Freezing winds, climbing taxes and shoppers feeling the pinch... but it’s not all bad news for c-store owners

The new year has brought fresh challenges the increase in VAT and soaring fuel prices to name but two. To win in such a difficult economic climate won't be easy, but with drive, enthusiasm and careful business planning we can still prosper in these difficult times.

So, as we look to maximise our performance and maintain profitability in 2011, it's critical to first carry out a full business review, taking a look at anticipated expenditure for the year ahead as well as the potential impact of the rise in VAT.

We're doing exactly that at the moment for our three Londis stores in Chesterfield.  First we reviewed our five-year plan and realigned it accordingly, particularly taking into account VAT and its impact on profitability.

Terry’s top doom defying tips
1) Review your five-year plan and realign accordingly

2) Analyse the extra costs 2011 will bring

3) Review your wage bill. Are you running effectively?

4) Plan your ordering around adverse weather conditions

5) Don't forget customers are key!
Then we forecast for the following 12 months, addressing such questions as: what additional expenditure do we think we'll be carrying for 2011? In order to calculate this, I'm checking our business rates and utilities bills and ensuring we're aware of the exact costs and when they're due. Now's a good time to check to see if we really have got the best rates.

One of biggest costs is the wage bill, of course. So I'm also assessing how efficient we are and whether we're operating the hours we need to.

Are we running efficiently? Are we operating the hours that we need to? While customer focus remains key, it's also vital to assess these other costs.

But it certainly isn't all doom and gloom.  We've seen shopping habits change during the recession. People who wouldn't previously have shopped with us are now coming through the door and sales have gone up accordingly.

And the recent bout of bad weather has boosted sales further by allowing us to showcase the benefits of local shopping. It's difficult to overstate just how many people are reliant on local c-stores when the bad weather hits, particularly when you can't get cars off drives and there are no buses running. It's still only January and no doubt we will experience more extreme weather this year.

So it's important to put together an accurate demand forecast. That's why we are continuously on the phone to fellow Londis retailers, sharing ideas. When the snow came at the beginning of December we made sure we ordered three days' worth of stock on milk and bread. It worked. We never ran out of either.

We increased our orders for salt before the snow came, but kept it back until the first snow actually fell to ensure sufficient stocks when needed. We also discovered through Londis another range of 'extreme ice melt' and 'rapid ice melt' salt, products that you'd normally find in a supermarket or forecourt rather than a convenience store, and which our customers really appreciated. Needless to say, they sold fantastically well.

As people are tending to tighten their purse strings at the start of this new year, our focus will be on offering value and ensuring that shoppers see we offer great value. We distribute leaflets locally every three weeks, flagging up the promotions that we have in-store. The strong value message is then carried throughout the store, from the posters in the window to the point of sale, gondolas and special off-shelf displays that we have in-store.

With the rise in VAT, this year it's more important than ever to ensure a strong value message. We're experiencing increased competition from the multiples in our sector, so it's important to be seen to be competitive.

But while we're in tough economic times, we remain optimistic. The trend of shopping little and often and locally looks likely to continue in the year ahead to the benefit of retailers offering value for money.  And we are determined to do just that.

New in my store: Sid Ali, Nisa Local
Location: Mintlaw, Aberdeenshire
Type of store: Convenience
How often do you get new products in? Several times a week. We get new products in pretty soon after launch thanks to the Nisa 'first for new' scheme, which works very well.

What new products have you started stocking recently? Kit Kat Senses Caramel and Cadbury's Wishes for confectionery, which has proven very popular since it arrived. Mountain Dew Energy and spirits with mixers, for example Cola and Smirnoff.

How did you find out about them? We find out about new products through Nisa's member bulletin.

Is any one product selling particularly well? The new Cadbury's Wishes product. It came in its own display unit and definitely has that instant 'winning' feel about it. It's doing very well.

Is any product selling particularly badly? Milkybar Raisin & Biscuit, simply because it's a product aimed at kids but containing a fruit that seems to appeal more to adults. It hasn't been well received at all.

Have you delisted any products recently? Milkybar Raisin & Biscuit for the reasons I mentioned above. Unfortunately also Jones Pure Cane Soda, which is with regret, as I thought it was a fantastic product.

Are there any other products you've got your eye on? Colman's new casserole packets with roasting bags. These look interesting.

Propertyof the week
What: Convenience store
Where: Aberdeen
Serving Garthdee, the thriving student area of Aberdeen, this Nisa store is close to the Robert Gordon University campus and brings in weekly sales of about £10,000. Additional services include the National Lottery, with sales of c.£1,500 a week.

The compact and modern premises can be found in the heart of this densely populated area to the south west of the city centre and offers in the region of £70,000 are sought for the leasehold interest of the business. The current owners, the awardwinning retailers Dougie and Christine Dryden, are selling up in order to concentrate on their other stores.

For further information on this business please contact Daniel Arrandale of Christie + Co on 0131 5576666.

Business Barometer


How disrupted was your business by the cold weather in December?
Severely disrupted: 17%
Slightly disrupted: 35%
Not affected: 43%
My business actually benefited: 6%

Which aspect of your business was most affected by the cold weather?
Deliveries: 53%
Sales: 45%
Other: 2%

How was your Christmas period, compared with the previous year?
Better: 17%
The same: 40%
Worse: 43%

How smoothly did implementing the VAT increase go for you?
Smooth as silk: 26%
Mostly OK: 51%
Absolute nightmare: 21%
Didn't require change: 3%

How confident are you about the coming year for your business?
Very confident: 30%
Confident: 33%
Uncertain: 26%
Not confident at all: 11%