is privileged enough to get such a tour, so the owners should introduce a lot more signage, leaflets, and explanatory notes to help educate new and existing customers.

If you want educating in natural food, I heartily recommend you pay the store a visit or check it out online at I think that you will be very pleasantly surprised.
A 'one idea' business is very risky. Premium products only sell well in a premium environment.

The Natural Grocery Store is attractively laid out but it needs to ensure customers know what kind of store they've been shopping in by the time they reach the checkout. If things are going too well, prepare for trouble.

The Natural Grocery Store expanded too quickly and was forced to scale back its operation when competitors moved in. Don't be afraid to make drastic changes if you need to.

Fisher and Lewis identified they had a problem with their distribution and moved swiftly to rectify the situation. Vigorously sell your ideas to new potential customers.